To make the CleanTech Corridor initiative — a plan to attract numerous clean-tech manufacturers to North County — a success, financial incentives are the key, according to the chief executive of a fast-growing solar energy company.
“Frankly, this area is just not competitive with places like Arizona, Nevada and New Mexico,” said Joe Budano, president and CEO of Poway-based Energy Innovations Inc. “What happens is that if we’re not careful, North County becomes an incubator of technology that then gets manufactured in other states.”
Noting that the region must be able to offer tax breaks and other financial incentives that are on par with other clean-tech manufacturing centers, Budano said. “There needs to be more tools in the toolkit for the city and the county to attract companies like ours and retain them.”
Budano, commenting that “California is a difficult place to do business in the first place,” proposes an Enterprise Zone in North County that’s similar to what’s offered in Chula Vista.
There, businesses within the zone can tap into tax credits to use toward new manufacturing equipment and hiring employees. In addition, lenders can deduct the net interest earned on loans made to businesses in the zone.
“There’s a real opportunity here for the county and the city,” Budano said.
Striving to Become a Global Force
Considering that there’s open land, lots of sun, proximity to clients in the Southwest, and a ready-made workforce of engineers and skilled production employees, there’s no reason that North County can’t be a global force in recruiting solar energy equipment manufacturers and other clean technology producers, said Debra Rosen, president and CEO of the San Diego North Chamber of Commerce.
“We’re really missing the boat up here,” she said, recalling conversations she had about one year ago with chamber staff that led to the CleanTech Corridor initiative.
The San Diego area already is a burgeoning hub for clean-tech research and development, with more than 800 clean-tech companies operating locally, according to the nonprofit membership organization CleanTech San Diego. Of that total, more than half create or invent new technologies.
But what the local clean-tech scene is missing, Rosen said, is a robust manufacturing side. Only a handful of big companies have chosen to make San Diego their base for production, instead choosing cities that do a better job of marketing their business-friendly climate.
“We’re putting together a coalition and talking about how can we compete together to bring companies and jobs to our region,” Rosen said.
The cities of Escondido, Poway, San Diego, San Marcos and Vista have all had success on their own luring manufacturers, Rosen said. But to make the entire region a draw for the biggest clean-tech industry players, a team approach is needed.
“If each city tries to compete individually, it just won’t work,” she said. “When companies are exploring this region for clean-tech manufacturing, we must be able to approach them as a community of thought leaders.”
The effort requires cities to set their individual egos aside to tout the regional benefits. After all, the wealth created by the additional jobs will lead to more money spent in all of the North County communities, said Ed Gallo, an Escondido city councilman who has been closely involved in the CleanTech Corridor project.
The corridor, as envisioned, will be positioned along Interstate 15 and State Route 78, including five municipalities. “I liken this to Silicon Valley or even Sorrento Valley,” Gallo said. “All of the cities come together and compete as a group.”
Some jousting for new businesses will be unavoidable, he acknowledged, but in the end, when a new manufacturing plant opens, “we all will win.”
“We create jobs for folks who live in the area and that leads to more money spent locally,” he said.
Gallo said that two of the biggest draws of the CleanTech Corridor location are the vast amount of land and the existing transportation infrastructure. “We have buses and trains and we’re at the crossroads of a state highway,” he said.
“We’re one of the few multimodal hubs in San Diego,” Gallo said. The I-15 expansion has cut commute times and made North County a quick drive from downtown San Diego.
Energy Innovations opened its facility in Poway during the summer of 2010 and, six months ago, kicked off production of its concentrated photovoltaic panels, which are sold to commercial users, Budano said.
The company has about 100 employees right now, but expects to hire 200 workers in the next 24 months as it adds three production lines to meet demand. Energy Innovations is in talks with San Diego Gas & Electric Co. about pursuing a solar project together, Budano said.
Like many solar facilities today, Energy Innovations has a highly automated factory and employs skilled workers. “It’s not people turning screwdrivers,” Budano said of the new jobs, which will have an average salary of $60,000 to $70,000 per year.
To identify specific actions that San Diego County and its northern cities can take to make the region more appealing to manufacturers, the San Diego North Chamber of Commerce is planning a clean-tech legislative conference for Sept. 16.
“The goal is to come up with discrete takeaways that we can use as a blueprint for going forward,” said Kenji L. Funahashi, a partner at Jones Day law offices in San Diego and chair of the CleanTech Corridor initiative. “The first step is having this dialogue.”
Funahashi said one other step will be to collect information about the benefits of locating in North County, including data about the workforce and educational institutions.
“We have so many great organizations here,” he said. “It would be helpful for clean-tech companies to have a portal of resources to learn about the area.”