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So with all my complaints about wasted tax money for educational programs or caltrans projects why do I support the arena? Well perhaps because its the first "real" long term economic growth project that involves a private sector industry that can have a huge impact on the city. If Oklahoma City can afford to build an arena you would think the capital of California can do it. How long do we want to dredge along like a snail letting the good old power network in Sac do their thing? I want to break out of that cycle and bump up some growth and private sector in Sacramento and specifically downtown Sacramento.
Right on.
Sacramento is and always has been more than a gov't town, just as it never really was an agricultural town as so many think we were except for the Blue Diamond Almond Growers Exchange(which has always been a major success story for Sacramento and still is) , Tomato canning, and Rice Cooperatives in West Sac.
Sacramento has an awesome history and economic history beyond government; it's just that gov't, bureaucracy and it's mentality is a much larger share of Sacramento's identity than other places.
I, also, would love to bump up the private sector in Sacramento and I have seen the resistance, even in these threads and blogs. And this is what I like about Mayor Kevin Johnson -- he has a big vision for Sacramento that is beyond gov't.
Our Mayor has always wanted to make it easier for the private sector from small business to big companies to set up shop in Sacramento -- If Sacramento wants a diversified and strong economy like Austin, Denver, Portland, Seattle, San Diego, San Francisco we must include a larger share of the private sector and middle/upper income housing in Sacramento's core.
This is the promise of the Arena, a private company investing hundreds of millions of dollars in Sacramento's core. As good as affordable housing is for some of us, it doesn't bring in people with large disposable incomes to feed and build a strong economic core.
Blue Diamond, the canneries and rice mills aren't evidence that we were an "agricultural town," any more than the slaughterhouses of Chicago meant they were an agricultural town. They are evidence of our origins as an industrial city. Those industries located here because we had a modern transportation network, where all the farm towns could send their stuff to be transformed into something else and shipped across the country. But we became a political capital and a transportation center at about the same time, and for the same reasons--our advantageous location in the center of the state.
Austin isn't all that great an example of a diversified economy. Their biggest employment sector is government too, maybe a 2% difference between Sacramento and Austin when it comes to the government sector's share of local jobs (considering California has a bigger population and larger economy than Texas, understandable) while their tech sector is maybe 4% vs. our 2%.
There is a lot of talk about bumping up the private sector, but not much talk about what kinds of jobs we should be trying to attract--what fields specifically do you mean? A lot of the glamorous parts of the economy, like biotech and tech-sector employers, don't really employ a large number of people--they're knowledge intensive but don't require a lot of manpower. Traditionally, the way cities attract big business is by facilitating growth for their local small businesses, rather than headhunting employers from other areas. From the Central Pacific Railroad to Tower Records, Sacramento's big business leaders started here and grew outward, rather than being begged to relocate here by smokestack chasers. There is a lot of talk about "entrepreneurship" locally, but what that means, primarily, is small local businesses, some of which grow into bigger businesses.
As to people with large disposable incomes, the sort of folks renting in the WAL do have disposable incomes, and they will spend a lot more of it in their own neighborhood. People who live in the suburbs and visit downtown occasionally will spend a bit when they come to visit, but most of their money will be spent back where they live. The business model of the arena isn't all that different from the K Street mall, in both its 1969 and 1993 incarnations--they were heavily ballyhooed at the time, but in both cases their main result is a short-term boost in the economy as money is spent demolishing old stuff and building new stuff. There's a land grab and the players get shuffled a bit. But if the long-term result isn't a dramatic increase in the number of people actually living downtown, it fizzles out after a few years and ends up in disappointment. Will the same thing happen this time? Well, that all depends on how much housing we build in the central business district before the temporary effects of that $300 million loan wear off. If we can get up to 40,000+ living in the central city, that extra 10,000 residents will mean a lot more total economic activity than the visitors to an arena. In the long run, the residents will be a more important factor than the arena, which at best serves as a temporary leverage to boost downtown's economy. If we don't take advantage of that leverage to build the housing, its advantage will be lost.
As to people with large disposable incomes, the sort of folks renting in the WAL do have disposable incomes, and they will spend a lot more of it in their own neighborhood. People who live in the suburbs and visit downtown occasionally will spend a bit when they come to visit, but most of their money will be spent back where they live. The business model of the arena isn't all that different from the K Street mall, in both its 1969 and 1993 incarnations--they were heavily ballyhooed at the time, but in both cases their main result is a short-term boost in the economy as money is spent demolishing old stuff and building new stuff. There's a land grab and the players get shuffled a bit. But if the long-term result isn't a dramatic increase in the number of people actually living downtown, it fizzles out after a few years and ends up in disappointment. Will the same thing happen this time? Well, that all depends on how much housing we build in the central business district before the temporary effects of that $300 million loan wear off. If we can get up to 40,000+ living in the central city, that extra 10,000 residents will mean a lot more total economic activity than the visitors to an arena. In the long run, the residents will be a more important factor than the arena, which at best serves as a temporary leverage to boost downtown's economy. If we don't take advantage of that leverage to build the housing, its advantage will be lost.
