The California statewide plastic bag ban that passed in 2016 inspired Carlsbad entrepreneurs Farzan and Jennifer Dehmoubed to develop a better way to bag groceries and eliminate plastic waste.
The couple developed a product consisting of four reusable polypropylene bags that roll out like an accordion in shopping carts to help shoppers organize their purchases and check out of grocery stores more quickly. Today their Carlsbad company, Lotus Trolley Bag, sells the product in numerous supermarkets, including Vons and Ralphs, as well as on Amazon.
The startup continues to grow, thanks in part to a recent $110,000 California Competes state income tax credit. Each year, Carlsbad businesses have an opportunity to receive a significant economic boost from the California Competes program.
The program helps businesses within the state expand and create additional jobs. A total of $236,808,527 in California Competes tax credits are available for allocation statewide in the 2019-2020 fiscal year.
In Carlsbad, money that would have been paid in taxes has been put to work increasing the coastal city’s employment base and creating high-paying jobs. Since 2015, more than $14 million in California Competes tax credits that would have been spent on taxes has been earmarked to provide jobs for 1,020 additional Carlsbad employees. Those workers, in turn, will invest their earnings back into the local economy. Statewide, the program has provided nearly 1,000 awards worth $890 million to create almost 100,000 new jobs, according to a report from State Sen. Toni Atkins. In San Diego County, companies have received 180 tax-credit awards, since 2014.
For the founders of Lotus Trolley Bag, winning the California Competes tax credit “was exciting for us as a small business and definitely very helpful,” said Farzan Dehmoubed. The credits will be awarded in phases, as the business meets yearly employment and investment goals.
“We’ve already hired multiple people and met our goal for the next three years,” he said. “We are actively looking for more people to help us grow and scale the business and make it a national and international brand.”
“We consider Carlsbad the sweet spot of the universe,” he added. “It has become our little paradise. There is no other place we want to live and have our business. There is a huge amount of people who believe in our cause and our mission around keeping a beautiful environment and planet.”
Being in Carlsbad has given Lotus Trolley Bag access to a large pool of qualified employees, he noted.
“We have good access to talent,” he said. “We have no plans to move our offices anywhere else. It’s a great place to live and work and create. The community has been very supportive.”
He recalled that and his wife moved to Carlsbad in 2009.
“Like most people we came to Carlsbad because of the beautiful and pristine beaches and a laid-back culture that appreciates families,” he said. “It’s a very family-oriented city.
The City of Carlsbad’s assistance made applying for the California Competes the tax credit easy, he added. “Definitely the City helped in many aspects.”
Recent California Competes award recipients in Carlsbad also include MilliporeSigma, which won a tax credit of $4 million; CHC Consulting, LLC, which received a tax credit of $2 million; Bitchin’ Sauce, which received a tax credit of $1.75 million; Cerner Corporation, which received a tax credit of $1.5 million; and Custopharm, Inc, which received a tax credit of $1 million.
An Alliance of City Governments
North County California Competes applicants have the support of Innovate78, a collaboration between the cities of Carlsbad, Escondido, Oceanside, San Marcos, and Vista. The program aids businesses along the state Route 78 Corridor.
“We work primarily with companies that are already here and trying to grow,” said Kierstin Rielly, Program Manager for Innovate78 at the San Diego Regional Economic Development Corporation. “Helping companies secure a tax credit is a great way for us to stimulate the local economy and assist in job creation.”
The application process for California Competes is simple, Rielly said. In part, applicants must state the number of additional employees they plan to hire over the next five years, the amount they will be paid, and the amount of money they will invest into their businesses. Here are the upcoming applications deadlines:
- From July 29 through Aug. 19 of 2019, the statewide program will accept applications for $90 million in tax credits.
- From Jan. 6 through Jan. 27 of 2020, applications will be accepted for $75 million in tax credits.
- March 9, 2020, is the deadline for applying for $71.8 million in tax credits, plus any unallocated amounts from the previous application periods.
A Saucy New Company
Earlier this year, Carlsbad’s Bitchin’ Sauce won its $1.75 million tax credit as part of a pledge to create 76 jobs. Company CEO Starr Edwards began making Bitchin’ Sauce in 2004 and sold it at a local farmer’s market. Today, Bitchin’ Sauce is sold by food retailers nationwide.
“We heard about the program from the City of Carlsbad and the MetroConnect program,” Edwards said. “This grant has allowed us to proceed with our growth projects, including building expansion and hiring.”
Edwards, who runs her family-owned company with three siblings, said she appreciates Carlsbad’s many good qualities.
“Bitchin’ Sauce started out in Carlsbad,” she said. “We love the community, and the sun, and the surf.”