Who Lost High-Tech?
In its lead article on Sunday, July9, the Orange County edition of the Los Angeles Times asserted that the county is finally waking from its decades-old dream of becoming Silicon Valley South.
"Few now mention Orange County in the same breath as hot spots such as Seattle, Austin, Texas, or Washington, D.C. In Internet circles, it is a dot-yawn," wrote reporters Edmund Sanders and P.J. Huffstutter. "What happened?"
The pair's "Dreams of High-Tech Glory Passing OC By" posed an excellent question. Unfortunately, the story—which is solid on evidence of the county's inability to attract an impressive number of emerging high-tech start-up companies—failed to fully answer it. But that's not surprising because part of the blame rests with the county's largest developer, the Irvine Co.
It seems whenever the media-savvy Irvine Co. is a potential villain in a major story, Times OC journalists hit an unusual form of writer's block. For years, local reporters—perhaps overly impressed by the Irvine Co.'s cocktail-party glad-handing, glossy brochures and juicy gossip on opponents—have swallowed the company's press releases and then unquestioningly regurgitated the self-serving spin onto the public.
Examples are plentiful, but a recent one is particularly illustrative. For almost a decade, the Irvine Co. has been promising to give local schools (which the company's highly profitable luxury housing developments have flooded with students) millions of dollars in gifts to help alleviate overcrowding. By our last count, in April of this year, the Times and The Orange County Register had published at least 20 separate rah-rah stories about what might have been the same pledge (see "The 'Gift' That Keeps on Giving," May 12; see also a letter from a company defender, June 9). The company's public-relations brain trust declined our repeated requests to show actual documentation of the donations—other than the Times and Register stories.
In its front-page story on the high-tech letdown, the Times credits the Irvine Co. with attracting "scores" of high-tech firms to the Irvine Spectrum, the centerpiece of the county's technology push. And, importantly, it reported a significant reason why more companies are not interested in relocating or starting up at the Spectrum: "the powerful developer left out a few things, such as trendy nightspots and the kinds of snazzy meeting places where tech ideas and money often meet in the Bay Area. . . . Others put it more bluntly: Orange County's a snooze."
Their 2,800-word story then inexplicably changes subjects. At no time did Sanders and Huffstutter press the company to explain its glaring mistake or to address how it will solve a problem described so clearly by entrepreneurs who (according to the article) chose to launch their start-ups on friendlier territory. The next time we hear from the Irvine Co. is 31 paragraphs later, when company executive Dick Sim laughably explains that their lack of success is actually a blessing in disguise for the county: "We'll weather the down times better." What never goes up never comes down.
But the most shocking omission by the two business reporters dealt with elementary capitalism. Nowhere does the pair even hint that another major factor scaring off emerging high-tech businesses is that one company operates a near monopoly on land in the designated high-tech zone centered in Irvine. That company—and I think we all know who we're talking about—charges comparatively steep rents for commercial office space and routinely offers speculative renters heavy-handed leases. What budding high-tech business would want to enter into a smotheringly one-sided contract with a company that is accustomed to dominating everyone it does business with?
Even well-established, multibillion-dollar high-tech firms are looking elsewhere. Western Digital, for example, recently announced it was moving out of an Irvine Co.-owned high rise at the Spectrum in order to save tens of millions of dollars in annual rent.
That simple economic point was as lost on Sanders and Huffstutter as it was on Wallace Walrod, a flack for the Irvine Co.'s lobby machine, the Orange County Business Council. Disturbed by the story's suggestion that OC is a comparative snooze, he told the Times OC, "We have everything anyone would want: great weather, a highly skilled work force, a strategic location and wealthy people who spend money. You don't need anything more than that."
Apparently, Wallace, you do.
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