Developing a More Resilient Economy in Southern Alameda County
Given the difficult economic times, our City’s activities should be focused on improving our economy by creating jobs and helping local businesses get established here if Fremont.
What influence does the City of Fremont really have to develop our local economy in the face of significant recent job losses, plummeting housing values and the loss of tax income that pays for the fire department, police, road maintenance and schools? Even though cities like Fremont exist within a larger national and international context over which they have little control, there are many ways that new local government policies and efforts can help grow the local economy.
First we need to be clear on the goals of economic development. I believe that economic development should:
- Provide Southern Alameda County residents access to satisfying work that pays sufficiently well to ensure a good quality of life (“Work” can include employment or business ownership.)
- Grow a diverse and thriving local economy, providing a broad array of goods and services for residents and organizations
- Help raise property values
- Fill empty commercial spaces to create thriving historic town centers
- Generate more tax revenue so the City can offer more services and amenities to residents and organizations
- Build a resilient economy that can withstand bursting bubbles on the downside of future business cycles
Fremont is reeling from recent job losses at NUMMI. Our local economy just lost 4,700 jobs at one company where the average production worker made $65,000/year. The NUMMI closure did not just hurt those 4,700 people and their families, it also affected 20,000 workers at 300 other Bay Area companies that supplied goods and services to NUMMI. Just as Detroit is struggling with what to do with empty car factories – museums, train car factories, housing developments? – the City of Fremont seems resigned to an empty factory that will remain vacant for 15-20 years.
To pull ourselves out of this malaise, we need new economic development policies that will build our existing strengths. What are these strengths? I believe we have much to offer.
- Highly educated and skilled workers
- A diverse population from many different cultures – Restaurants, festivals and various community events celebrate rich culinary and cultural traditions from countries such as India, China and Afghanistan.
- Family-oriented communities – Dublin, Fremont and Livermore are viewed as safe communities that are family friendly.
- We still have a few local farms that sell their organic produce at neighborhood farm stands.
- Access to natural resources – Many citizens take advantage of biking trails along Alameda Creek, hiking trails through undeveloped areas, and many different areas to see wildlife.
- Rich agricultural tradition – In the early 20th century, the California Nursery Company grew plants to sell to estates throughout California on a 500-acre spread centered in Niles. Livermore is well known for its wineries.
Incubate more locally-owned small businesses
Based on these strengths, I believe that part of our area’s economic development strategy should include incubating more small businesses that reflect our local flavor.
Small businesses create most of the jobs in the U.S. and have been the first ones to pull our country out of recessions in the past. Locally-owned small businesses are also the first ones to bounce back after natural disasters. After Hurricane Katrina destroyed parts of New Orleans, locally-owned businesses reopened within weeks and even days of the floodwaters subsiding. Local cafes, bookstores and hardware stores provided needed goods and services, and helped draw people back to the neighborhoods. Meanwhile, WalMart and HomeDepot were shuttered after the hurricane. The City of New Orleans doled out multi-million dollar subsidies and tax breaks to induce them to open again.
Encouraging development of more small, locally-owned businesses will keep more money in our local economies and boost tax revenues for schools, police and firefighting. In a study entitled Thinking Outside the Box: A Report on Independent Merchants and the Local Economy, researchers found that 16% of money spent at a SuperTarget stays in the local economy, mostly in the form of wages for hourly staff. By contrast, 32% of money spent at locally-owned retailers stays in the economy because staff spend money locally on supplies, accounting services, legal services, graphics and printing, and they donate more to local charities.
Streamline permitting process
To encourage the development of more locally-owned small businesses, there is more that cities could do to help entrepreneurs through the business permitting and approval process. I have talked to several entrepreneurs who have been frustrated by the cost and lack of transparency at the processes of establishing a business or making significant property changes. Throughout the business permitting process, it has been unclear to them how many approval process steps there were and when they could expect approval for each step. The City of Fremont should help entrepreneurs by:
- Making sure that the websites for Alameda County and local municipalities clearly explain the permitting process and provide information for people who can help with each stage of the process.
- The upside of an economic downturn is that people who are between jobs are thinking about starting small businesses. Let’s give them the support they need to make this happen.
Create more local flavor
Wouldn’t it be nice if the new businesses that come out of this Great Recession had some local flavor? Many of the stores and restaurants in Dublin, Fremont and Livermore are national chain stores. Whether you visit an Olive Garden, Denny’s or Home Depot in Orlando, Denver or Houston, you will see the same design elements and offerings. By contrast, local businesses often select products based on local needs and preferences, not on a template developed in a headquarters thousands of miles away.
This reminds me of a story I heard from a friend that went to Kmart to buy some garden supplies. It was early fall in the Bay Area, a time when people plant so the winter rains can help new plants take root. The garden department in Kmart was bare. They asked a salesperson why and he said “because no one gardens in the fall in Michigan [the location of Kmart headquarters at the time].”
Locally-owned businesses will develop offerings that meet local needs and, if done artfully, reflect elements of the local Fremont culture – our agricultural history, natural beauty and high-tech focus. Think about store fronts in tourist destinations like Lake Tahoe, Santa Cruz and San Francisco. The names of the businesses, décor and offerings of these places reflect the rich traditions of the area. I believe we would be enhanced by more local flavor as well.
Network more in Silicon Valley
Our local economies would also benefit from more high-tech businesses. I know all of our cities want to attract clusters of clean tech and green manufacturing industries, the latest growth industries, but, according to a business owner I know who lives in Fremont and started his clean tech business in the city of Santa Clara, Alameda is notably absent from Silicon Valley networking events. He encourages the County to join the Silicon Valley Leadership Group (SVLG) to be a part of the conversation on clean tech and green manufacturing, and to network with entrepreneurs who are looking to start businesses in Silicon Valley.
Leverage the California Labor Federation’s 2010 Legislative Agenda
While the County should reach out to entrepreneurs and encourage them to start local businesses, the County should be transparent and accountable for the incentives they use to attract economic development. There are a few points in the California Labor Federation’s 2010 Legislative Agenda that the County should adopt so we can determine if incentives the City uses are effective.
- Database of all County funds spent on economic development – Every economic development budget dollar (business tax breaks, land given to developers, infrastructure improvements made on behalf of businesses) should be publicized for the public to see. Sunshine is, after all, the best disinfectant.
- All tax breaks should be eliminated at some point – Sunsetting tax breaks will allow us to determine if they were effective.
- After studying incentive effectiveness, create “clawbacks” if necessary – A bill was introduced in the state legislature recently by Yee stating that companies that receive tax subsidies and fail to meet the intended purpose and goals required should pay the state back the tax subsidies received, plus a penalty. This is something we should do at the local level too.
Economic incentives are fine to use but we need to know if they are resulting in the economic activity we hoped they would.
I would like the County to do more to encourage entrepreneurs, and create a more diverse and resilient economy. When elected to the Alameda County Board of Supervisors I will implement policies that will grow our tax base; keep more money in the local economy; and ensure transparency so City government works for its citizens.