Posted by: macjohns | October 26, 2011

The Sacramento Region’s Economy is ALIVE!

Last Thursday and Friday I got the privilege of being able to attend the Third Annual Sacramento Regional Internal Study Mission. The event was put on by the Sacramento Asian and Pacific Islander Chamber of Commerce as well as a host of community partners including the Center for Regional Change.

The two day event’s goal was to showcase those sectors in which Sacramento is “Best of, First at, and Leader in”. In that respect there was a real wealth and variety of speakers, interesting destinations throughout the region, and a lot of networking between professionals interested in seeing the region thrive.

Destinations and Speakers:

West Sacramento: Raley Field-Redevelopment

The first stop on the tour was Raley Field in West Sacramento. Near the river, the site used to be home to a number of industrial warehouses. This $53 million dollar project’s goal was/is to: conduct environmental remediation (the site was home to a fertilizer plant), create a stadium with an entertainment district around it, link this development to downtown Sacramento, include a bike and pedestrian trail  to make the river more accessible, and create opportunities for commuting outside of a car with streetcar service.

To start the project, a JPA (Joint Powers Authority) was formed that included: the City of West Sacramento, Yolo County, and the County of Sacramento. From there, bonds were issued through the JPA. They worked from the idea that this project could transform the area much like the building of Pacific Bell Park in San Francisco transformed the South of Market Area.

Toby Ross, the City Manager of West Sacramento described the “Green drainage system” they were able to utilize that took advantage of the fill (sand) that exists in the area.  With this feature they were able to proceed without any increase in the storm drainage system.  In terms of Economic impact, the project is expected to add 4000 residential units plus office and commercial space (with enough space for additional developments in the future).

For now, fingers remain crossed as the legal challenge to the virtual dismantling of redevelopment agencies is under way. Without redevelopment funding flowing to this project in the near future, plans will have to change dramatically.

West Sacramento City Hall: Transit-Oriented Development (TOD) and Economic Development.  

Mayor Cabaldon, of West Sacramento, opened this portion of the event. He called transit an enabler and not the sole reason that people move into an area. Meea Kang, Founding Partner of Domus Development, then spoke about some of the barriers to TOD.  They include but are not limited to: restrictive land uses in urban areas, community resistance, lack of political will, high cost of land, and the financing of the affordable housing piece of the developments.

Ms. Kang did mention successes with TOD in the region, however, including the La Valentina Project. It brought 81 units within 1 minute of light rail, redeveloped a blighted and toxic site, created units priced from $400-1000 per month, serves as a gateway to Downtown Sacramento, and features townhouses on one side that are nearly zero net energy.

Unlike Los Angeles, which has tried to accomplish TOD by locating developments near freeways, Sacramento is taking the route that cities like Oakland have taken in putting these next to rail. In fact, Kang is a “development radical” because of her insistence that we discontinue subsidizing parking spaces (as opposed to more housing). She cited the fact that developers in New York   City don’t even bother to build parking into their developments because of its high price tag and lack of feasibility there. Here in California, however, paying for spaces means that when developments are complete, we have built housing for the wealthy and the extremely poor with little of it affordable to the middle-income brackets. Mayor Cabaldon also chimed in that mandating parking is equivalent to mandating a certain number of home theaters per 1000 ft. of development.

The Center for Land-Based Learning: The Farm on Putah Creek (Agribusiness)

As our bus pulled into what looked like “America’s Heartland”, we were encouraged to notice the plants and grasses that surrounded the farm. Mary Kimball from the Center for Land-Based Learning pointed out this area (planted by high school students) was perhaps the future of farming. The monocultures were enveloped by native habitat for birds, insects and others. Retention ponds were also included and both of these additions served to recharge the groundwater and emulate/encourage the biodiversity that protects and nurtures plants in the wild. The center focuses on wildlife-friendly agriculture but is open to both conventional and organic.

