Aliso Viejo Giving O.C. Tech Centers a Run for the Money

While cities all around it wage sophisticated campaigns to attract technology companies, Aliso Viejo is creating a high-tech cluster almost without trying.

It doesn’t promote itself with glossy marketing brochures or catchy phrases such as “Tech Coast.” But in the last couple of years, this unincorporated community of 41,000 in south Orange County has drawn an impressive bevy of companies that include engineering giant Fluor, chip maker QLogic and, most recently, start-up incubator firm EDevelopments.com.

What’s the pull? The area’s cheaper rents and available space, for one. Higher costs in more established hubs such as Irvine and Burbank are pushing firms to such communities as Aliso Viejo and North Hollywood in the San Fernando Valley.

“One of the oddities about the successful tech regions is they sort of undermine themselves,” said Joel Kotkin, a senior fellow at Pepperdine University’s Institute for Public Policy. “They get too successful and then people want to get away from them.”

Moreover, technology companies increasingly want to be where skilled workers are interested in living and working.

In Orange County, traffic along the San Diego Freeway and the soaring costs of housing in Irvine and Newport Beach mean new opportunities for towns such as Aliso Viejo to rise from relative obscurity in the business community.

Jobs in Aliso Viejo are “a great sell” for people who are already living in south Orange County, said Roger Howland, president of Job Dr., a high-tech recruiter.

Howland said he just worked with an Aliso Viejo man who had two offers: one from an Irvine company that came with a 22% raise, the other from an Aliso Viejo firm with a 15% bump in salary. The client took the lower-paying job near his home, Howland said, so he can drop his kids off at school on the way to work and have lunch with his wife during the day.

“You don’t feel like you’re in a rat race,” said Mark Grundy, an executive at Internet marketer MindArrow Systems, which came to Aliso Viejo in September. “You feel like a big fish in a little pond.”

MindArrow is one of several dozen technology companies in Aliso Viejo, a 6,600-acre master-planned community. That’s still tiny compared with such cities as Irvine, which boasts 800 high-tech firms just at the Irvine Spectrum office park.

“I’ve never looked at South County as a threat,” said Dick Sim, group president for investment properties at Irvine Co., developer of the Spectrum.

Even so, the trickle of firms defecting from Irvine and other cities to Aliso Viejo is adding up. There was quite a buzz last week when EDevelopments.com, a new incubator company started by Buy.com founder Scott Blum, abandoned plans to spend more than $50 million to buy and develop land in Irvine and instead signed a lease to take up four floors at a new office park in Aliso Viejo. Buy.com’s presence in the park helped draw EDevelopments, and the incubator could spawn more tech companies headquartered there.

The 58-acre park, called Summit and owned by Parker Properties, has gurgling waterfalls, shaded outdoor work stations and a location in the center of town. It’s aimed at the tastes and work styles of young tech employees.

Parker and Shea Properties, Aliso Viejo’s other major commercial developer, estimate that as many as half of their tenants will be occupied by Internet-related companies once their projects are built out in a few years.

Aliso Viejo, a 20-year-old community, can trace its tech development to the opening of California 73, the San Joaquin Hills tollway, in 1996.

Smith Micro Software Inc. was one of the earliest arrivals. “When we first came here there were two places to eat lunch, and one of them was on four wheels,” said Dave Sperling, Smith Micro’s chief technical officer.

But as new housing developed and more restaurants opened, a burgeoning population of professionals living in the community began to catch the attention of tech companies hungry for skilled labor.

A more recent catalyst has been the move by Fluor, a Fortune 500 company that left Irvine last summer and bought half a million square feet of engineering and office space in Aliso Viejo. The company instantly became the community’s biggest employer, with 2,300 workers. Its arrival gave the area even more visibility.

“When Fluor came, the rest followed,” said Carmen Vali, president of Aliso Viejo’s Cityhood 2000 organization and community association.

Vali herself has mixed feelings about the influx of tech companies. Sure, they are drawing more professionals who live and work in and pump money into the community, she said. At the same time, Vali added, “The unfortunate reality is that cities rely on sales tax, which is not directly generated by these companies.”

QLogic took notice after Fluor’s arrival, but before leaving Costa Mesa earlier this year, the chip maker scoured the county, considering two dozen places.

QLogic weighed various sites on the basis of demographics, cost, expansion and high-tech concentration, among other factors. The sheer number of tech firms in Irvine was a big plus for two locations there. But the cost--office rent is roughly 20% more than in Aliso Viejo--and lack of flexibility drove down their scores.

Two other finalists, Costa Mesa and Foothill Ranch, also ranked high. But in the end, QLogic bought a 3.5-acre property from Parker Properties in Aliso Viejo.

Robert Miller, vice president of operations, said the company had expected to lose between 10% and 15% of its employees as a result of the move, completed in February. But only three have left.

It turns out that about half of the company’s 344 employees live in South County, including Miller.

“I’ve worked in Mission Viejo, and I’ve worked in Costa Mesa. This is it,” Miller said. “I like being around homes. When I come to work, I don’t feel like I’m stuck at work in some concrete jungle. I truly feel part of the community.”

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High-Tech Tenants

Proximity to a toll road and an abundance of new housing lures high-tech companies to Aliso Viejo.