Uh, yeah, but again it depends.
Arena is way better than spending $240,000 per cameo resident. We obviously don't have 2.4 trillion dollars to pay for 10,000 cameo residents in the central city. Plus that's overly optimistic as Hotel Berry actually didn't add any new residents.
Blue Diamond, the canneries and rice mills aren't evidence that we were an "agricultural town," any more than the slaughterhouses of Chicago meant they were an agricultural town. They are evidence of our origins as an industrial city. Those industries located here because we had a modern transportation network, where all the farm towns could send their stuff to be transformed into something else and shipped across the country. But we became a political capital and a transportation center at about the same time, and for the same reasons--our advantageous location in the center of the state.
These are fastidious characterizations, and inaccurate. Almonds is agriculture and the largest Almond producers in the world are in the Central Valley. If it were not for the Almonds, Blue Diamond's facility would not be in Sacramento, nor anywhere in California. Same applies to the tomatoes and rice with an agriculture nexus to Sacramento's economy.
The Blue Diamond facility is the epitome of "Agriculture" in Sacramento. Those Almonds are processed in Sacramento and have been for over 55 years. Blue Diamond is a true private sector world renowned success story employing 10's of thousands right in Sacramento's downtown core for decades.
Nor did I say that the Hotel Berry was the perfect, flawless model upon which all downtown housing should be based--that's your particular obsession. And even if it was, $240,000 x 10,000=2.4 billion, not trillion. The idea is a variety of housing, from single-family homes to high-density apartments, in a variety of incomes, from high-rise/high-dollar to low-income studios. The units on the lower end of the economic spectrum do require subsidy to be built, because building downtown makes it harder to externalize construction costs the same way that greenfield suburb construction does. But we need a proportion of low-income/affordable units, as there is not an unlimited market for high-end housing, and there are funding sources (other than borrowing money from Goldman Sachs and paying it back from the general fund) to facilitate construction of at least some of that housing. Currently the target for affordable housing (low, very low and extremely low income) is about 15%, and most requires less subsidy than ELI housing, so really we're talking about 1500 affordable units and 8500 market-rate units.
Now, that 85% of market-rate housing is the other building boom we're seeing underway, but primarily in Midtown and outside the central business district that gets all the attention. A lot of these are small infill units, located in alleys and small vacant lots and industrial areas, sometimes just a couple of units (like the ones just recently completed on S Street and 21st next to 1 Trick Pony) and sometimes larger (like 2500 R, 30 or so single-family homes) and even more are planned (like the Creamery, 100 single-family small lot homes planned in Alkali Flat) These infill projects don't get attention because they aren't big, they aren't flashy, and for the most part they aren't subsidized. But they matter in the aggregate, and we're already something like 2000-2500 units of housing up from the 2010 census, which means we need maybe another 5000 units to give the central city another 10,000 or so residents (assuming about 1.5 people per household.) And there's plenty of room to build that housing without demolishing the existing urban fabric, if we just used what is already there--existing vacant buildings, mostly excess office space, and parking lots.
Personally I consider the Township 9 kind of a stretch from downtown (in terms of mileage, it's about as far from East Sacramento to downtown as it is from T9) but the first units of housing in Township 9 are finishing construction, the low-income units that had funding available, and now that the housing market is coming back, the next phases of housing (which are market rate) should start construction. McKinley Village is starting construction of its infrastructure and roadways, which is about as far from downtown as T9 but without T9's better public transit connection. It's not my personal ideal of infill, but it's proof that there is a market for market-rate housing, enough to attract private investment. I'd bet that a lot of the target market for McKinley Village might be even more interested in a midrise or highrise condo in the heart of downtown, but the builders haven't gotten up the nerve to offer them yet.
The kind of timidity and resistance to change that so many here seem to attribute to government, I see in the local real estate community. They really love the suburban model, it's a product they know and they can't bear to change it because they fear risk and upsetting their own business model. And a lot of the big players in that industry still think downtown is icky and scary. But there is a new breed who live downtown and love it, and they're going to eat the old guys' lunch before long.
Blue Diamond, the canneries and rice mills aren't evidence that we were an "agricultural town," any more than the slaughterhouses of Chicago meant they were an agricultural town. They are evidence of our origins as an industrial city. Those industries located here because we had a modern transportation network, where all the farm towns could send their stuff to be transformed into something else and shipped across the country. But we became a political capital and a transportation center at about the same time, and for the same reasons--our advantageous location in the center of the state.