As part of economic development in the agricultural sector, the center boasts a Farm Incubator program where novices to agriculture (city and suburb slickers) can get their feet wet with a half an acre of land and all of the help that one can imagine. Some enterprising individuals eventually acquire more land and turn a profit, some just get an awesome experience. In terms of  agriculture in the region, a panel of experts engaged us all in discussion about the importance of the sector in the regional, state, and world economy.

Interesting tidbits included:

  • The partnership between agribusiness and UC Davis makes the region the “Silicon Valley of seeds”
  • the vibrant economy, wealth of natural resources, and ideal climate all contribute to the fact that 4 out of 5 of the top agricultural products are grown right here.
  • the region has roughly 4 million acres of farmland and over half of that land is in active production.
  • The region is well equipped to feed, clothe and shelter itself in the event of some unfortunate situation
  • The region boasts a map that shows where all crops are grown on a parcel-by-parcel basis. this is necessary in order to anticipate and adapt to changes such as a rise in fuel prices or a fall in the price of a certain agricultural commodity.
  • the local industry generates $1.6 billion in primary, secondary, and tertiary economic effects
  • We produce 3.2 million tons of food and consume 2.2 million tons
  • Researchers continue to work with the agricultural sector in order to turn agricultural by-products into the energy that can power our homes, cars, and smartphones.

Increasing the economic effects of this sector, according to the panel, could entail: enhancing the region’s ability (currently underdeveloped) to process and distribute foods so that we don’t have to ship them raw only to have them come back to us in different, value-added forms; creating connections between the agricultural sector and the ports of Stockton, Sacramento, and Oakland since their fates are intertwined in many ways; working closely with UC Davis researchers studying the effects of Climate Change (for instance the Wine Country is moving steadily toward the Central Valley and coastal areas); realizing, that we are the “Saudi Arabia of food” and that the rise of other nations will only increase world-wide demand for our products.

I should also add that the Strategic Growth Council has given the region a grant to study the eating habits of the region’s inhabitants and also the parts of the region that are “food deserts”. These studies have the potential to open up market opportunities for those who can satisfy those tastes and eliminate those deserts. SACOG itself is also looking at land use and transportation investments that could facilitate growth in this sector.

Crocker Art Museum: Civic Amenities-Past, Present, and Future

This portion of the event combined not only the history and present state of the Crocker Art Museum, it also included the B Street Theater, and the Executive Director of Mayor Johnson’s “Think Big” Sacramento Regional Initiative for the building of a new Entertainment and Sports Complex in the region.

Lial Jones, the Director of the Crocker Museum opened the conversation by describing the museum as having been moribund in 1999 when she arrived. In record time, they took up a campaign for capital expansion, worked with the board of directors to enliven the museum, increased visitation from below 90,000 per year to more than 170,000, and increased membership from roughly 3,000 to 13,500 at last count. The museum is a public/private partnership between the city and a private nonprofit. Their greatest accomplishments being that: individual giving now accounts for more of their revenue than the city’s public investment, and that they are world renown for having the finest collection of drawings in the world. The tour of the museum was amazing and it is increasingly becoming one of the hottest lunchtime destinations in Sacramento.

Next was the B Street theater. The theater is unique in its community engagement in that it encourages local kids to write plays and some are chosen to be enacted for kids all over the community. It gives the children a sense of ownership of both the plays and the theater itself. From what started out as a “tough shed by the railroad tracks”, the theater now features 35-38 plays per week including The Giver (my own fifth grade favorite) and the Diary of Anne Frank.

Chris Lehane then led the conversation around the opportunities and challenges of not only financing and constructing and “Entertainment and Sports Complex” (and not just a stadium), but having the ins and outs of the project finalized by December 13, 2011-the last city council meeting of the year.

