Published February 16, 2010
Volume 18, Number 2

Economic Aid Aimed at Tri-Valley

Stimulus money is coming to the Tri-Valley. It has taken a while, which has been frustrating to many, but programs are now in place to distribute the federal funds in ways designed to spur local economic development.

In the Bay Area several organizations concerned with regional prosperity have been working closely with various levels of government and community organizations to direct the spending to targets that will have a significant impact. Pleasanton is fortunate to be in the sphere of influence of two such organizations: the Tri-Valley Business Council (TVBC), based here in Hacienda; and the East Bay Economic Development Alliance (East Bay EDA), in Oakland. In different ways, each focuses on making sure the region has the critical ingredients for business success, and each has been collaborating on action plans that address the areas of biggest need.

“One of the challenges with the federal stimulus package is that it has taken a long time to interpret how it can help us,” says Toby Brink, the TVBC’s President and CEO. Established in 1994, the TVBC brings Danville, Dublin, Livermore, Pleasanton, and San Ramon together under one economic development organization. Its mission is to advocate for business on regional, state and federal issues that enhance the economic vitality of the region.

Brink announces that initiatives that have been four to five months in the making have finally been woven together into action plans. Of special interest to Hacienda employers are the economic incentives available through a back-to-work program being rolled out this month.  The Tri-Valley Business Council is playing a lead role in employer recruitment for the American Family Recovery Project, an American Recovery and Reinvestment Act (ARRA) project led by the Tri-Valley Community Foundation and Alameda County Supervisor Scott Haggerty.   “We are collaborating with the Tri-Valley Community Foundation and Supervisor Haggerty to get America back to work,” Brink relates.

This new program uses federal stimulus money to fund the hiring of unemployed Alameda County residents. Job seekers must meet certain eligibility requirements, such as a maximum gross income limit and having a child 18 years old or younger in the household.

The federal funds will pay 80 percent of the salary and payroll taxes of qualified new hires through September 30, 2010. There is no limit to the number of positions an employer can fill through the project. “A company that has been concerned about the costs of a new employee now has a real incentive to hire,” Brink enthuses. “Employers can also use this as an opportunity to try someone out to see if there’s a match. It could be a temp-to-perm position. Hopefully by the program’s end, the economic situation will have improved enough to bring that person on full-time.”

The hiring support is not limited to any specific job sector. “The job could be for a software engineer, a bank teller, or machine operator” Brink notes, emphasizing, “The only restrictions are based on the individual’s income and having a child under 18 at home.” A non-job component of the program focuses on providing emergency services--money for housing, gas, basic utilities, and food.  During these challenging time, support for basic needs helps those that are struggling focus on getting back to work.

One of the advantages of the program for applicants is that it does not discriminate based on net worth, Brink points out. “It’s based on gross income in the past month, so if someone has been on unemployment for four months, he/she could potentially qualify, regardless of the value of his/her physical assets. It could apply to a white-collar professional who’s been out of work three to six months. If last month he earned zero and had a child under 18, he qualifies.”

With program funds available only through the end of the third quarter, Brink stresses the narrow window of opportunity and the need for employers to move quickly.

“We hope the program will be extended, but there is no guarantee, so it’s very important for Hacienda employers to act now,” he says. Funding has been secured, and a team of HR professionals is already in place at the Tri-Valley Community Foundation offices to work with both employers and job seekers to get Tri-Valley residents back to work.  Applicants will be vetted to make sure they have the appropriate skill sets and meet all the guidelines for funding.

Brink does not predict how many participants the program will attract. “We expect the number of job applicants to exceed the number of positions available, but we have the funding to put more than 500 people to work.” The process starts with the employer submitting a job description of the hiring position to the project staff.  Interested employers may contact amfamproject@tvcfoundation.org for more information.  “Employers shouldn’t wait until the last minute to take advantage of this opportunity,” he advises. “They should get in the pipeline early to receive maximum economic benefit.” 

Five employer information sessions are scheduled starting February 17.  One will be held in each city/town in the Tri-Valley.  Exact times and locations will be posted on the program’s website: www.amfamproject.org.

Brink also reports that a proposal to designate the Tri-Valley as a state innovation hub is currently under consideration in the Governor’s office. “We have an 80 to 90 percent chance of success, mainly because many of the guidelines for this designation are based on input from Sandia National Labs and Lawrence Livermore National Laboratory,” he comments. The I-hub program brings together the labs, agencies, and innovators  in a collaborative effort, whether rolling out technology from the labs or crafting investment credits for research and development.

The state of California is not the only source of assistance in this vein. Brink also just met with representatives from President Obama’s economic development department. “They are looking at innovation clusters throughout the U.S., so there is potential for federal money to flow through these I-hubs as well. It has taken so long to get to this point, and my hope is that it is completed before the end of the year.”

