Friday, January 12, 2007

Business boom in West Sacramento

Business boom in West Sacramento

West Sacramento is celebrating its 20th anniversary, and with it an economy that is changing its image as an industrial backwater.

By Lakiesha McGhee - Bee Staff Writer

Last Updated 5:33 am PST Wednesday, January 10, 2007

Chad Bidegain works on a weld section in the new 110,000-square-foot building for biotech firm Affymetrix that should be open by summer. Sacramento Bee/Bryan Patrick

Technicians wearing protective, white "bunny suits" and eye goggles work in a secure environment where DNA is used to assemble genetic chips for drug discovery and other studies.

The technicians' work at Affymetrix in West Sacramento is intricate, careful and part of a 24-hour operation.

Their work is reflective of West Sacramento's changing economy.

The city, which celebrates its 20th anniversary this year, has long worked to change its image as an industrial backwater of Sacramento filled with grimy warehouses and cheap motels.

Business parks have expanded with high-tech companies and other industry new to the city. National retailers such as Ikea have opened shop, attracting patrons from throughout the region. New shopping centers will house a Home Depot, Wal-Mart, Target and Lowe's Home Improvement, which are scheduled to open within the next few years.

Historically, West Sacramento -- flanked by three major freeways -- has been a business community serving as the region's hub for truckers and warehouse distributors.

"The warehouse and trucking jobs are not going to sustain us into the future," said Diane Richards, city economic development coordinator. "We believe if you don't keep getting better, you'll stop being good. We're always trying to improve the quality of life for our residents."

The need for change is driven by a surge in new housing and a need to provide higher-wage jobs for a growing population. An economic development report issued by the city in 2005 showed that while job growth in the private sector was good, average wages had declined.

The city has since refocused its efforts to attract five target industries: biotechnology, fuel cell work, logistics for warehouse distribution, food processing and retail. Many of the companies report they are expanding operations.

"West Sacramento has one of the strongest business climates in the region because of some of our natural advantages and how we have focused our efforts," said Christopher Cabaldon, the city's mayor.

He explained that highly skilled workers are attracted to the city's location near an urban core, transportation, the waterfront and college campuses. Such advantages have helped West Sacramento become one of the regional hubs in biotechnology, Cabaldon said.

West Sacramento accounts for about 13,000 of the 15,000 jobs in Yolo County involved in transportation and logistics, according to a city report.

The city's 2005 report also found the region's distribution industry was hard hit by a weakened economy. Employment had fallen in the past three years and the Port of Sacramento -- the most visible distributor in West Sacramento with about 150 full-time employees -- had lost $3 million.

The city gained greater control of the port last year and developed a partnership with the Port of Oakland to help change its business tide.

"We're still a young community, and we knew from the get-go that we would have major challenges to overcome if we were going to reach our dreams and become what we wanted to become," said Kay Fenrich, executive director of the West Sacramento Chamber of Commerce.

West Sacramento residents once had to leave their community to shop, Fenrich said, but the city has added more retail, and midsize to smaller businesses.

The city offers tax breaks and other incentives to attract new business, but mostly lures firms with competitive land prices and a streamlined planning process, Richards said.

However, some economic experts are skeptical about plans to lure biotech companies to boost job growth.

"The big problem with biotechnology is that everybody wants them and people are throwing all sorts of outlandish favors in their direction," said Joel Kotkin, a consultant on economic trends and author of "The New Geography, How the Digital Revolution is Reshaping the American Landscape."

Kotkin said competition for biotechnology firms is high and the jobs they create are few in number. Compared with the technology boom in the late 1990s, there is not a surge in biotechnology jobs to justify the appetite, he said.

"I'm not sure why biotechnology is so popular," Kotkin said. "I guess it's the flavor of the month. It's sexy. It's high-end jobs. It's clean industry."

If the hunt for more biotech companies comes up short, the city has other options. West Sacramento received $35,000 in community development block grant funds last year to investigate developing an incubator, a type of innovation center that would focus on the five target industries and help entrepreneurs develop ideas.

A logical move for West Sacramento, Richards said, is to encourage more businesses that provide warehouse distribution logistics. Logistics is a fairly new industry involving use of real-time technology to track shipments.

In the meantime, West Sacramento's biotech firms for the most part are reporting growth.

The most notable large biotech firms in West Sacramento are Affymetrix, Dade-Behring, Idexx Laboratories and Xyratex, which account for more than 1,000 jobs paying an average annual salary of $43,000, the city reports. Affymetrix set up shop in West Sacramento in 1998 and is considered the city's first great success in wooing biotech firms.

A new 110,000-square-foot building is being constructed at its site on Embarcadero Drive and should be ready for use by summer. Affymetrix is not disclosing information on the number of potential new jobs.

About the writer:

West Sacramento is in the midst of a business and image makeover, from a city known for its low-cost motels and gritty industrial zone to one with a full range of retail services and businesses that offer higher-paying jobs for residents. Sacramento Bee/Bryan Patrick

Employee Raul Cepeda walks in a section of the new Affymetrix building being constructed on Embarcadero Drive. The company, which set up shop in West Sacramento in 1998, uses DNA to assemble genetic chips for drug discovery. Sacramento Bee/Bryan Patrick

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