County struggling to retain homegrown companies 

San Mateo County is a good place to start a business for a number of reasons. It ranks second nationwide after Santa Clara County in terms of overall venture capitalist investments, and has a vibrant community for biotech, software, IT and other firms.

Yet while schools, airports and good weather are other dividends, many companies nonetheless decide to leave the county once they make it — a plight the county shares with San Francisco and Santa Clara counties.

A San Mateo County Economic Development Association report released last week found that between 1995 and 2010, county-based firms have reduced their local staffs from 55 to 46 percent of their total workforces.

The reason that local companies end up leaving is no mystery.

It costs more to live, employ and rent in San Mateo County than most other places, especially East Bay counties such as Alameda, which imported 10,000 more jobs than it exported between 1998 and 2008.

Caroline Cheung, a management analyst for the city of Brisbane, said the impending departure of chemical distributor Van Waters & Roger, which was lured by tax breaks to move to Visalia, will reduce city revenues by 18 percent, yet there’s little the city can do.

The company’s departure came as a surprise to city officials, who now plan to meet more frequently with local businesses to “keep the relationship active,” Cheung said.

Linda Asbury, president of the San Mateo Area Chamber of Commerce, has watched San Mateo lose big companies such as YouTube and AdMob, adding that the city has trouble retaining big firms because it lacks adequate Class A office space.

“We can’t compete with what they get in the Central Valley or Arizona,” Asbury said. “What we can do is work the ones who are here and save who we can save.”

Belmont Community Development Director Carlos de Melo remembers when Oracle left Belmont, but said nothing like that has happened since. Instead, he notes, some big players have moved into the city, including SunEdison, which will open its doors very soon and gradually create hundreds of local jobs.

“We have to hold hands with these companies,” de Melo said.

In an average year, fleeing companies reduce county employment by 12.5 percent, well above the 9.1 percent added by businesses moving in, according to the report.

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Niko Kyriakou

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