Tom Butt and Josh Genser are longtime chums, adversaries and business partners. But the two Richmond business titans have a difference of opinion about who or what is “pro business,” and in the basic definition of the phrase itself.
The two men have had a recent rhetorical spar, kind of like Richmond’s own version of the Jefferson/Hamilton written duels of the late 18th century.
Genser’s piece appeared first in the Richmond Chamber of Commerce’s website.
What Is Business Friendly?
Article written by Joshua Genser, Attorney-at-Law (Genser & Watkins), in response to a posting titled “SF Chronicle – Richmond Councilman Ill, Won’t Take Office” on Tom Butt’s E-Forum, posted on January 8, 2013.
Tom Butt claims that the business community equate “green” with anti-business. Tom is wrong. The Chamber of Commerce, local businesses and even Chevron recognize that protecting the environment is as vital to business as to any other sector of our community. We also all recognize that businesses that provide goods and services for the purpose of meeting “green” governmental mandates are a growing portion of our economy, and that several such “green” businesses have opened in Richmond.
Why, then does the business community consider the Richmond Progressive Alliance anti-business? It’s because they put their agendas, including “green” issues and foreign policy, ahead of the ordinary, day-to-day business of running our City:
What business-friendly city, after all, tries to take developable land zoned for industrial development and locally owned away from its owners without compensation?
What business-friendly city tries to tax its local businesses and put them at a competitive disadvantage in comparison with adjacent cities in order to make a symbolic point about excess consumption of sugar nationwide?
What business-friendly city that wants to entice more businesses to move here tries to impose a tax on manufacturing?
What business-friendly city, with the lowest rents in the entire region, tries to impose rent control?
What business-friendly city populates its planning commission with people who have no experience nor expertise in planning, construction, property development or, even property ownership, but who do have an avowed desire to stop development?
What business-friendly city blocks truck access to local industrial businesses with a bicycle lane?
Tom also insists that the new General Plan is business-friendly, noting that it calls for huge increases in local jobs. What Tom fails to mention, however, is that in the massive document is ammunition for anyone who wants to stop development, and precious few strategies for encouraging it.
Jeff Ritterman is the only Richmond Progressive Alliance member who ever made any attempt to understand the perspective of business, and he was excoriated for it by the RPA. Perhaps if anyone else from the RPA ever asked business organizations what they thought of legislative proposals before they were agendized and made some effort to understand that being in business is hugely risky and difficult, the perception of the RPA might change.
Butt responded with overwhelming force, a lengthy dissection of Genser’s points and a further exploration of what, exactly, constitutes “pro-business.”
From Butt: Because Genser’s editorial is so full of errors and misinformation, it deserves a detailed and unfortunately lengthy response. The underlying flaw in Genser’s piece is that no one has ever provided evidence to support his contention that certain council members, including me, have actually deterred a business from staying in or relocating to Richmond. Nor has he ever provided evidence that a council controlled by so called “pro-business” or “business-friendly” individuals, as defined by him and other Chamber of Commerce leaders, would actually make a difference in a business relocation or retention decision.
First of all, I have never said, “business community equate [sic] “green” with anti-business.” What I have said and written more than once is that certain people who claim to speak for the business community and certain City Council members and candidates have criticized the City Council majority for trying to make green businesses welcome in Richmond. It’s the opposite of what Genser describes. The Chamber and its spokespersons have criticized the Council majority for courting green businesses rather than pointedly ignoring them, despite the fact that green businesses continues to be the fastest growing job producers in California. To paraphrase Willie Sutton, “…that’s where the money is.”
Another frequent Chamber spokesman, Tom Waller similarly wrote:
I assure you there are many of us who believe that any success in attracting and retaining businesses across many sectors in Richmond comes about mostly in spite of, not because of, policies and policy makers in Richmond. I have no doubt that anti-Chevron attitudes and actions which emanate from the City Council majority are not lost on other legacy businesses in Richmond or many non-local businesses in many sectors that might otherwise consider setting up shop in the City, bringing needed investment and hiring people. As for the “green” phenomenon locally, the worthy mantra of “green business is good” long ago morphed into “pure-play green business is best” or even “only pure-play green business is good” so that others can easily feel second-class or worse.
