When it comes to setting up a business headquarters in Los Angeles, El Segundo is not the first place most people have in mind.

With the Los Angeles Times relocating from its historic downtown headquarters to a 120K SF office building on Imperial Highway in El Segundo this month, the tiny city of just five and a half square miles in southwestern Los Angeles County with a population of 17,000 residents, is in the spotlight.

There are two kinds of people — those that know about El Segundo and those that don’t, CBRE Senior Associate John Lane said.

“A lot of people don’t know about this place, but for people that do, they know it’s a great place for families with good school districts,” Lane said. “They have a great reputation of taking care of their businesses.”

A former industrial hub, in recent years El Segundo officials have been aggressively promoting its aerospace and tech business climate and seaside lifestyle. The city is home to several aerospace giants, including Boeing, Lockheed Martin, Raytheon and Northrop Grumman.

AT&T, Chevron, Mattel and Xerox also have offices in El Segundo. And it is also known as the home of the corporate offices of the Los Angeles Lakers and Los Angeles Kings and now the Los Angeles Times.

There are glitzier locations, like downtown Los Angeles, Hollywood, Santa Monica and Burbank. But this sleepy seaside city, more known for its proximity to the Los Angeles International airport, has some ears perking up.

Last month, El Segundo changed the zoning of a 120-acre industrial neighborhood called Smoky Hollow to creative offices and light industrial. The plan will support a total gross property development of 2.97M SF of office and light industrial space.

The city also renamed its Sepulveda Boulevard to Pacific Coast Highway to connect the city with other coastal communities up and down the state.

“We wanted to emphasize our coastal location and our connection to this famous highway that is internationally known, and an emblem of the California coastline,” City Manager Greg Carpenter said.

Driving the business climate is El Segundo's proximity to Silicon Beach and friendly corporate tax breaks.

Lane said businesses like design firms, architectural companies and others are drawn to El Segundo's attractive average office lease rates of about $3.30 per SF compared to pricier locations such as Santa Monica, which nets more than $5 per SF.

Additionally, Lane said, the city offers a favorable corporate tax break. According to the city, a business license tax can be reduced and/or eliminated if El Segundo is used as a point of sale.

"I think the LA Times and others have chosen us because of our relationship and reputation as a business-friendly environment," El Segundo Economic Development Manager Barbara Voss said. "We have other companies that started in Main Street and other areas of the city that love doing business here. I think our location and services that we provide are proving to be attractive."