The initiative includes 72 local officials that worked from Memorial Day to Labor Day, 2011 on the intricacies of the project. Their goals are to: protect the taxpayers, create a minimum of 4,100 jobs on the project, generate the estimated $7 billion in direct economic impact, and protect the city’s interests. They are working with AEG, the company that owns about half of all U.S. stadiums and manages many concert tours, in order to have a highly regarded company at the center of the planning. On September 8th, the initiative presented: user fees, private sector financing, public contributions (i.e. land in Natomas, signage legislation for freeways etc.) to the council. If all goes well, the actual planning and EIR will happen in 2012 with a breaking of ground in 2013…with or without the Maloofs.

UC Davis Institute for Regenerative Cures: Health/Biosciences Innovation

The UC Davis Medical Center, Institute for Regenerative Cures was the second to last stop on our tour. There we met Dr. Bauer and his staff who are working on the cutting edge of science in the biomedical field.

It is their goal to make irradiation, chemotherapy, and amputation a thing of the past for survivors of cancer using both adult and embryonic stem cells. They are even treating Huntington’s Disease (a terminal illness) by teaching the neurons of the brain how to deliver medicine. They conceptualize cancer as a tree, where current treatments are able to get rid of the branches and the trunk but not yet the roots.

Cardiac regeneration for those who have lost heart tissue for a variety of reasons (especially heart disease/myocardial infarction) is also a goal. In children, it is their hope to limit the number of lifetime surgeries that children with heart problems must undergo. They are also looking into using stem cells to regenerate human kidneys (as many people die on lists awaiting donors). Finally, they are applying for funding to study the development of anti-HIV stem cells that can manufacture CD4 cells that target HIV. This technology could mean the end of daily medications for millions who suffer from this chronic illness.

The economic impacts of this center are not to be downplayed. Their research touches not just the illnesses listed above but also: spinal chord injuries, liver transplantation with stem cell created liver tissue, and they are able to save 9 out of 10 limbs lost to poor circulation to boot ( 180,000 people lose limbs to poor circulation and underdeveloped vasculature in this country alone).

Future plans include: doubling the size of the cancer center, upgrading to tele-health with all of their new operating rooms (think of Skype tailor-made for medical visits), and becoming the healthcare capital of the Great Central Valley.

Entrepreneurship, Investment and Opportunity- ClikNation Headquarters

Unfortunately the tours and the larger event had to come to a close. However, it ended with many rays of hope for the region. The conversation began with a focus on the “4th sector”, composed of those entities that exist at the nexus of the private/nonprofit, and governmental sectors. There was a brief conversation about social enterprise where businesses make a profit by solving social problems.

Meg Arnold from the Sacramento Area Regional Technology Alliance spoke about the engagement of businesses that are founded in this region. In her view, they are much more committed to the region and invested than those who are encouraged to come here through market mechanisms. One of the biggest concerns for the region is not the talent pool, nor is it the lack of other resources. Instead it is the image of the region as not being a center of innovation. Mark Otero, Founder of ClikNation (an online gaming successful startup) mentioned that he must compete with San Francisco and Silicon Valley because potential employees do not have a sense that there are other companies in this region to which they could transfer laterally. With this mindset, many would rather move or remain in the Bay Area so as not to “trap” themselves in an area where they are too heavily reliant on one company.

Otero and others also commented that capital formation should be a key goal of policymakers and others in the region. As it stands, many investors in the high-tech sector in Sacramento reside in San Francisco. So even the success of the industry in this region still overwhelmingly benefits the Bay Area. The conversation then turned to large pension funds as pools of capital that could be utilized in a time where both credit and capital are hard to come by.

The event closed after that final presentation and we all boarded the bus back to Downtown Sacramento. In every way, the tour was eye-opening. I was able to learn a few redevelopment and financing terms, tour a world-class museum, make plans to see The Giver performed on-stage, get a small glimpse of the “Saudi Arabia of food”, and get a sense of renewed hope that diseases that have long plagued humanity might one day go the way of Scurvy. In every way Sacramento is alive: economically, culturally, and politically; Now the task is to accomplish something amazing and unique with all that “stuff” in our own backyard.

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