Really Right Stuff, which has manufactured photography equipment in San Luis Obispo for close to two decades, is moving its operations to Utah — at least in part because of local housing prices and the business environment in California.
"Continually rising costs in California make it tough for a small business to compete in the global economy," CEO Joseph Johnson said in a statement in February announcing the departure. "We love beautiful San Luis Obispo, but our employees can’t afford to buy a home."
Johnson elaborated on that decision on Friday, as the company was in the final stages of preparing for its move at the end of the month.
"We have been in this area for 27 years," he said. "I'm a native Californian, so it's not something that we take lightly. We didn't want to move. Nobody wants to leave San Luis Obispo. It's just a lot of factors that weighed into it."
Really Right Stuff opened in San Luis Obispo in 1990 under then-owners Bryan and Kathy Geyer. The Geyers sold the company to Johnson in 2002.
The company purchased its current location on Farmhouse Lane in San Luis Obispo in 2013, with plans to expand further in the future.
That's not how it shook out.
After investing about $50,000 to begin expansion in San Luis Obispo, and being denied a California Competes tax credit from the state, Johnson decided to switch courses and relocate to any area with more favorable business conditions,he said.
"It's just an ongoing battle trying to be a small manufacturer in California," Johnson said. "I finally just gave up. We felt pushed out."
Additionally, Johnson said he had two employees quit because they could not afford to buy a home in San Luis Obispo County, One of those people moved to Bakersfield, while the other stayed with the company after Johnson shared he was planning to move the business to Utah.
Utah has consistently been at the top of lists of business-friendly states in recent years, ranking third in Forbes' "Best States for Business in 2017." (California was No. 31 on that list.)
Really Right Stuff will be headquartered in Lehi, Utah, where the company will move into a building more than twice as large as its current spot, Johnson said.
Housing for Really Right Stuff workers will also be significantly less expensive in their new hometown. According to real estate website Zillow, the median listing price for a home in Lehi is $381,950, compared with $754,500 in San Luis Obispo.
Of the roughly 40 employees the company had before announcing the move, 16 will be relocating with the business. Johnson said those workers were offered incentives to stay with the company through the move.
Employees who chose not to relocate were given severance packages, he said.
Really Right Stuff's move will be completed by the end of July.
Melissa James, director of economic initiatives and regional advocacy with the San Luis Obispo Chamber of Commerce, said on Thursday that the local chamber was " acutely aware of the challenges that businesses in our community and across the state face."
"While we are heartened by recent progress in creating additional housing opportunities and improving infrastructure in San Luis Obispo, we recognize there is much more that needs to be done and it will take continuous focus and collaboration with partners across the region to improve the conditions for businesses to thrive," she said.
Really Right Stuff is the third major manufacturing company to close up shop in the county this year. In January, specialty rifle manufacturer Weatherby Inc. announced it was relocating to Wyoming from Paso Robles after 30 years.
Military giant Lockheed Martin is also leaving San Luis Obispo, though the circumstances of that departure are unclear.
Michael Manchak, CEO of the San Luis Obispo County Economic Vitality Corporation, described the loss of another large local company as a "very bad thing."
"In one year to lose three companies is obviously a very bad thing, in relation to the size of the county we have," Manchak said. "So the question becomes how do we prevent this from happening in the future and how do we learn from this?"
Manchak said high housing costs are one of the biggest hurdles for local companies looking to expand, and one of the top cited reasons that companies consider leaving the area.
"Business owners and leaders in the area have said time and time again that there are areas of concern in doing business here," he said. "Those are employee attraction and employee retention. Retention comes in because it is very expensive to live here, as you know."
To counter this, Manchak said, local stakeholders need to come together to work on increasing housing options for potential workers. This would in turn make it easier for companies to attract high-quality workers.
The good news? San Luis Obispo and its surrounding cities are already aware of the workforce housing dilemma, and are actively working to fix it, Manchak said.
"Can we do something about state regulation? I don't know," he said. "Can we do something about housing? ... There are projects on the books and they are building things. We are chipping away at that problem."
It's all too little, too late for Johnson and Really Right Stuff.
"It's highly unlikely (that) we are ever going to move again," Johnson said. "It would be nice if the business environment were friendlier in the first place, so we didn't feel we had to move, but unfortunately that's just not the case.
"We love San Luis Obispo and we intend to be back often," he added. "Parting is very much sweet sorrow: sweet in that we are going to a new place in Utah, but sad we have to leave."