Bringing industry back to Oakland

So something I’ve really wanted to write about for a while and never got around to is to actual barriers to industrial business attraction in Oakland. I hope that at some point in the future, I will get a chance to write a longer post about this, full of all sorts of links and data and such, but this will have to do for now.

So as we keep being told, the whole idea behind the industrial preservation and the new industrial zoning is to create “certainty.” I don’t have a problem with this, and, as I’ve said before, I don’t have a conceptual problem with the industrial land use policy the city recently adopted, although I think there are some specific areas where the Council made some very bad decisions. I also don’t have a general problem with the new industrial zoning code, although I again have some problems with the details.

Anyway, I want to talk about this mostly because I’m hearing Nancy Nadel say over and over again things like “We’ve just completed industrial zoning, which means we can now begin working on business attraction.”

So when I was working as a market researcher at a commercial real estate brokerage, specifically in industrial real estate, there were two very clear barriers to locating businesses in Oakland, and I can tell you for a fact that the zoning was not one of them. Certain politicians and bureaucrats have really latched onto this claim and just say it over and over and over again until my ears bleed, and nobody ever seems to question them on it. I don’t know who they’re talking to, but this was just not a concern for our clients at all.

What was worrisome to our clients? Two things. The first one is, of course, crime. Our crime problem is an issue for business attraction for two reasons – personnel and material. If people are afraid to come to work where you’re located, your business suffers from a reduced labor pool and won’t be able to attract quality staff. The much, much bigger problem though is materials. When people complain about our crime problems, they mostly talk about violent crime, which is legitimate. But we also have a serious property crime problem, and when being in Oakland means that you’re significantly more likely to get your business broken into and your materials stolen, that’s a really good reason to locate in Emeryville instead. And this is why I want to laugh when I keep hearing about attracting green technology such as solar panel manufacturing to West Oakland. Look – businesses here can’t even keep their copper wire safe – do you honestly think anyone in their right mind is going to put a factory full of silicone in West Oakland? No way. If we’re serious about business attraction, we have to deal with the crime issue, and I think we all know that we aren’t going to accomplish that with the same Council that has been letting things deteriorate for years.

Issue #2? Infrastructure. So despite what Nancy Nadel seems to think, Oakland has some of the lowest average asking rates for industrial space in the entire Bay Area. Mostly, that’s because our property is so undesirable. The crumbling warehouses that exist in much of Oakland’s industrial areas aren’t suitable for most of the type of businesses we want to attract. Nancy Nadel keeps talking about bringing biotech – biotech companies want to locate in fancy new light industrial business parks that have all the nice modern amenities. There are, of course, other kinds of businesses that have fewer needs and could use some of our old warehouses just fine, if only they weren’t falling apart. It is not unusual that the cost of bringing the ancient industrial space in West Oakland into conformity with modern safety codes is greater than building an entirely new building. So the issue isn’t that the rent is too expensive (because the property owner wants to leave their property vacant in homes it will be converted for housing, as some people claim), but that the necessary infrastructure improvements that will make the property usable are too expensive. Nancy Nadel choose to blame property owners for this, saying that they are not paying for the improvements themselves because they’re “greedy.” Any Councilmember who was serious about industrial business attraction would, of course, be looking for ways to work with property owners to deal with the problem instead of deciding that they’re the enemy.

Anyway, if we want industrial business in Oakland, we need to provide appropriate space for them to operate. Sean Sullivan has proposed emulating models of successful downtown redevelopment efforts to create appropriate space in West Oakland. That is, the redevelopment agency could do something like we did with Forest City, identifying a developer willing to build an R&D/light industrial business park and assisting with parcel consolidation and perhaps providing some sort of subsidy for any necessary environmental remediation. The West Oakland redevelopment fund isn’t exactly flush with excess cash, so there are some limits on how much financial assistance we could provide, but we can take advantage of bonding capacity if we have a real shot at getting someone to build actual desirable business space. My understanding is that this is something the Oakland Partnership is hoping to work on, and I do hope we can get something moving relatively soon.

13 thoughts on “Bringing industry back to Oakland

  1. dto510

    Nadel and Lindheim and other proponents of industrial attraction have no idea what they’re talking about? Surprise!

  2. Max Allstadt

    I have myself been wondering exactly what kind of industry is looking for warehouses with corrugated metal roofs that have rusted through. Take a drive down Wood St., Mr. Lindheim, and tell me what you’d rent.

    Also, does a chocolate factory even need to be in an industrial zone? I’d love to live next to one! I actually lived three blocks from the NECCO wafers factory in Cambridge before it shut down. Yeah there were trucks. Yeah it was huge. But the whole neighborhood smelled like chocolate mint sometimes. Awesome.

  3. Joanna/OnTheGoJo

    V, can you explain where all the redevelopment funds have gone? Or maybe I just don’t know where they come from specifically.

    When you look at all the development in the Jack London District and consider the hundreds of thousands of dollars in fees that developers have paid, where has that money gone? I thought it went into the redevelopment fund. One can’t help but wonder if that fund has been raided by the general fund… because we certainly haven’t had any improvements down here other than those made by the developers.