Austin isn't all that great an example of a diversified economy. Their biggest employment sector is government too, maybe a 2% difference between Sacramento and Austin when it comes to the government sector's share of local jobs (considering California has a bigger population and larger economy than Texas, understandable) while their tech sector is maybe 4% vs. our 2%.
There is a lot of talk about bumping up the private sector, but not much talk about what kinds of jobs we should be trying to attract--what fields specifically do you mean? A lot of the glamorous parts of the economy, like biotech and tech-sector employers, don't really employ a large number of people--they're knowledge intensive but don't require a lot of manpower. Traditionally, the way cities attract big business is by facilitating growth for their local small businesses, rather than headhunting employers from other areas. From the Central Pacific Railroad to Tower Records, Sacramento's big business leaders started here and grew outward, rather than being begged to relocate here by smokestack chasers. There is a lot of talk about "entrepreneurship" locally, but what that means, primarily, is small local businesses, some of which grow into bigger businesses.
What matters are the industries that bring new money into the region. This is why State government matters so much locally. the State takes money from the rest of the state and spends a lot of it here. When the state government is doing poorly so is Sacramento. When people spend money on say buying a new BMW. Some of the money is spent locally on wages for the dealer and the salesman, but some of the money leaks out of the region and is sent back to Germany or where ever the car was built and that money leaks out of the area. Why jobs at places like Intel and HP are huge isn't just that the wages are high, but because when HP or Intel sells products using stuff that was made locally, it brings money into the region from the rest of the country or possibly even the rest of the world. When the employees of Intel or HP spend money on doctors and restaurants that money is recirculated in in the Sacramento region. But small business like opening a restaurant while they provide some employment to people, they are mostly just recirculating the money that is already in the area. Attracting businesses that will bring in new money to the region is important. That is what drives growth.
Quote:
Originally Posted by wburg
As to people with large disposable incomes, the sort of folks renting in the WAL do have disposable incomes, and they will spend a lot more of it in their own neighborhood. People who live in the suburbs and visit downtown occasionally will spend a bit when they come to visit, but most of their money will be spent back where they live. The business model of the arena isn't all that different from the K Street mall, in both its 1969 and 1993 incarnations--they were heavily ballyhooed at the time, but in both cases their main result is a short-term boost in the economy as money is spent demolishing old stuff and building new stuff. There's a land grab and the players get shuffled a bit. But if the long-term result isn't a dramatic increase in the number of people actually living downtown, it fizzles out after a few years and ends up in disappointment. Will the same thing happen this time? Well, that all depends on how much housing we build in the central business district before the temporary effects of that $300 million loan wear off. If we can get up to 40,000+ living in the central city, that extra 10,000 residents will mean a lot more total economic activity than the visitors to an arena. In the long run, the residents will be a more important factor than the arena, which at best serves as a temporary leverage to boost downtown's economy. If we don't take advantage of that leverage to build the housing, its advantage will be lost.
These are fastidious characterizations, and inaccurate. Almonds is agriculture and the largest Almond producers in the world are in the Central Valley. If it were not for the Almonds, Blue Diamond's facility would not be in Sacramento, nor anywhere in California. Same applies to the tomatoes and rice with an agriculture nexus to Sacramento's economy.
Fastidious? Well, my posts are very neat and tidy.
Growing almonds or tomatoes is agriculture, but you're talking about the Central Valley as a whole, not the city of Sacramento. We're the industrial center of the Central Valley, which is why the tomatoes, almonds, rice, hops, grain etcetera produced in the Central Valley got shipped here from the farming/agricultural regions to get turned into something that could be shipped via our railroads. Not particularly different from the way that San Francisco and the Bay Area was the industrial production center for the agricultural goods of the Bay Area.
That's what cities do--they turn raw materials into products. Doesn't matter if it's coal, iron, wood, grain, tomatoes or almonds. We're no more a farm town than Detroit is a mining town because cars are made of steel that came from materials extracted from mines. Turning a farm-fresh tomato into a mass-produced canned good that can be shipped internationally is an industrial activity, requiring large amounts of labor, sources of power, and a transportation network. That's what built Sacramento the industrial city. We had the two biggest canneries in the United States--plus the American Can Company in East Sacramento, which was not a cannery--they were the nation's largest producer of tin cans!
Now, Los Angeles really was an agricultural community--from 1776 until the 1880s, Los Angeles was best known as a cattle ranching area, and until 1950, Los Angeles County was California's "farm to fork" capital, with more agricultural production than any other California county. Same goes for San Jose, too small and in the wrong place to remain California's capital city, best known for plums and apricots before the postwar tech boom.
