Reinventing the wheel. Slowly.

I write today for Novometro about the Oakland Partnership.

I hope to find the time to write more about last Friday’s Economic Summit soon, although I am, as usual, behind on my blogging schedule. Anyway, I wanted to comment on something Dan Lindheim talked about in one of the panels, and was also quoted in the newspaper about:

Dan Lindheim, the director of the Community and Economic Development Agency, said finding spots for business to locate is not as easy as finding spots for housing opportunities, in part because many businesses are content to stay where they are even if they are only making a low-level profit.

He did say the city continued its work on a data base on what parcels are available for different types of commercial opportunities.

“We’ll certainly be able to (operate the data base) with staff,” he said. “What we want to ultimately be able to do is to get it so that it’s available online so people can really have individual access. We’re not quite there yet.”

I just don’t understand why Oakland’s city government feels the need to constantly reinvent the wheel. In case you don’t know much about commercial real estate, let me give you the rundown. There are these things called commercial real estate brokerages. When you see those big signs on the buildings or vacant lots saying things like “For lease. Call so and so,” that’s the number for the broker representing that property. Of course, most properties don’t get leased simply by having someone drive by and seeing a sign and thinking a building looks pretty. Most properties get leased when someone calls up a broker and says something like “Hi Jake, I want to move my business to Oakland and I need at least 10,000 square feet near a freeway with at least 2 grade level loading doors.” Then the broker sends an e-mail to one of their market researchers and says “all the spaces in Oakland, Emeryville, Alameda, and Berkeley half mile from freeway, 10k-12k sf 2 grade doors, asap.” It’s the same with office space, although needs there tends to be more generic.

Then the researcher will look that up in their database of available properties. Large brokerage houses usually maintain their own databases, based on the monthly listings released by all the other brokerages and marketing flyers sent out and a variety of other sources. Smaller companies usually can’t afford their own researcher on staff, so they just buy a subscription to two existing databases, CoStar and LoopNet. Both are up to date and comprehensive. A LoopNet searching subscription costs less than $40/month if you pay for a year upfront.

Anyway, I realize that what Lindheim is describing isn’t the exact same thing, but it’s close enough to be totally pointless and wasteful. I mean, do the taxpayers of Oakland really need to be paying someone to make and maintain a list of available properties when we could instead just be like “You want to space for your biotech company, here’s a broker’s number?” (Although in that case, the answer would be more like “We don’t have any. Go to Emeryville.”) Opportunity maps made sense for housing development, but with business attraction, especially industrial business attraction where the needs are complicated and unique to each company, there’s just no point in replicating work that other people are already doing, and are doing a better job of it that the government ever will.

6 thoughts on “Reinventing the wheel. Slowly.

  1. V Smoothe Post author

    A couple of quick searches on SF’s tool, CoStar, and LoopNet indicate that theirs is almost as hopelessly out of date and inaccurate as Oakland’s. I just don’t see the point in paying people to compile and maintain this information when we can get it cheaply elsewhere. And isn’t it better to not provide a real estate search site at all than provide one that doesn’t have accurate information? I just don’t get it.

  2. Deckin

    You’re right that this is seriously a waste of time and money. The ridiculous thing is that no business owner (count me) is sitting around thinking, ‘gee, I really want to move into Oakland, but I just can’t figure out where to find leasable space.’ No. Here’s the thought: ‘If I take a massive risk and possibly lose everything I’ve worked for, what chances are that I can move into Oakland, make some money, and be assured that the city itself will not be an impediment to my efforts?’ Of course, answering that question doesn’t appear to be high on the Dellums team’s priority list. Maybe if someone high up in the administration had ever actually run a business (being hired as a consultant doesn’t count) from start to finish–had ever put their own life savings on the line, maybe we’d get better results. Maybe once Nadel opens her chocolate factory she’ll change her perspective. I can tell you that my family has decided against opening anything in Oakland because we just can’t bear the uncertainty and risk–crime, excessive bureacracy, you name it.

  3. friendly bureaucrat

    I work at CEDA and the thinking on producing and maintaining the opportunity sites database is to list sites that aren’t (yet) on brokers’/CoStar’s/Loopnet’s radar screen…in other words the sites are potentially undervalued or underutilized–perhaps they have a property owner not inclined to market it.

  4. V Smoothe Post author

    friendly bureaucrat –

    As a former market researcher, I can tell you that you’re not going to find any properties like that – not ones that are actually viable for use or development right now, that is. Property owners don’t sit on space for the fun of it, and brokerages pay multiple people to work full-time maintaining these up to date inventories. I just don’t see the point in paying city staff to assemble information that is already available at a very low cost.

  5. avis

    V Smoothe is right, having owned a business in SF for many years I must say this does seem to be a huge waste of time and money, but then Oakland seems to be very good at wasting money and resources. Over the years I have rented several commercial office spaces through my broker and never once considered Oakland for the obvious reasons. If Oakland is serious about getting more business to locate here they need to address the crime and grime issues that plague us first.

    Is this program one of the “make work for paroled felons” that Dellums is pushing for?