10:58 AM PST on Thursday, April 1, 2004

Associated Press

MEDFORD, Ore. -- Oregon Gov. Ted Kulongoski is facing off with California Gov. Arnold Schwarzenegger over a California organic food company that's considering a move to Medford, bringing along several hundred jobs.

Arnold Schwarzenegger makes a point during a debate. (AP File Photo)

Kulongoski sent a letter last year to Andy and Rachel Berliner, owners of Amy's Kitchen in Santa Rosa, Calif., urging them to move their business to Oregon and save almost $4 million in workers' compensation claims, utility charges and taxes.

The governor has also made a personal phone pitch to company executives, but Schwarzenegger countered with his own phone call, in which he promised to lessen the burden of workers' compensation claims in California.

The Berliners said they welcome the attention -- Kulongoski had even planned to pay them a visit but scheduling problems forced him to cancel, and a representative from mail order fruit dealer Harry and David's has visited to promote Southern Oregon.

"It's a good feeling," said Andy Berliner. "It's nice to be wanted."

Amy's will give Schwarzenegger until November to see if he is able to push a cheaper workers' compensation package through the California Legislature, said Berliner. The company would pay $2.4 million less by moving to Medford.

Schwarzenegger also promised that if the Legislature doesn't do anything, he would promote a ballot initiative in November to bring about workers' compensation reform.

However, Berliner said the 750-employee company also had other considerations that make Medford a good option to relocate the more energy-intensive portions of their business.

"Initially we would start out with about a few hundred workers and gradually grow from there," he said.

The cost per kilowatt-hour in Medford is less than one-third of Santa Rosa's, which would save $1 million annually, according to Berliner. No sales tax would save an estimated $225,000 and state income taxes another $148,000.

The company, which now has a 107,000-square-foot facility, produces everything from frozen foods to soups and pasta sauces.

Amy's, named after the couple's daughter, generates annual revenue of $100 million and has doubled the number of employees in the last five years. It has tried to limit growth to 25 percent a year.