While the I-hub is focused mainly on innovative clean technology applied to transportation, “that doesn’t necessarily limit the type of work that qualifies,” Brink points out. “There are all types of clusters growing around an innovation hub. We can expand the parameters; our goal is to support these initiatives by bringing the required pieces together for an innovative region.”

Two pieces that Brink has identified as missing from the Tri-Valley economic development engine are a strong venture capital community and a major research university. TVBC is addressing these needs as well.

“We have forged a partnership with a local venture capital firm with a $300 million fund. It has four partners, all operations people who understand what it takes to bring new technology to market,” Brink relates. “Through our Tri-Valley Innovation Network we are looking for companies with great potential for growth that agree to meet regularly to evaluate their business plan and receive coaching for the funding pitch. The focus is on anything with a scientific or innovative bent to it.” 

There are a few contenders in the research university pool as well. The University of Michigan is seriously interested in establishing a West Coast campus, Brink reports, and a few other major universities are being courted as well.

Bruce Kern is Executive Director of the East Bay EDA. The organization was originally founded in 1990 to promote investment and job growth in Alameda County, with Contra Costa County coming under its umbrella in 1996.

Kern has some good news on his mind. In mid-January, Bridgelux, a cleantech manufacturer of LEDs (light-emitting diodes) used in indoor or outdoor lighting arrays, announced it was leaving Sunnyvale for Livermore. Its expansion plans entail transforming two existing buildings into 200,000-plus square feet of production space, slated to open this spring. Over the next five years, some 400 new hires are expected to join the company’s current workforce of 100 employees. A Livermore official was quoted as saying that Bridgelux was looking to expand offshore when the space became available. This further underscores the importance of this win for the region, Kern points out.

East Bay EDA has also been extensively involved in supporting cities as they work with local businesses that are examining their options in the current economic climate. For example, a widespread collaborative effort scored a big victory with the retention of Bayer Pharmaceuticals’ $100-million complex in Berkeley. “We were competing against Boston, and we won,” Kern remarks. 

Another success was obtaining federal grants and loans for Solyndra, the Fremont-based high-volume manufacturer of photovoltaic systems for the commercial rooftop market. This time Oregon, Nevada, and Arizona were contenders for the 300,000-square-foot manufacturing plant, but a cooperative regional effort was once again able to close the deal—which resulted in the largest real estate transaction in the Bay Area in the last decade, Kern points out.

Venture investment and a $500 million loan guarantee from the Department of Energy (DOE) allowed construction to go forward on Solyndra’s second solar panel manufacturing plant, Fab 2, designed to help the company fulfill its announced contractual backlog of over $2 billion. Together, the two fabs are expected to produce enough solar panels over their lifetime to cut over 350 million metric tons of CO2 emissions or 850 million barrels of oil.

Currently underway and visible from I-880, the fast-track project has generated many construction jobs and is expected to be completed in the spring. Just before Christmas, Solyndra filed a registration statement for an IPO.

Kern has also been keenly observing other regional economic indicators, some of which are showing signs of an awakening recovery. “In the last few months we’ve seen a bottoming out of home sales prices, and as floors are established, our very important construction sector is able to re-engage,” he comments.

Some residential developers are beginning to reacquire prime real estate, while others are anticipating improvement toward the end of this year and into next. Construction is really very important to this area, Kern says, so these are encouraging signs.

As the construction market improves, the financial services sector should be close behind, he continues. “The Tri-Valley and Walnut Creek areas had a lot of mortgage-related and back-office operations, businesses that were particularly hard hit as construction declined,” he states. “Mortgage lenders, loan packagers, title companies--all of those are tethered together to the very important residential construction sector. I think those corrections have worked their way through.”

He is not nearly as optimistic about commercial real estate for the short term, anticipating that some inadequately capitalized projects will soon be seeing difficulties. The credit crunch is another short-term problem, and the impending shutdown of New United Motors and its community of suppliers is a major concern. 

NUMMI’s closing is expected to have a direct or indirect impact on almost 19,500 people statewide, he says. Alameda County is home not only to the plant and around 4,000 workers, but also to a number of suppliers, many along 880 corridor up to Oakland, some in Livermore and the Central Valley. Professional service providers are affected as well.

“We are working to put in place a support system for workers and their families. We have done outreach to suppliers, and are putting together a regional plan for the East Bay that is directly associated with the economic impacts of the closing of this facility. We are busy trying to line up the resources required.

“We continue to plan for the future, with the premise that innovation is the seed corn of new companies,” Kern goes on to say. “The Tri-Valley and the national labs are really working diligently with communities to promote further collaboration, competing for national energy and related grants. We continue to seek opportunities to attract investment in our innovative companies. There will be changes in response to the near-term issues all businesses are facing, but there is very significant investment coming to the East Bay.”

For more information about these organizations and how their initiatives might be of benefit, contact Toby Brink at (925) 575 0615 or visit www.trivalley.org; and Bruce Kern at (510) 272-3874 or www.eastbayeda.org


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