December 20, 2005
South Coast data points to 1,000 new jobs

By Kevin Kreutz

South Coast data points to 1,000 new jobs

Kevin Kreutz
Staff Writer
12-20-05

A flurry of corporate expansions and hiring sprees at Raytheon and Citrix Online have translated into 1,000 new jobs in South Santa Barbara County during 2005.

That’s the conclusion of an analysis of South Coast trends by Francois DeJohn, a partner with Leider Hayes Commercial in Santa Barbara. Although his numbers are preliminary, they appear to demonstrate that the Santa Barbara-Goleta region is back in the corporate expansion game.

“It’s really a growth story this year,” DeJohn told the Business Times.

The high cost of housing, lack of new space, no-growth politics and cheap alternatives have created a consensus that South Coast startups are doomed to move out of the region. But it turns out the alternatives may not be that attractive after all.

DeJohn’s analysis concluded that general business and high-tech users have leased 200,000 square feet more space than the amount of new square footage placed on the market this year. This so-called net absorption means that businesses have added far more space than they’ve cut back on during the past 12 months.

DeJohn said corporate users tend to add one employee per 200 square feet of new space, leading him to project a figure of about 1,000 new jobs. Raytheon and Citrix Online together accounted for 400 of those jobs; the rest are accounted for by a number of smaller expansions.

“I think it’s plausible,” said Dan Hamilton, director of economics for the University of California, Santa Barbara, Santa Barbara Economic Forecast Project, of 1,000 new jobs being created through November. “That’s a hopeful sign that maybe the South Coast economy, despite how hard it is for a company to do business there, maybe they are doing better than treading water.”

DeJohn’s findings suggest that upbeat economic reports from the UCSB forecast and California Econommic Forecast will be forthcoming early next year for the rest of the tri-county region. In November, UCSB revised upward its employment figures for San Luis Obispo County and revised its valuation of the county’s economy to $11 billion from $10.3 billion.

Other companies adding new employees, DeJohn said, include Toyon Research Corp., Yardi Systems, InfoGenesis, Network Hardware Resale and Bargain Network. He believes those companies and a large number of small users expanding a few thousand square feet and a few employees at a time created the remaining 600 jobs.

Hamilton said he and Executive Director Bill Watkins have been forecasting slow econommic growth because it is so difficult for a person to start a business and grow on the South Coast.

But if companies follow the torrid growth pace Raytheon and Citrix Online have set, Hamilton, Watkins and others may be forced to turn optimistic in their outlooks.

Spokesman Ron Colman said Raytheon made 257 new hires this year, half of which were engineers. The Massachusetts-based defense contractor has more than 2,000 employees working for three divisions in Goleta: Electronic Warfare Systems, Raytheon Visions Systems and Santa Barbara Remote Sensing. Only UCSB, Vandenberg Air Force Base and the County of Santa Barbara employ more people in the county.

Colman said the company expectes to hire 200 to 250 more people in 2006.

Citrix Online hired 157 people in 2005, Prsident Brett Caine said. And he expects continued growth with its expansion plans.

The company now leases 103,000 square feet in Santa Barbara and Goleta, DeJohn said.

Citrix Online is a division of Fort Lauderdale, Fla.-based Citrix Systems. Citrix Systems bought Santa Barbara-based Expertcity in early 2004 for $225 million and renamed it Citrix Online. The software company’s successful products include GoToMyPC, GoToMeeting and GoToAssist.

Citrix Online and the city of Santa Barbara are negotiating a deal to build a corporate campus for the company near the Santa Barbara Airport. The campus, totaling 160,000 square feet, is still at least two years away from being ready for occupancy.

DeJohn said Citrix Online is still growing as it pursues its corporate camups.

But DeJohn said companies in high-margin businesses that have a desire to stay in Santa Barbara-Goleta can.

Employers and employees alike are finding ways to cope. “People are just figuring it out,” DeJohn said.