Waller buys into the popular Chevron-controlled Chamber of Commerce myth that the only way to attract business to Richmond is to revert to the days when Chevron controlled not just the Chamber of Commerce but the City Council as well. There is simply no evidence that any existing or prospective businesses cares what the City’s relationship is with Chevron as a litmus test in making locational decisions.
Contrary to Waller’s lamentations, Richmond’s relationship with Chevron is actually remarkably good, considering that the corporation spent $1.2 million trying to buy the last election and unseat the City Council and it has a bevy of property tax appeals and lawsuits on file that would bankrupt the city if they succeed. Genser and Waller apparently believe whatever Chevron does to provoke Richmond is okay. Turn the other cheek. The truth is that you don’t have to love Chevron to treat them fairly and do business with them, and that’s what the City Council has done. Unlike Shakespeare’s Marc Antony and Caesar, the City Council has come to neither bury Chevron nor to praise it. We just want to do business with each party treated fairly.
Despite Chevron’s threats and efforts at unfriendly takeovers, the City Council has repeatedly and unanimously adopted resolutions directing staff to prioritize Chevron permit applications and process them promptly:
BE IT FURTHER RESOLVED that the City Council directs the city manager to make processing a new or amended permit a high priority, to assign necessary staff, engage required consultants and take other appropriate measures as required to process a permit application as promptly as possible consistent with governing laws and regulations … (City Council Resolution 15-11)
Just recently, City staff pulled out every stop to issue final permits for the controversial fire damaged pipe replacement just before Christmas in order to avoid stopping the repair project. This was pursuant to another Resolution 113-12:
BE IT THEREFORE RESOLVED, that the City of Richmond is also committed to expeditiously process permits to repair damage from the August 6, 2012, fire…(Resolution 113-12)
If you talk to businesses instead of simply inventing assertions to fit a thesis, you will find that the biggest concern of existing and prospective businesses is crime in Richmond. They want their property and their employees to be safe. Well, Richmond is getting safer every year, at least statistically. But this is not cheap. It requires substantial investment in a police department, both personnel and technology, as well as other services such as the Office of Neighborhood Safety, Code Enforcement and Public Works. This costs a lot of money, and we appreciate the tax revenue that comes from businesses, such as Chevron, to support it. But if Genser and the Chamber had their way, we would dismantle our tax structure, particularly that which affects Chevron. The result would be fewer police offers and less crime prevention, not to mention worse streets, more graffiti and slower processing of permits. That would deter business, not attract it.
Frankly, most businesses and prospective businesses could care less about the relationship between the City of Richmond and Chevron. They have their own priorities, and those generally revolve around location and the cost of buying or renting space. The central location of Richmond in the Bay Area is a big plus, and the relatively low cost of land and built space makes Richmond very attractive.
Unlike City Council critics that simply conjure up reasons that Richmond is unfriendly to business, I have spent a good deal of time actually researching Richmond’s business climate and randomly surveying businesses about their locational decisions. The recurring themes are affordable and available space and location:
· “We needed bigger space and our lease was up in Emeryville.”
· “The mall was a good opportunity, dollars per square foot that they are producing, target consumers that populate the area.”
· ““Location and business cooperation, light to heavy industrial work, old area had issues with neighbors and issues with local agencies like fire departments that made it difficult.”
· The business was already in operation with a small business in Richmond and then we bought a big one…It’s cheaper.”
· “We are doing quite a lot of work here, construction management within the city.”
· “… attractively priced with high quality real estate, other green tech businesses are in the area, the overall physical environment close to the water and out the fog.”
· “Rent is cheaper, business opportunities.”
· “…grew up in Richmond, close to all bridges, Martinez, San Raphael, close to the highway.”
· “We are on the border of Richmond and El Cerrito it’s a great opportunity to sell the area of all the East Bay and also Richmond, our jobs are all over Oakland, Berkeley, and Richmond.”
· “…lived in richmond for a long time, worked in richmond for a long time, served as a city commissioner for the city, passionate about focusing things I do in the city to help develop and provide jobs to the community.”
· “I live close by, it’s a good place to do business.”
· “Richmond is closer to Napa since we do business with wineries, we can have enough space and no problems and we want.”
