When you think of manufacturing hotbeds across the country, California - let alone inland California - might not be the first place that comes to mind.
Paul Hiller is hoping to change that.
As President and CEO of the Inland Empire Economic Partnership for the past two years, Hiller is charged with getting the word out about the region’s attractiveness to the manufacturing industry. Created about 10 years ago, when two separate organizations that were promoting Riverside and San Bernardino Counties were merged into one, the IEEP is a private, non-profit economic development corporation created to market the area primarily to manufacturing and logistics companies.
His biggest obstacle? Well, do you know where the Inland Empire is?
“The challenge we have is to create the awareness of the region, and the benefits of locating here,” Hiller said in an interview. “But it’s hard to get on someone’s radar screen if they’ve never heard of you.”
For the record, the IE (which will probably never be mistaken for the ‘OC’) is located 50 miles east of Los Angeles, and includes San Bernardino and Riverside.
For now, Hiller’s job is being made much easier by one overriding factor: real-estate prices.
“The facility costs, whether leasing or building, are significantly below that of Los Angeles or San Diego,” Hiller said. “And while the cost of real estate is very low compared with the coastal communities, you still have the proximity to those markets, either by truck or by rail.”
Hiller said that factor is also behind the low unemployment rate – currently about 4.5 percent - in the region.
“For every job we create we probably have two or three people who want to move here just to be able to buy a home,” he said. “So the supply of labor is almost endless, given the attractiveness relative to other locations.”
The migration of workers inland appears to be an equal-opportunity affair; the number of both blue collar and white collar workers is on the rise, and the IE is home to more than 300,000 degreed workers, according to the U.S. Census bureau. The region is also the fastest growing in the state in terms of job growth and population growth.
Indeed, Hiller says manufacturing employment in the IE is actually growing, a phenomenon not many areas can claim. While the region has been hit with some defections as a result of offshoring, more manufacturers are coming rather than going.
“We’ve got so many companies coming into California, and so many are deciding to locate here as opposed to somewhere else in the state,” he said. “Once they’ve done their due diligence and have decided that California is where they’re going, we’re a compelling location.”
While the IE doesn’t offer any specific tax incentives for manufacturers, the region is more flexible than some others when it comes to industrial development.
“There are redevelopment agencies within various cities in the IE that can be pretty creative in creating their own incentives,” he said, adding that in some cases there are incentives aimed at attracting blue-collar workers.
According to a study released by the USC Lusk Center for Real Estate, Riverside and San Bernardino comprise the best market in the country for construction of warehouses and new distribution centers.
“We’ve got a tremendous infrastructure with the highways as well as rail, and we have industrial sites that are ready to go that are adjacent to rail as well as to interstate highway ramps,” Hiller said. “It makes it very convenient. I’d say our infrastructure is one of our biggest strengths.”
So, what keeps Hiller up at night?
“If we lose our housing advantage in terms of the cost of real estate, that would be a real blow,” he said. “But the business climate around the IE is very positive, and companies find it very easy to locate here because cities and local governments want them here.”