El Segundo, a city in California’s South Bay near Los Angeles International Airport, is moving away from its long-standing image as a refinery and heavy industry town and toward a high-tech business cluster, according to ABMedia. The report says companies such as SpaceX have helped draw in technology, finance, sports and toy businesses, reshaping the city’s industrial mix.
SpaceX brought in technical talent
ABMedia said SpaceX’s presence in El Segundo brought a large pool of high-skilled workers into the area. While the company later shifted its headquarters operations to Texas, it still maintains an important operating base in Hawthorne.
The report says incoming startups now cover frontier sectors including orbital pharmaceuticals, nuclear reactors and automation equipment. Those businesses have filled part of the gap left by the contraction of the aerospace industry in the late Cold War period, while also sitting alongside Mattel’s toy manufacturing business and elite professional sports training centers in a more diversified local ecosystem.
Former employees helped build a startup cluster
The area is also strengthening its role as a center for space and defense technology innovation, the report said, with a number of advanced companies founded by former SpaceX employees.
One example is Varda Space Industries, which uses microgravity in orbit for advanced pharmaceutical processing and has grown enough to take over a large local factory. That site was previously used by Mattel as an R&D base for Hot Wheels and Barbie.
ABMedia said companies founded by former SpaceX engineers now span several advanced technology fields. They include Radiant, which focuses on small nuclear reactors; Shinkei Systems, which develops intelligent fishing robots; and Arbor Energy, which works on converting biomass waste into energy. Their arrival has added fresh industrial momentum to the city.
Business-friendly tax policy helped attract firms
The report also highlights El Segundo’s local policy framework. Mayor Chris Pimentel told the Los Angeles Times that the city, with a population of about 17,000, is thriving because of its large businesses, small-town charm and residents who take an active role in public affairs.
ABMedia said a shift in local governance and management thinking was one of the key drivers behind the city’s industrial transition. Rather than following nearby cities in imposing a gross receipts tax, El Segundo relies on fixed annual fees based on company size. The report says that policy has helped attract white-collar service firms including law offices, accounting firms and financial institutions.
Local government has also directed revenue into infrastructure, synchronized traffic signals and emergency medical systems to keep public services efficient.
Population and housing demand have risen
As more branch offices and headquarters move into the city, both population and housing demand have increased, according to the report. Citing real estate data, ABMedia said the local residential vacancy rate remains low at 3.4%.
Key points cited in the report
- El Segundo is shifting from a refinery and heavy industry base to a more diversified center spanning aerospace technology, finance, sports and manufacturing.
- Former employees from companies such as SpaceX have helped launch more than 100 startups in the area.
- The city does not impose a gross receipts tax and instead charges annual fees based on company size.
- Fee revenue has been directed into transportation and public safety infrastructure.
- The residential vacancy rate stands at 3.4%.