Only one business surveyed even mentioned Chevron, and that was a Chevron contractor.
I also asked them what were the challenges of doing business in Richmond. Safety, infrastructure and amenities were recurring themes. Even trains were mentioned, but the City’s business-related policies came up only twice, once from a Chevron contractor and once from a taxi company who complained that the business license fees were too high. No one mentioned any of the issues cited by Genser in his editorial as examples of unfriendly business practices or policies of the City Council.
· “Safety is the biggest issue-but says area is pretty good. Economy, Richmond people need enough money to be a consumer to shop and eat.”
· “I think security is the most important one, making sure we can survive. We need to make sure that we are taken care of, that it is safe. We have drivers held up. It happens more than you would think. We get a robbery 2-4 times a month. People are really nice, the city is great to work with when.”
· “Road Repairs- on side streets and corners, ditches and cracks in the street and it is difficult for customers to find parking, when it rains it floods. This is the main priorities.”
· “Where we are located is very nice but the security of my people through the Iron Triangle and going to Chevron is bad. Some of them don’t like to go home and take a long route to go to Vallejo and go around the bad areas. Obvious Safety problems. Personally not that afraid, most locals think I am a cop, I am pissed at the train schedule, they take forever to cross. The cargo trains more than the Amtrak. 15-20 minutes when coming home from the office, it happened twice last week, on Thanksgiving!”
· “Safety and location of the office. Visible and secure area staffed by three ladies. There is a police substation across the street. We have valuable trucks and they are parked on the premises. Breakage prevention and safety is prime concern. Accessibility for the public, we want to be visible to the public that donate to us, in this location it is helpful. It is close to the individuals we service.”
· “They need to clean up the streets, it’s terrible, not just the trash and stuff. There are so many beggars and drug addicts! Robbed twice, stolen goods, break into the toy machines. Supplies have been stolen from the back of the store.”
· “We need affordable space, other businesses around the location to take care of errands, McDonald area does not have a lot around there that you can go to or eat unless you go to Point Richmond or Hilltop, not much in the middle. Develop the mains street or downtown.”
· “Better internet connectivity and bandwidth, improvements to the information infrastructure, improved options for transportation from Richmond BART to our location, more economic vitality-restaurant options.”
· “The ability to attract employees, there needs to be safe reasonable cost neighborhoods in which employees can live, homes need to be reasonable to rent or to buy, in many cases we will not find the employees we need locally and they will need to relocate here and need to be able to find accommodations. Being able to attract employees to the area.”
· “Local support from residents, businesses, government things like that, development, giving us business, recognizing us as a local business. We came back to give back to the community, that’s important to us and our business philosophy. To give as well as receive.”
· “Safety, location easy, our trucks and cars have been broken into many, many, times and we are considering moving, every two months one of our cars were broken, there wasn’t any good response. Get some kind of type of security, police patrol every once in a while to protect our interest to stay in Richmond, to help us build a gated area that we can store our vehicles since we have over 15 vehicles that we use, let’s assume that 8 are outside of the facility so we need some kind of solution.”
· “Safety is the biggest issue, to attract business, have more people move into richmond and business will automatically. I am going to buy a house in the Richmond District on 50 something street.”
· “ Lot of grafitti, broken windows.”
Finally, I asked what the City Council could do to make Richmond more attractive to business. Some respondents were completely satisfied, but safety and quality of life issues continued to dominate. No one mentioned any of the issues Genser wrote about. Only the Chevron contractor mentioned Chevron, saying, “Chevron and oil companies have been trying to be politically correct, but not being recognized. Should work on PR with the businesses. Richmond is seen as the business enemy.”
· “We have only been here a month or two and everything has worked well with the licensing and inspection everything worked fast good.”
· “I think things are going good right now. Road repairs on Cutting Boulevard. but not the inter-streets and the Iron Triangle area.”
· “We have only been here six months, not a lot of issues that we have come across, so far things are going fine.”
· “Keep it clean and safe.”
· “Safety is a big problem and businesses don’t feel secure in the Marina and McDonald area. When we are working there and on the construction site we get all sorts of characters walking through the sites. The local business ordinance does help and that’s good and helps the businesses in the city and helps the city compete with out of towners and gives an edge to local businesses with the 5% advantage.”
