With Future Uncertain, City Approves Business Support Team for Molina Healthcare

 Molina2

The Molina Center in Downtown Long Beach serves as the healthcare giant's corporate headquarters. Photos: Asia Morris 

With questions surrounding the future of one of the city’s largest employers, the Long Beach City Council voted unanimously Tuesday night to assemble a business support team in an effort to ensure that Molina Healthcare remains in Long Beach.

The request came from Sixth District Councilman Dee Andrews who asked the council to give the healthcare giant the same attention and retention efforts that the city gave to Boeing’s C-17 program. The item was co-sponsored by Council Members Lena Gonzalez, Daryl Supernaw and Vice Mayor Rex Richardson.

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“Molina Healthcare has been a wonderful partner to the city of Long Beach, while we do not know what their next steps are, I want to attempt to have our city reach out to Molina and see what type of assistance we may provide,” Andrews said.

The item calls for the city and other county and state entities to work jointly to develop a strategy and to identify all available benefits of Molina keeping its headquarters in Long Beach.

For 35 years the company has called Long Beach home and has recently expanded its operations North of Ocean Boulevard—its main offices–to Pine Avenue where it signed an 11-year lease in 2013 to take over the Meeker-Baker and Press Telegram Buildings between Sixth and Seventh Streets.


 

Andrews’ request comes after months of turmoil at Molina including the May firings of J. Mario Molina and his brother John C. Molina as chief executive officer and chief financial officer respectively by Molina’s board of directors.

While the two brothers remain as directors of the board, the future of the company has become uncertain. Rumors have swirled that the company has been a target for a possible acquisition by another healthcare provider with one of the main roadblocks to such a deal being a potential block by Molina family members.

Molina1Mayor Robert Garcia said that in his private discussions with Molina’s interim CEO, Joseph White, White has expressed no interest in leaving the city despite the company’s recent move to ship 400 jobs across the Vincent Thomas Bridge to San Pedro.

“He [White] wanted to be clear in our conversation and I was clear with him that Molina Healthcare is one hundred percent committed to Long Beach and Long Beach is one hundred percent committed to Molina Healthcare,” Garcia said.

The vote, while unanimous, did not come without resistance from a few council members. Seventh District Councilman Roberto Uranga asked what efforts would be included in such a push by the city. Would it mean tax breaks, land deals or other measures to keep Molina planted in Long Beach?

Ultimately, Uranga said, Molina is a private entity and it’s “their prerogative” to stay or go. However, he added that the city putting forth such an effort to keep them could send the wrong signals to other large businesses in the city.


 

“It’s creating a precedent for other businesses that might say ‘I want to leave Long Beach but if you help me I’ll stay’,” Uranga said. “It starts a slippery slope where we have other kinds of businesses wanting to have that kind of same assistance that we give to one entity. I’m not sure that’s the direction I want to go on this.”

Eighth District Councilman Al Austin joined Uranga in his skepticism. Austin recalled a similar effort in the mid 90s surrounding the city’s efforts to keep Boeing in the city. He echoed Uranga’s remarks that as a private entity Molina, like Boeing, is free to go wherever the market is more profitable for its corporation.

“Boeing made decisions to leave anyways, based on markets and whatever else and we had every resource in place to do that,” Austin said. “Private companies are loyal to one thing, and that is their profits. I’ve seen 40,000 plus jobs leave Long Beach, and we had this same model in place to keep it in place.”

Given that there have been no public signals that Molina intends to leave Long Beach, Austin said that the formation of such a team is unnecessary at this point and proposed a substitution motion for the drafting of a resolution pledging the city’s support of Molina.

That motion failed with only Austin and Uranga voting in favor of it.

The “business support team”, as it was recast from the original language in the motion, will report back to the council on its findings regarding avenues to provide support for Molina from the city going forward. The presentation is expected to take place within the next 120 days.

 



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