Countrywide Ends Plans to Grow in State By SHELLY GARCIA Senior Reporter Prompted in part by the rising cost of doing business in California, Countrywide Financial Corp. will cease further expansion in the state after it builds new facilities in Lancaster, company officials said. Business taxes and wage rates, the cost of living, lack of affordable housing and recent legislative changes in family medical leave provisions are among the issues the Calabasas-based company’s officials say discourage further growth here. “We are still looking (for more space) but not in the state of California,” said Patrick Benton, executive vice president for Countrywide. “It’s just getting too costly and too hard to do business in California.” Benton said the company’s recent signing of deals to build two new facilities in Lancaster will be the last in California before it pursues other areas of the country, mainly Texas and Arizona. The local deals are the company’s first foray into the Antelope Valley and are part of a series of expansions that have brought Countrywide locations to several of L.A.’s surrounding cities. The company closed a deal for a 102,000 square foot build-to-suit in Lancaster Business Park in July, and last month Countrywide signed another deal for a second facility of the same size with developer VFF. “I became aggressive and went to them, and they liked what I had to offer,” said Frank Visco, principal of VFF, which owns about 12 acres in the 240-acre business park on Division Street between avenues K and L. So far, about 590 workers are employed in Countrywide’s Lancaster offices, which house the company’s loan servicing operations. But the company is in the process of staffing up its first building to a capacity of 800, and the employee count will reach 1,600 when the second building is completed and staffed. “Many workers live up there because it’s a little less expensive,” said Benton. “Yet they spend hours on the freeway traveling to their employment. We were able to offer local employment and improve their quality of life. That was one of the drivers that made sense to us.” Countrywide’s revenues have nearly doubled since 2001 to $4.5 billion for the year ended Dec. 31, 2002 as the company has expanded into a variety of services beyond its core business of home mortgages. Earnings have risen 57 percent for the same period to about $842 million. Countrywide’s businesses now span insurance, securities, banking and a global lending division in addition to its mortgage banking and loan closing services units. Its workforce has ballooned to nearly 30,000 employees as of Jan. 2003, up from 18,000 at the end of 2001. The company has been so hard pressed to keep up with its burgeoning space needs that, on some days when meetings bring extra workers to its Calabasas headquarters offices, cars must be stack parked by valets. Countrywide, which operates four sites in Calabasas, moved into Simi Valley in 1992, becoming the largest employer in that city, and also added offices in West Hills and Thousand Oaks. Late last year, the company acquired the former Litton offices in Agoura Hills, a move that will add 165,000 square feet of offices to its portfolio when the renovation is completed. The move into Lancaster gives Countrywide access to a large workforce and the benefits of Antelope Valley’s Enterprise Zone, said Anne Aldrich, a spokeswoman for the city of Lancaster. City incentives The Enterprise Zone offers more than $31,000 in hiring tax credits per worker, among other benefits. Such incentives have helped to fill up Lancaster Business Park, a 240-acre complex that houses some 80 companies, including Deutrel Industries Inc., makers of nutritional supplements, Lance Camper Manufacturing Corp. and Deluxe Corp., a check printing company. “The pace is picking up,” Visco said of the development climate in Lancaster. “I definitely feel there’s a lot more demand and prices are rising.” As an added incentive, the city of Lancaster also gave Countrywide use of one of its two sky boxes at Lancaster Municipal Stadium, home of the JetHawks, for two years when the company made the deal for the first build-to-suit. Lancaster officials said they wanted to assist the company in its networking efforts with other members of the city’s business community. “It’s to help them get integrated into the community quickly,” Aldrich said. Although Countrywide’s growth shows no sign of stopping, it will be located elsewhere, Countrywide officials said. The company, which has been operating in Plano, Texas since 1993, is under contract for a 190,000 square foot facility in Plano and a 75,000-square-foot facility in Phoenix. “There’s too many negative implications,” Benton said about doing business in California. He added, however, that the company intends to keep its present facilities in the state, including its Calabasas headquarters. Benton added that in addition to wanting to avoid the costs of doing business in California, diversifying outside the state is simply good business practice. “We left California to set up an operation in Plano in 1993 to provide backup if some sort of local disaster were to affect our operations,” said Benton. “It doesn’t do our customers any good to explain that we had an earthquake.” Places like Plano and Phoenix are not plagued by the same scarcity of land for development and their higher unemployment rates make it easier to recruit a workforce in the numbers Countrywide requires. “Some of it is just getting into another untapped market,” said Benton. “We’re maxing out some of our areas in terms of capturing the workforce. We have continued to grow very rapidly, much faster than the population around us has grown. At some point, we’ve got to spread out a little bit.”