· “Challenges and misperceptions about safety, we have felt very loved when we first arrived and trying to connect to clean tech and green tech businesses. AT&T and lack of access is principal. What is frequently valuable is to be located in areas where there are complementary companies and services. Let Richmond and surrounding communities try to encourage clusters to develop doing similar or complementary things, a critical mass of employees. You might find people are becoming available. Make coming here lower cost and doing what they can on taxes. Build the communities that are pleasant to live in, good schools, restaurants, entertainment, neighborhoods — all problems.”
· “More patrolling of police in the evenings and whatever we can do to make it more secure. Lots of guys wandering around with carts and stealing stuff.”
· “It’s basically the same answer, be supportive of businesses, not to go outside of the city to find services that we can otherwise provide, treat all the businesses equally and giving as well as receiving, not be competitive but how we survive as a family owned business, competing with franchises. The city council has recognized and supported family owned businesses first. I think that they have done right as far as I’ve seen.”
· “…safety above all, that is what will attract businesses to come and open or relocate to Richmond, It has a stigma of a bad area that it is not that safe and it is pretty true. If you can do something about that, that will get more business to the area. I can tell you on a personal level that have friends who own businesses that would love to have a better rate for facilities but that will happen only after safety is addressed.”
· “…bring traffic to the city of richmond, lower the costs the more attractive that place will be.”
· “Pay more attention with police to drive around businesses to keep bad guys away.”
Only one business surveyed complained about permits, “They can help more with getting the permits, it took forever to open almost four months.”
Many of Richmond’s highest profile businesses have also gone on record characterizing Richmond as business-friendly. The following examples are from http://www.richmondca4business.com/:
· Galaxy Desserts: As a relatively new business, in operation slightly over seven years, we began in an 18,200 square foot facility in San Rafael, California. Now we have twice that much space in Richmond, with ample parking for our employees. As demand for our award-winning desserts and pastries increased—partly due to publicity from Oprah and O, The Oprah Magazine, and several appearances on the Food Network cable television show—our sales have risen substantially. As a result, we outgrew our space and decided to expand into Richmond because of its prime, affordable commercial property, completely outfitted for food manufacturing. We’ve enjoyed continued success at our new Richmond location and are confident of even sweeter days ahead!
· Sunpower: SunPower relocated its East Bay operations from Berkeley to Richmond’s historic Ford Point Building, the former Ford Motor Assembly Plant, in December 2007. We had grown to more than 350 employees at our Berkeley facilities, and needed space that would accommodate further growth and support our corporate culture. SunPower designs, manufactures, and delivers high-performance solar electric systems worldwide for residential, commercial, and utility-scale power plant customers. Our solar cells and solar panels generate up to 50 percent more power than conventional solar technologies and have an attractive, signature black appearance. On the roof of the Ford Building, we have installed a 1-megawatt SunPower solar power system. We are delighted that this icon of 20th-century industrial production has become a beacon for 21st-century clean, green technology. SunPower is proud to be an integral part of Richmond’s business community!
· Bob’s Cleaners—located along Richmond’s rejuvenated 23rd Street—is a Contra Costa County certified “green” clothes cleaner. Unlike traditional dry cleaners, Bob’s uses an environmentally friendly process called professional wet cleaning, which eliminates the use of solvents. To reduce waste, we also return cleaned garments in reusable garment bags. Bob’s Cleaners received Greenopia’s 2008–09 Distinguished Business Award. On Earth Day 2007, Richmond Mayor Gayle McLaughlin recognized Bob’s Cleaners as a green business. We plan to continue providing high-quality, affordable and environmentally responsible services for years to come!
· Scientific Arts: From the giant baseball mitt at the San Francisco Giants’ AT&T Park (a replica of a vintage 1927 glove), to museum dioramas with real water and live primitive fish, to murals displayed in venues all over the world, to special effects for award-winning commercials and films, Scientific Art Studio brings the worlds of reality and fantasy to life. Our team of artists and craftsmen has been together for many years, putting a combination of cutting-edge fabrication techniques and old-world skills to work on a variety of projects. After more than a decade in Berkeley, we needed better facilities. Richmond has a solid inventory of buildings, affordable for sale or lease. There are plenty of local suppliers, fabricators, artists, and workers. We can count on companies like C&R Loo for glass materials, California Casting for sand casting, Douglas & Sturgess for sculpting tools and modeling compounds, and ClayPeople for ceramic supplies. Richmond also has great access in every direction, so it was a perfect match.