    Other issues for industry leaving Oakland are the fees and parking. Here in the Jack London District – which is a mixed-use district – we’ve lost a LOT of industry because of truck parking losses and the inability for workers to have a place to park. With the increase in residential to the mix, and not enough parking required in the buildings being built, more and more cars are on the street. There are also complaints by the newbies that they’ve paid $500K (okay, probably more like $450K these days) for their loftesque condo and now they don’t want to smell smoking meat, or hear the trucks that follow. I have never understood that. I moved to this area because there weren’t so many kids and because it did offer something different than a traditional neighborhood…

  4. Another Westoaklander

    Joanna, regarding your question about where redevelopment funds have gone – they have not gone anywhere. The West Oakland Redevelopment area was just established 5 years ago, and because Redevelopment funds come in through tax increment money (i.e. property tax differences) it takes a while to get going. The W.O. Redevelopment area is just starting to have a little dough. Money in the past was spent on projects like environmental rehab of Willow Park, some business retention money to keep an Oakland employer in Oakland and moving them into West Oakland, stuff like that. But there has not been the kind of money you’d think you’d see so far… as I understand it at least!

  5. dto510

    To add to what Another Westoaklander said, the Jack London Square area is part of the Central District Redevelopment Area. Recent projects funded by it include Uptown Apartments, the Fox Theater, and a new sewer line in Old Oakland. Redevelopment has been a success downtown (except the 25% set-aside to the sorely neglected First-Time Homebuyers program) and holds promise for West Oakland, it’s one of the few things Ms. Nadel can point to. I don’t know why she’s not doing it more. But based on her campaign’s record of copying their platform from blogs and websites, maybe it will show up soon.

  6. Josh Abrams

    totally off topic – but did anyone see that Clinton Killian mailer this wekend? Was I the only one scratching my head after that one?

  7. V Smoothe Post author

    Why does everybody but me get mailers!!? I always vote! Yet I have received exactly one mailer for anything in the June primary, and it was for Wilma Chan. What gives?

    Tell us more about this puzzling mailer.

  8. V Smoothe Post author

    Oh, and Joanna, I promise to write something about where redevelopment funds go at some point in the near future, but Another Westoaklander and dto510′s answers provide a good summary.

  9. josh abrams

    The mailer — its a biographical piece full of pictures of Clinton Killian through the years and says he was “born in Hickory, made of Hickory” as he was born in Hickory, NC(?) and is strong like the wood (or so the mailer claims). Its interesting because it was paid for & mailed by OAKPAC but doesn’t contain the required disclosure “this was paid for by xxxx and the total cost was xxxx” or whatever it is – and it seems like a hard piece to claim no coordination on with the campaign as it is unlikley the pictures came from someone other than the candidate, and Killian didn’t mail his own piece this past week when absentee ballots were going out, pointing to a logical conclusion that he knew the piece was going to drop. Either way someone is probably guilty of a Ethics violation, but of course a complaint has to be lodged in order for that to go forward.

    As to why you don’t get mail – it could be for a number of reasons – the latest wave of mailers went mostly to perm. abs. voters in high voter turnout districts, also if you’re not a registered dem you don’t get much mail (I personally got none, my family member who is a perfect voter and a perm. abs. voter got mailers from everyone and their moms). Even DTS voters don’t get a lot of mail (as I understand) as most of the elections coming up are party primaries and the folks are trying to target their dollars as well as they can. Now it will be interesting to see who gets the NRA mailers I hear are coming out on behalf of some candidates…. why anybody thinks thats a good idea in Oakland is beyond me.

  10. dto510

    josh – The pro-Clinton Killian narrow 8-page mailer was from OakPAC and contained the disclosure statement that I’ve seen before (and the “union made” stamp). The city’s jurisdiction over independent mailers is limited thanks to a court decision from the Pat Kernighan – Aimee Allison race two years ago, and I doubt requesting photos from a candidate is enough to make it “coordinated” anyway. I thought the mailer was pretty persuasive but you have to remember that mailers are not aimed at the active and attentive voter so they always seem somewhat inane to well-informed types like us.

    I’m a lifelong Alameda County absentee voter, and I think I just now met the threshold to get tons of mail. Here’s my count: Wilma Chan – 1 (good, made her message very clear), Loni Hanock – 2 (her mailers stunk though, totally vapid); Sean Sullivan – 1 excellent four-page mailer, Nancy Nadel – 1 almost postcard-sized mailer inviting me “to a coffee in (my) neighborhood” that was in a decidedly different neighborhood, Anti-Nancy Nadel – 1 devastating four-page mailer from OakPAC assailing her leadership on the public works committee with lots of pictures of trash in her own neighborhood; and one one-page mailer each from Phil Daly and Victoria Kokasalaki who are running for judge. His was bigger, but hers was meatier.

  11. Max Allstadt

    The OakPAC anti-Nadel mailer: People I know who got that mailer keep asking me about it because they know of my involvement with this race. But I have never seen the mailer. Where can I get one?

  12. V Smoothe Post author

    I’ve seen the anti-Nadel mailer – dto510 showed his to me. The front page is a large picture of a mountain of trash on a street with a shopping cart in front (a scene West Oakland residents are well acquainted with). It reads “Time to go shopping?” Then when you open it up, it has on one page another big picture of trash and says something like “after twelve years, shouldn’t we be shopping for a new Councilmember?” Then the facing page has a couple pictures of trash piles and blight, plus a bunch of text. It talks about her being chair of the Public Works Committee and inaction on blight and beautification, and quoted her now-infamous response to a question about how to deal with homeless encampments at the Peralta St. and Hollis St. underpasses, documented previously on Beautiful West Oakland, “You can grow a money tree.”

    The back page shows another enormous pile of trash with a caption saying the picture is of Nadel’s own street.

    I don’t know if non-absentee voters will be getting the same mailers later on, but dto510 probably still has his and I’m sure would be willing bring it next to you see him.

  13. Joanna/OnTheGoJo

    V – this week’s SF Business Times has an article on LoopNet – “LoopNet thrives in down market”. I looked at what’s listed in my area and it seemed pretty acurate. If listings are not there, it’s probably because someone doesn’t want to pay for it.