Striving to Be a Place Businesses Would Like to Call Home : * Economy: Sobered by the loss of jobs and the displeasure of local companies, San Diego and other California cities are taking steps to become more user-friendly.

The well-orchestrated chorus is being sung throughout California by business leaders: What’s good for business is good for the state’s recession-weary cities and counties.

Elected officials, sobered by aerospace industry cuts and the loss of home-grown companies to other states, are increasingly responding to the cry, with programs designed to make their cities more attractive places to do business.

Earlier this month, the San Diego City Council approved a 21-point program that established a “new partnership” between business and local government. The package streamlines permitting processes, places various economic development offices under one roof and creates an office that will guide small businesses through the regulatory process.

Los Angeles, which lost 50,000 jobs during the past year, recently created an office of economic development--led by a businesswoman rather than a City Hall bureaucrat--charged with cutting red tape. Mayor Tom Bradley created the office after several surveys reported that City Hall’s apparent anti-business bias was a major reason for businesses leaving town.

Frank Jordan, San Francisco’s new mayor, recently ousted incumbent Art Agnos, in large part by courting business leaders with promises to repair worn relations between them and city leaders.

Business leaders are also finding support at state and national levels.

Lee Grissom, president of the Greater San Diego Chamber of Commerce, earlier this month was named executive director of the newly created state Competitiveness Council. The panel, chaired by businessman Peter Ueberroth, is charged with streamlining state and local regulations.

Today, President Bush is expected to recommend a 90-day moratorium on the implementation of a wide array of new regulations. Bush reportedly believes the moratorium would help stimulate the nation’s stalled economy.

Critics, however, contend that business leaders are using the recession to accomplish what they couldn’t during healthier economic times: gut necessary regulations and escape their fair share of taxes and fees.

Similarly, while members of the local Environmental Health Coalition agree that San Diego’s vaunted quality of life can’t survive without jobs, they have also cautioned City Council members that that same quality will be degraded if too many regulations are abandoned in favor of making the city more attractive to business.

Business leaders acknowledge that much of San Diego’s economic malaise is linked to the nationwide recession and ongoing corporate restructuring, trends that are far beyond the control of local politicians. Still, Grissom said, ill-advised and time-consuming regulations are exacerbating the state’s economic woes.

“Just look at (uncommonly high) unemployment rates, tax revenues, which are at the same level or below last year, and you find that the California economy is not growing, literally for the first time since 1934,” Grissom said.

Without those ominous economic indicators, the business community’s complaints “probably would be perceived” by critics as little more than posturing, he said.

“We’re going through (an economic) period that our nation has not experienced, at least in my lifetime,” Grissom said.

San Diego Mayor Maureen O’Connor, who has urged the City Council to approve business tax breaks aimed at stimulating the local economy, has predicted that San Diego is “heading into a slow-motion depression.”

“I don’t know how to explain this to everybody, and I’m trying the best I can, but these are difficult times, and we’ve got to start looking at different solutions or you are going to see more of the same,” O’Connor told the council earlier this month.

Business leaders have expressed high hopes for the 21-point plan approved Jan. 16. Michel Anderson, a consultant who chaired the task force that recommended the economic package to the council, believes the plan will have an immediate effect on business-government relations.

But Anderson also acknowledged that San Diego is playing catch-up with other cities that have already crafted economic battle plans and appointed business czars to cut through red tape.

In recent years, Anderson said, San Antonio, Tex.; Denver; Newport News, Va.; Boston, and Cleveland have all completed studies laying the foundation for economic advances. Increasingly, those cities are courting Southern California firms that are considering plant expansions.

“The competition is tough,” Anderson said. “We’re going to lose the (economic) race if we don’t start running right away.”

Meanwhile, business leaders complain that, in an era of tight budgets, they are often ill-prepared to do battle with those out-of-state raiding parties. Officials at San Diego’s quasi-public Economic Development Corp., for example, recently noted that tiny McAllen, Tex., on the border with Mexico, dedicates more money to economic development than the local agency.

San Diego’s new package will buttress the city’s economic development efforts by uniting now-independent offices under one roof. It also sets the stage for multi-year funding of development programs, a change that will eliminate the unsettling practice of piecing development budgets together on an annual basis.

Business development officials also acknowledge that Southern California, a ripe target for out-of-state development agencies even during good economic times, has drawn increased interest from states that are offering economic incentives and low-cost land.

Those raiders are also using the California drought to entice companies. An economic development agency in Arkansas has focused its recruiting pitch on two simple words: abundant water .

The sales pitch isn’t far-fetched. A recent poll of local biotechnology executives suggests that growth in the industry will occur out of state unless Southern California can ensure a guaranteed supply of water.

Yet even with that, biotech leaders predict a dim future for their industry in San Diego. Gensia Pharmaceuticals President David Hale said the industry’s future is “seriously threatened . . . (by a) poor business climate.”

He isn’t the only executive with a bone to pick.

“The city of San Diego could learn a lot of lessons in how to (better) handle the business community,” said Steve Cushman, who owns a string of car dealerships in San Diego County. “The city needs to become, in my opinion, business-friendly; it needs to figure out ways to help business develop.”

Cushman cited Poway as a city that has structured its bureaucracy in a way to speed the permitting process for companies that are expanding.

Yet Poway’s attitude has not prompted a cut in environmental, health or safety requirements, Cushman said. “All the procedures that must be followed are being followed,” he said. “But things get done right the first time. . . . They’re very responsive to business.”

Titan Corp. President Gene Ray said that while most local business leaders want to remain in San Diego, excessive regulation has eroded profit margins to the point where companies are being forced to consider out-of-state expansions.

Some of those departures will occur if only because of the economic incentives being offered by competing economic development agencies, he said. Titan, for example, will open a new subsidiary--with 30 to 40 jobs--in Denver, largely because city officials made the venture so economically attractive, Ray said.

James McGraw, a local architect who has organized a biotech support group that includes attorneys, consultants and other service providers, argues that San Diego doesn’t need to stage a bidding war in order to retain home-grown companies.

Rather, it “should remove the disincentives, the lengthy permitting processes, the very high fees,” McGraw said. “That’s got to be the first order of business. If the playing field were level in terms of . . . (regulatory hurdles), then you wouldn’t need to give away land or offer tax breaks.”

Economic development officials acknowledge that relatively few local companies have actually closed their doors and moved out of state. But out-of-state development officials said significant numbers of Southern California employers, most of whom cite costly regulations, are now looking seriously at relocating.

The Ohio Economic Council, for example, has more than a dozen active prospects in Southern California that are planning expansions. Half those companies will make decisions during the next two years, according to James Kroeger, chairman of the council.