Recently, the The East Bay Economic Development Alliance (East Bay EDA), a business dominated organization, nominated 85 businesses the most significant contributors to the East Bay’s unique culture and legacy of innovation. Three Richmond-based companies, Ekso Bionics, Nutiva, and the West Contra Costa Business Development Center made the initial list, and Ekso Bionics emerged as one of the 16 finalists.
As for Nutiva, a self-described green business that recently hired dozens of Richmond residents, it’s CEO John Roulac stated that he liked the emphasis the Richmond political leadership has placed on healthy and organic food production, felt Richmond is “up and coming,” and was complimentary of Richmond City staff, particularly Richard Mitchell, in helping to facilitate the move.
Ekso Bionics relocated to Richmond from Berkeley in April 2012 after outgrowing its apace. Since 2005, Ekso Bionics has been pioneering the field of bionic exoskeletons to augment human mobility. Ekso is a wearable robot or exoskeleton that powers people with lower extremity paralysis or weakness to get them standing up and walking.
So it’s fitting that the company is preparing to move into the former Ford Motor Co. Assembly Plant in Richmond, California, which has been turned into a trophy office building. On a sunny late-December morning, Bender shows off the company’s new location, an undivided expanse with lofty ceilings and twice the floor space of the current facility. An area along the windowed outer wall may become a test and demonstration space, which he calls “our Apple Store.”
The 16 companies and organizations, selected by independent industry professionals after a public nomination, are being recognized not only for being instrumental in advancing the region’s culture of innovation, but also for contributing to regional prosperity. The selected finalists will be recognized at a gala event on January 31, 2013, at the Fox Theater in Oakland. At the event, East Bay EDA will also announce their first-ever Innovation Award winners. To register for the event go to www.eastbayeda.org/iawards.
Jeffrey A. Leenhouts of the commercial brokerage Cassidy Turley in his most recent newsletter echoes the attraction of low commercial rents and property values in attracting business:
Richmond is still the low price leader when it comes to commercial real estate in the Bay Area. It is a great market for companies looking to save on their occupancy costs, as well as for investors searching for opportunities.
Leenhouts is optimistic about the commercial real estate market in Richmond:
Richmond had its first year of positive net absorption in its warehouse market in 5 years (+100,000 sf). Increasing demand for quality warehouse distribution product and lack of supply of it in the more traditional warehouse markets, namely Oakland and Hayward, is driving tenants to consider the warehouse opportunities in Richmond. Soon, land may play a part.
And although the numbers don’t really reflect it, the market is much healthier. Tenant demand has picked up. Well priced, functionally acceptable, decently located properties have sold or leased and what is still out there will have activity now and will sell or lease much quicker than in the last 5 years. Distressed properties dragging down the market have been absorbed. Overall pricing has adjusted to the present.
You can see from the chart below that cities clearly perceived as less pro-business than Richmond, such as Berkeley, have lower commercial vacancy rates, and cities known as being aggressively pro-business, such as Newark and Fremont have higher vacancy rates. This underscores my contention that most of the things that chambers of commerce obsess about regarding the business climate are not in the decision tree of businesses considering locations. Location, cost of land and space and quality of life issues are important to business, not whether the city council delves into foreign policy occasionally or supports bike lanes.
In his Chamber of Commerce editorial, Genser listed a litany of non-business friendly actions by the City Council, or some of its more progressive members, including:
1. Putting “green” issues and foreign policy, ahead of the ordinary, day-to-day business of running our City
2. Taking “developable land zoned for industrial development and locally owned away from its owners without compensation.”
3. Trying “to tax its local businesses and put them at a competitive disadvantage in comparison with adjacent cities in order to make a symbolic point about excess consumption of sugar nationwide.”
