When I wrote last November about Local Motors, a Wareham start-up that was crowdsourcing the designs for a new line of cars, founder and CEO Jay Rogers mentioned that the company would likely set up its first production facility in Arizona, lured by government incentives.
The move happened this spring, I'm told, but it also included the company's headquarters staff and most of the company's handful of employees. (Two people focused on Web site maintenance and finance remain in Massachusetts, but without an office.)
The company had been located next door to Wareham's Factory Five Racing, one of the country's biggest manufacturers of kit cars, and the co-founder of that company has been a big supporter of Local Motors, financially and otherwise.
I talked to Rogers this morning, who told me that the relocation had nothing to do with labor costs in Massachusetts, and said that the company eventually hopes to open one of its regional "micro-factories" here.
In Massachusetts, Rogers said he founder the Governor's office unhelpful. In Arizona, by contrast, "the Governor and the local municipality reached out to us, offered help with permitting, and with the application process for the federal Advanced Technology Vehicles Manufacturing Loan Program." In Arizona, the company was offered sales tax rebates and several hundred grand in cash, Rogers says, to make improvements to Local Motors' 20,000 square foot facility in Chandler, Arizona, just southeast of Phoenix.
"We had a number of meetings with economic development officials in Massachusetts," Rogers says. "We met with people and met with people, and there was basically no action. It's like there wasn't any seriousness about keeping our business in Massachusetts."
Update: Kofi Jones, director of communications at the state's Office of Housing and Economic development, writes in an e-mail that "business retention and expansion is a top priority of the Patrick-Murray Administration, and we have had great success with companies like Cisco, IBM, and Liberty Mutual. After meeting with Local Motors and their consultant, the Administrationís economic development team presented the company with an incentive proposal. Although we did not receive any feedback on the proposal, we remain prepared to work with Local Motors on any and all future opportunities."
Rogers says the company currently employs a dozen people, and plans to eventually employ 50 to 60 in Chandler. Local Motors will begin delivering its first vehicle, the $50,000 Rally Fighter (pictured above, with Rogers), to customers this August, he says.
Another factor in the company's westward migration is that the Rally Fighter is intended for off-roading. Ariel Ferreira, a Local Motors spokesperson, writes via e-mail that "...we're 100 percent certain we're doing the right thing by building the Micro-Factory and Rally Fighter in the place where it is meant to be driven; the place where majority of customers for this vehicle reside."
They'll be holding an open house at the new digs in Arizona July 31st. Stop by if you're in the neighborhood...
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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December 9: Web Innovators Group
Demos of new mobile apps and web ventures at the Royal Sonesta Hotel in Cambridge. Free admission; cash bar.
December 10: Fintech Demo Day
Short demos from startups in the financial technology realm.
December 11: Unpitch
Entrepreneurs and investors sit down for lunch, advice, and feedback. Entrepreneurs must apply to participate.