LOCAL SPIN 07.25.13 - Salinas spends $1 million from Cap One in surprising ways.

A little known fact: There are still 225 people working at the Capital One offices in Salinas. The clock is ticking down to their final days there; come October, a few will remain to sweep and turn out the lights. The rest of them will be out of work.

They will join the 782 other former employees given the ax when Capital One, in May 2012, finished its buyout of longtime local employer HSBC and announced it would shutter the former credit-card processing facility, pick up stakes and move the operation to South Dakota.

A question I’m asked more frequently than would seem normal is, “So what happened with all the money Capital One gave to help the workers?” The company, after announcing the firings, promised $1 million to the city of Salinas for what was then described by City Manager Ray Corpuz as “worker retraining.” Somehow, worker retraining became something altogether different. The city started throwing buckets into marketing itself to the state and venture capitalists – especially those investing in ag tech – and a breed of decision maker called a site selector. Site selectors, in corporate parlance, decide where a company is going to move to or expand. Site selectors, to cities trying to bolster their economies, are like gods.

“Salinas has not been at the top of everybody’s list for a long time,” Jeff Weir, the city’s director of Community & Economic Development, said at a press conference Monday to update local media on what’s happened with the Cap One money. “We need to remind [people] at one time we were the center of major manufacturing and we still have the backbone and the infrastructure, we have the location and most importantly, we have the workforce.”

All great stuff, to be sure. But companies really want to know, what else you got? What goodies – what kind of tax breaks, hiring incentives or breaks on permitting – can you give us?

Facebook, when it needed to open a new data center in 2011, went to Oregon because they got a 10-year break on property taxes and a host of other incentives. (“If power were free in California, it would still be cheaper to operate in Oregon,” goes a marketing pitch from data-center outfit Fortune Data Centers, according to a story on OregonLive.com.) Intel announced that same year it would build a $5 billion fabrication plant in New Mexico because the state offered reduced property taxes.

“HOW FAR WILL YOU DROP YOUR DRAWERS TO GET ME HERE?”

“The first question site selectors ask is, ‘How far will you drop your drawers to get me here?’” says Jim Beeger, a 33-year veteran of the dog-eat-dog world of Silicon Valley commercial real estate.

“Yes, they do want to know about the education levels and the workforce and the cost of homes, but the first question is ‘What incentives will the city and other governing bodies give?’” Beeger says. “All they want to know is, ‘What will you do to get us here?’”

Weir reported that so far, the city has met with about a half dozen site selectors, and several expressed interest in learning more about Salinas. A group of city officials traveled to Sacramento in June to meet with representatives of the state Ag Department and the manufacturing trade industry reps. A second group went on a media blitz in San Francisco, slamming out interviews with NPR and The Financial Times, among others.

I asked Weir how the Capital One money had been spent so far. There’s a new slogan (“Grow in Salinas”) and a new website (www.businessinsalinas.com). But he couldn’t give me a breakdown of exact figures and didn’t return two follow-up messages.

Meanwhile, Monterey County’s Workforce Investment Board applied for and received a state grant that carries the unwieldy name “the governor’s 25 percent dislocated worker additional assistance grant” to assist former Capital One employees. The $999,647 in state funds was supposed to allow 185 former Capital One workers to receive special attention from the county and the Shoreline Development Center, and provide at least 80 of them with intensive training. Instead, says WIB Director Joyce Aldrich, 262 former Capital One workers have enrolled in the special program, and 134 have received special worker retraining.

It’s too early for the country to track if and where the newly retrained workers are being hired. Aldrich says they have to wait for three quarters after a worker is laid off to begin tracking employment. The county will apply for a new round of unwieldy named grant funding in August.

Capital One announced July 18 that its Capital One Financial Corp. – the wing that makes loans – had grown its second-quarter income to $4.5 billion from $4 billion a year earlier. That came in part from higher revenue on its credit card business.

MARY DUAN is the Weekly’s editor. Reach her at mary@mcweekly.com or follow her at twitter.com/maryrduan.