4. Trying to “impose a tax on manufacturing.”
5. Trying “to impose rent control.”
6. Populating “its planning commission with people who have no experience nor expertise in planning, construction, property development or, even property ownership, but who do have an avowed desire to stop development”
7. Blocking “ truck access to local industrial businesses with a bicycle lane.”
8. Adopting a General Plan that is a “ massive document … ammunition for anyone who wants to stop development, and precious few strategies for encouraging it”
Although these are clearly unpopular with Genser, there is no evidence (and he provides none) to support his contention that any of them have dissuaded any business from locating in Richmond or have driven any business out of Richmond.
Let’s look at them one by one.
1. I can understand his frustration with occasional but infrequent foreign policy initiatives, and in fact, I share some of them, but they are few and far between, and there is no evidence that they have had any effect on Richmond’s business climate.
2. This one involves land owned by Genser. Although his characterization of seizing land without compensation is substantially embellished, it eventually was resolved in his favor, thanks to a member of the dreaded RPA, and soda tax author Jeff Ritterman who thought the property might actually produce jobs. If the land at issue is so valuable and has such great business potential, how come it is just sitting there doing nothing but providing pasture for horses? Where are the jobs?
3. We understand that Genser and the Chamber of Commerce believe that no tax is a good tax. They have to admit, however, that the soda tax campaign was the best short-term job creation program in Richmond history, and it primarily targeted young people who needed the work the most.
4. The “manufacturing tax” referred to by Genser affected no one but Chevron, and it was passed by a majority of Richmond voters, not a runaway City Council. Is Genser saying the majority of the people of Richmond are bad for business? In any event, the anti-business City Council he loves to put down resolved the issue with Chevron to the mutual satisfaction of both parties, negotiated by those anti-business councilmembers he loves to bash.
5. Just this week, the City Council unanimously rejected the imposition of rent control as part of the Housing Element of the General Plan. What’s the issue here?
6. Ah, the Planning Commission. There is no evidence that the Planning Commission has stopped any development, nor do they have the power to do so. Show us the facts.
7. This is a good one. A bicycle lane blocking truck access to a local business? Where? When? I would like to see that. The only blockages I ever hear about are by long trains, but the Chamber of Commerce is silent about that. Got to look out for those railroad businesses.
8. Genser is simply wrong about the General Plan. The General Plan 2030 is an aggressively pro-growth document, potentially increasing the opportunities for development in Richmond by thousands of units, acres of commercial space and tens of thousands of jobs. The new General Plan projects between 2005 and 2030 additional population of 41,050 and job growth of 22,488. However, the new General Plan provides capacity for population growth of 50,000 and job growth of 109,165. This is even assuming low density zoning in the North Shoreline which ultimately was not approved. As usual, Genser has no details and no evidence to support his theme that it will stop development and not encourage it. Obviously, he has not read the Economic Development Element of the General Plan — see excerpt below — which focuses on strategies for attracting and retaining businesses.
Key Findings and Recommendations — Richmond will achieve its local economic development goals by leveraging its key assets, which include: excellent location with access to a range of transportation options; proximity to major educational institutions; and access to extensive parklands, trails, developable land and a City-owned and operated port. Residents, businesses and policy makers will identify new and creative ways to support development of a diverse employment base and new sources of revenue that will benefit the community. Richmond will respond to both global climate change and the shift in global industrial activity by promoting the next generation of green industry, research and development and information technology. Another promising opportunity involves the redevelopment of underutilized land. Developable land is scarce in the Bay Area; however, Richmond has a significant number of developable acres with good transit connections near its employment centers. The following key findings and recommendations are derived from the existing conditions and the community’s future vision.
The biggest impediment to business over the last several years in Richmond as everywhere else, has simple been a sluggish economy, but that is changing.
The Bay Area economy in 2012 powered to its strongest job performance since the dot-com boom, a state government report showed Friday, a clear indication that the region has emerged from the Great Recession (Contra Costa Times, “Bay Area added more than 91,000 jobs in 2012, the strongest annual performance in more than a decade,” January 18, 2011)
As Richmond positions itself to attract its share of the recovery and the jobs that go with it, what we need to focus on are public safety, infrastructure, permitting services and quality of life issues. That is what our City Council has been doing and will continue to do. Businesses don’t really care about any of the issues on Genser’s list.
I challenge Genser, Waller and the Chamber of Commerce to work with the City Council on issues that really matter to business and cease spreading the mythology of a city council that is unfriendly to business.