San Diego BusinessSAIC’s Corporate Headquarters Poached Away
by a Savvy Governor and $8.5 Million
Defense Contractor Science Applications International Corporation, more commonly known as SAIC just announced that it is moving its corporate headquarters from San Diego to McLean, Virginia, a suburb of Washington DC. SAIC employs approximately 40,000 employees worldwide with 4,500 employees located in San Diego County as well as over 17,000 employees in the Washington DC area. SAIC’s CEO Walt Havenstein stated, “This move will formally relocate the corporate executive leadership team closer to our federal government customers enabling us to better respond quickly and efficiently to their critical needs, while maintaining a significant presence in San Diego.” What Mr. Havenstein doesn’t mention as a significant reason for undertaking the move is the $8.5 million in public money Virginia is offering SAIC to undertake the move. The Governor’s Opportunity Fund will provide $1.5 million, while the Virginia Economic Incentives Program will provide an additional $7 million. SAIC anticipates spending $25 million to complete the relocation, which is expected to create 1,200 jobs in Virginia over the next 3 years. The Governor of Virginia, Timothy Kaine, was integral in the allotment of public funds to entice SAIC to move its corporate headquarters from San Diego to Virginia. Governor Kaine stated after SAIC’s announcement, "Today we take it to the next level, a business like SAIC which is a global player... is a particularly good attraction for Virginia.” Though San Diego is known as “America’s Finest City,” it recently dropped from 8th to become the 9th largest city in America according to the US Census Bureau. Despite having over 1.3 million people within the City of San Diego and over 3 million people in San Diego County, there are now only 2 Fortune 500 companies headquartered in SD County: Qualcomm and Sempra Energy. With the state of California experiencing major financial deficits and the Governator busy with statewide issues, it is time for San Diego’s local government to step up to the plate and institute a plan to retain and attract companies, both public and private. There is a reason that Fortune 500 corporations choose Atlanta, Minneapolis, and Fargo as their corporate headquarters and it isn’t the weather; it is due to significant financial incentives and proactive local governments. According to CB Richard Ellis’ second quarter 2009 San Diego Office profile, the countywide office vacancy rate is 19.7%, which equates to over 1 million square feet of vacant office space. The oft-quoted line from A Field of Dreams “If you build it…they will come,” apparently doesn’t refer to San Diego’s office market. It is time for San Diego to do some corporate poaching of its own and fill these vacancies. Whether it entails significant corporate tax breaks or offering public money based on expected job creation as Virginia has done. The time for action is now to ensure that San Diego remains “America’s Finest City,” not just for residents and tourists, but for Fortune 500 companies as well.
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This will have a significant ripple effect on our economy, as high paying jobs will be moved out of San Diego. SAIC also has a history of spending a lot of money on company events to boost morale. Undoubtedly our local caterers and event planners will also feel the loss of SAIC.
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October 26, 2009
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California is going down the tubes. Get out while you still can! That applies to both residents and companies
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October 26, 2009
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