While a sagging economy and the dot-com crash have impacted the economic landscape across the country, California's highly diversified economy - bigger than all but four nations in the world - continues to thrive.

In a typical economic slowdown, companies react by scaling back or eliminating costly investments in new facilities. They also often delay expanding into new markets, causing regional economic development agencies and local governments to turn inward and focus on retaining the companies - and jobs - already in place.

That doesn't appear to be the case in California.

"It's like we were going 100 mph and now we're only going 60," says John Dittmer, business development director for the Inland Empire Economic Partnership. "Can you really call that a slowdown?"

The Inland Empire, which includes San Bernardino and Riverside counties east of Los Angeles, certainly isn't showing any ill effects. Recently, ARS National Services, Inc., General Motors, Kohl's, Magnussen Presidential Furniture, Quebecor World Inc., Sabert Corporation, Superform USA, and Walgreen Co. have all increased their presence in the area.

And it's much the same story in La Jolla, Sacramento, Redding and the rest of the state, where companies like Verizon Wireless, Blue Shield of California and Pfizer, Inc. are in the process of building new facilities.

Delivering the goods

In the city of Moreno Valley, Walgreens is constructing a 680,000 square foot distribution center that will serve more than 250 of the company's drugstores in southern California, Arizona and Nevada when it is completed in early 2004.

About 200 employees will be hired initially for the center, but future expansion could mean as many as 600 new jobs in the long term.

"We chose this site because of its proximity to major highways serving southern California and because of the area's skilled work force," said Jodi Dalton, Walgreens senior real estate manager, in a release issued by the company.

The distribution center will be equipped with the newest technology in automated storage and retrieval systems. It will include about 14 miles of conveyor belts, as well as sophisticated sorting and storage rack systems.

Magnussen Presidential Furniture is building its new North American distribution center in Riverside's Sycamore Canyon Business Park.

The 400,580 square foot facility represents a $14 million investment that will bring 80 to 100 new jobs to the area.

Magnussen spokesperson Ron Carpenter said the company, which currently operates two separate warehouses in the region, receives much of its inventory from manufacturing facilities located in the Philippines and China.

"The only other real alternative would have been to locate our distribution center on the East Coast," Carpenter said. "But it is much more economical and it improves our service times to bring these products directly to the West Coast rather than shipping them all the way to the East Coast. The Port of Long Beach is really the preferred port."

The Port of Long Beach is one of the world's busiest container cargo seaports and is the leading gateway connecting the United States with Asia. In 2001, $94.7 billion in trade moved through the port, making it the second busiest port in the United States and the eighth busiest in the world.

Also consolidating its West Coast operations is Sabert Corp., a New Jersey-based company that makes plastic serviceware, such as platters, bowls, plates and containers.

Sabert recently opened a new 120,000 square foot manufacturing and distribution center in Riverside's Hunter Business Park that will cut the company's shipping times to its West Coast customers.

"Sabert settled on Riverside because of its proximity to several major highways, its enterprise zone incentives, a strong labor pool and stable supply of low-cost electricity," according to Gary Ziznewski, the company's vice president of finance.

Ziznewski said the company looked at sites outside of California, but none of them made sense.

"It was pretty much going to be California," Ziznewski said. "We took a cursory look at Nevada but because of Riverside's proximity to our customers, the Inland Empire was much more reasonable."

To help secure the project, the city of Riverside helped Sabert obtain industrial development bond financing and the city's public utility provided an economic development electrical discount rate that will save the company nearly $300,000 over the next four years.

Kohl's and General Motors are also in the process of constructing distribution centers. Kohl's is building a 650,000 square foot facility in San Bernardino to support the company's plans to open approximately 80 department stores in the southwestern United States in 2003.

Meanwhile, General Motors is building a 404,000 square foot parts distribution center in Rancho Cucamonga to serve more than 335 GM dealerships in Arizona, California, Nevada and Utah.

Prescription for success

Pfizer, Inc., the world's largest pharmaceutical company, has broken ground on a new research and development campus in La Jolla, located north of San Diego. In the last two years, Pfizer has invested $155 million at the site. In all, eight buildings are to be constructed that will cover a total of 800,000 square feet and house 1,000 scientists.

Pfizer's commitment to California is just one part of the growing biotech sector in the state. Second only to agriculture, the biotech industry includes more than 2,500 health care technology companies in California, employing more than 225,000 people.

Making A House Call

In Redding, 150 miles north of Sacramento, Blue Shield of California announced in May that it plans to open a $13 million regional administrative office center in the summer of 2003.

The new office will begin with 400 employees, but that total could expand to 1,000 in the future with current plans calling for two more buildings to be constructed at the site.

Bob Robertson, the company's operations manager, said Blue Shield looked at several locations around the state before choosing Redding.

"There were initially 30-plus locations that our workplace strategy evaluated," Robertson said. "The Bechelli location best met our short, intermediate, and long term needs."

Dan Perkins is a freelance writer based in St. Louis, Mo.