Chaffey High School and the Community
A resource for history, news, and events surrounding the Chaffey Community.

 
Ontario puts its chips on high-tech
Officials stake future on computer industry
By Jason Z. Cohen 
Daily Bulletin
Monday, May 11, 1998 
A1, A4, A5
Where vineyard workers once swept wind-blown dust from the floors of their section houses, shimmering air dances on the pavement outside Ontario International's Airport's slender new terminal buildings. 

Nearby, a few orderly rows of untended grapevines remind passers-by of an agricultural past that has been overtaken by the cool green glass of office buildings and the sterile expanse of warehouses.

The air-conditioned, white-collar, high-tech society of the future likely will find a home in Ontario, said Alan Heslop, director of the Rose Institute of State and Local Government at Claremont McKenna College. 

"Ontario needs to take a long look at where it is now, and where it needs to be," Heslop said. "It's been a commuter suburb. It's now attracting new kinds of business." 

Ontario can't help but grow despite its lack of an effective economic-development office. 

"The hottest growth corridor in terms of job creation is the I-15 from Rancho Cucamonga down too Corona," said local economist John Husing. "It's served by all the railways that go through the area, plus the 60 and 10 freeways and the brine line." 

The brine line, also known as the nonreclaimable waste water system, carries salt water to a treatment plant. The chief byproduct of the microchip manufacturing process -- and the most difficult and expensive to dispose of -- is salt water, Husing said. 

Having such a disposal system nearby is a tremendous advantage for a region trying to attract high-tech industry, he said. 

"Ontario should be at the cutting edge of economic development in this region, and it has not traditionally been there," Husing said. "Because the city right now is the hot zone for companies that are migrating to the Inland Empire, it is getting a diverse job base virtually delivered to it." 

The city lacks a coordinated effort at economic development, Husing said. City Manager Gregory Devereaux agreed. 

"A good deal of the growth that has occurred here has occurred because of location and the natural movement of services out of Los Angeles and Orange counties," Devereaux said. "The challenge for us is to keep the economy expanding and evolving and not just settling for the natural course of growth." 

With that goal in mind, Devereaux has hired Mary Jane McLarney, a new economic development manager who he hopes will listen to the needs of high-tech industry. 

"If we don't make sure and understand the clusters of industry we have and try and attract types of industries that interact with them, we won't succeed," Devereaux said. 

What high-tech industries need, Husing said, are other high-tech businesses nearby and a strong academic community from which to draw its employees. 

Companies in such industries as biotechnology, computer components and software production need a high-tech community nearby in order to thrive, he said. 

A city must get involved with the surrounding educational community and get to know its own high-tech firms in order to work with them, he said. 

"In most cases, we just don't have a good handle because these firms tend to be very small and somewhat invisible," Husing said. 

"As opportunities come up and you're talking to other firms, you can introduce them to the local technological community." 

The area is having a bit of trouble attracting workers with high-tech skills. 

"One of the reasons why labor is unwilling to come to the Inland Empire is that people aren't sure if they can get a different job if they don't like the one they're getting," Husing said. 

Husing said the Inland Empire Economic Partnership, of which he is a member, is working on a way to show high-tech workers the job opportunities in the area by creating a Web site that lists available high-tech jobs. 

The city also must be mindful of other industries that may want to move here. Diversity leads to economic health, Husing said. 

"The types of manufactures coming in are all across the board, not too concentrated in any single industry," he said. "One of the things the city must be very cautious of…is not having too many distribution facilities develop that can't be easily converted to manufacturing." 

Devereaux said he recognizes the need to make Ontario's distribution buildings available to the next generation of development: a combination of manufacturing and distribution. 

Ontario also is looking at other ways to enhance it's economy, including trying to attract tourists. 

Traditionally, Ontario has been known as having a distribution economy because of its location near major trade routes, but the city has tried to change the mix of business, said Councilman Alan Wapner. 

"You've seen an absolute transition into commercial and retail activity. That adds to the balance of Ontario and brings in tax dollars," Wapner said. "If there ever is a recession again, because of Ontario's economic base, we'll probably be the last into the recession and the first back out again." 

Ontario, like many other California cities, was forced into some of its economic-development decisions by the political climate. 

With the passage in 1978 of Proposition 13, cities have had to find other means of supporting themselves. 

"Because of the property tax shift from local government to state government, what we've had to do is go out and recoup the sales tax," Councilman Gary Ovitt said. "Anything that doesn't generate sales tax is not as attractive." 

Cities have created incentives to attract car dealerships and shopping centers, and Ontario was among them. 

As early as the 1980s, Ontario opened talks with Mills Corp., the megamall developer. 

The result of that dialogue -- Ontario Mills -- stands at the confluence of two interstates on the city's east side, a shrine to American consumerism. 

"Here we are at the crossroads, and it's come out letter-perfect to what their projections were back in 1986," said Howard Snider, Ontario's former mayor. 

The mall pumped $4.9 million into the city's general fund in 1997. 

The general fund pays the costs of providing police and fire protection, development services and the library. 

In the late 1980s and early '90s, Ontario began to entertain the concept of a cluster of car dealerships. 

The idea made sense: The city gets 1 percent of total sales as its share of sales tax. For a $10,000 car, that means $100 in sales tax revenue to the city. 

"With the price tag of cars today and the number of cars sold used and new, that's a ton of money," said Ellingwood, who was mayor of Ontario in the early 1980s. 

Although sales tax pays the government's bills, a city needs a solid core of industrial and service businesses to pay the rent for its residents. 

Ontario got an early start with industrialization and later learned the downside of depending on large industries. In 1906, Earl H. Richardson developed the electric iron, then started his own company, Pacific Electric Heating Co. In 1933, he sold the company to General Electric. 

In 1982, GE closed the plant, laying off about 1,000 workers. 

Recessions in the early 1980s and early 1990s stunted the city's growth and robbed it of another large employer, Lockheed. The recessions also put the kibosh on residential construction in the area, which was beginning to reach a healthy pace, researchers said. 

"Ordinarily, what happens is business follows that residential development," said Heslop. "The problem for the Inland Empire was that the residential development of the '80s was succeeded by the recession of the early '90s. That interrupted the normal succession of business." 

Now businesses are moving their plants closer to where employees live, making commutes shorter and bringing growth to outlying areas, Heslop said. 

He predicts that Ontario's future will be built around the minicompany, a cluster of small companies with niche products marketed through large, national retailers. 

 

 

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