Sacramento's "agricultural heritage" is primarily a mythology created by its suburban boosters in the late 1890s, and turned up to full tilt in the 1950s, when the Chamber of Commerce was eager to abandon Sacramento's industrial past, eliminating the private-sector jobs in canneries and mills and demolishing the nonwhite neighborhoods where those mill workers lived, to destroy evidence counter to their "farm town" mythology. The Chamber of Commerce, predecessor to today's Metro Chamber, also heavily pushed the idea of Sacramento as center of government, because they felt that government was a "recession-proof" industry, requiring a growing body of white-collar (and white in general) workers who would buy new suburban homes. And we're still stuck with that slander today, because the descendants of the same mythology are still pushing to bring us back to the Gilded Age--even re-creating the old-fashioned "strong mayor" charter they first introduced in Sacramento in 1893, when we were a city of 25,000 people!
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The Blue Diamond facility is the epitome of "Agriculture" in Sacramento. Those Almonds are processed in Sacramento and have been for over 55 years. Blue Diamond is a true private sector world renowned success story employing 10's of thousands right in Sacramento's downtown core for decades.
Actually Blue Diamond, ask the California Almond Growers' Exchange, has been here since 1910. And they weren't the biggest employer in Sacramento--that was the Southern Pacific Railroad's Central Shops, the only place west of Pennsylvania where full-sized steam locomotives were built from the ground up. We were so renowned for our Shops' industrial skill and innovation that another transcontinental railroad, Western Pacific, located their main shops here specifically so they could steal SP workers! That also makes us unique--the only city in the United States that had the main shops for two transcontinental railroads. That's our industrial legacy, our real history.
Again, what sort of private-sector jobs, specifically, are you calling for? What sectors of the market? What industries? Are you hoping we can open a new tomato cannery or something? No argument that we need housing in great quantity back in the core--we're still paying for the misguided efforts of the Metro Chamber dating back to the 1950s.
Our Mayor has always wanted to make it easier for the private sector from small business to big companies to set up shop in Sacramento -- If Sacramento wants a diversified and strong economy like Austin, Denver, Portland, Seattle, San Diego, San Francisco we must include a larger share of the private sector and middle/upper income housing in Sacramento's core..
Exactly. If you want Sacramento city to grow and thrive it starts with private sector investment. With that comes more private sector jobs. More jobs downtown mean more middle and upper income people living in or near downtown, shopping, eating at restaurants etc. If that was the case today the downtown mall and K street would have probably been thriving instead of being mostly abandoned during the weekdays after 5 PM. Some people will scream gentrification. My god do you want growth and jobs or not? State jobs cant keep feeding everyone endlessly forever.
Quote:
Originally Posted by wburg
There is a lot of talk about bumping up the private sector, but not much talk about what kinds of jobs we should be trying to attract--what fields specifically do you mean? A lot of the glamorous parts of the economy, like biotech and tech-sector employers, don't really employ a large number of people--they're knowledge intensive but don't require a lot of manpower. Traditionally, the way cities attract big business is by facilitating growth for their local small businesses, rather than headhunting employers from other areas.
You have a point about the type of industry, but honestly Sacramento should consider any industry that is willing to invest in the area. Your point about biotech isn't all true. If biotech companies began investing in Sacramento it would have a domino effect by attracting other potential companies or retail. This in turn brings more jobs with well established companies that can hire hundreds of people not 5 or 10. Look at what happened to sleepy ol Folsom when Intel arrived. It turned Folsom into one of the more prosperous areas in the region. Now they have Micron, VSP many of the Corp offices for various companies. They didn't get there because of cute little local taffy shops and small local shops. Don't get me wrong. I support the local small business. I love a lot of the cool small shops and restaurants downtown. I just don't see much growth because a ceiling of fear pervades locals related to a love affair for small home grown shops and local government jobs.
Downtown has plenty of offices already, I think the vacancy rate is around 10%. I suspect what is holding back downtown is less inadequate office space than housing. The restaurants, bars and clubs don't survive off the lunch time rush alone, they need more people who live in the area who live in the area and patronize the shops bars and clubs at night when the office workers depart for the rest of the region.
Second building more office space downtown likely is a financial loser for the City of Sacramento. Back in 1986, San Francisco debated Measure M which put a cap on how much new office space could be built downtown. During this time, the City of San Francisco commissioned Sedway-Cooke study, which at the time people assumed that it would advocate for no growth moratoriums on office space. What surprised everyone is that the study found that cost of high rises to the city in terms of providing services to the office was as much as 25% greater than what the City would receive in property taxes because of prop 13.
Proposition 13 doesn't just apply only in San Francisco, it applies in Sacramento too. It wouldn't surprise me if the arguments of that study apply with equal force today in Sacramento.
Downtown has plenty of offices already, I think the vacancy rate is around 10%.
Actually for the third quarter, 2014, the vacancy rate was over 19%.
Last edited by MyNewsLogin; 11-01-2014 at 03:57 PM..
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