Corporate Philanthropy In Emeryville: A Great Hill of Beans

Emeryville's Businesses Care About Money,
Not Our Schools

What Kind of Businesses Does Emeryville Attract?

Greedy Ones

News Analysis
Emeryville is well known throughout the Bay Area as being foremost a business friendly town, a reputation that's been well earned over the years.  But civic boosters here, concerned about the optics of that lopsided message, have often attempted to draw a distinction between how well we've been able to leverage our businesses for community benefits received versus whatever virtues that may be garnered simply providing a good location for a host of corporate headquarters.  In this way, much has been made of the philanthropic generosity of Emeryville's business community, especially where monetary donations to our local public schools are concerned.

Sad:
Last year once again, Pixar gave nothing to
the schools in Emeryville, their hometown.
$1.2 billion 2015 box office receipts = zero
for Emeryville's schools.  

Here at the Tattler, we have shown how this meme is not represented by reality and is more fiction postulated by the businesses themselves than fact.  Readers may remember our 2014 story about Pixar's miserly lack of corporate donations to our schools after a very public campaign of claims to the contrary in the lead up to and running concomitant with their major corporate campus expansion, begun in 2004.
In fact, that's been a repeating theme here in Emeryville; business will conspicuously donate to the schools when there is public exposure, especially when they are engaging in large and consequential building projects and need public support but when the need for that support ebbs, the philanthropy likewise ebbs albeit quietly.

A quick look at Emeryville top ten largest businesses is revealing.  Based on gross receipts, the metric the City uses for taxing purposes, the combined top 10 businesses monetary donations to Emeryville's schools last year amounted to zero.  The only Emeryville corporation that gave any money at all to our schools was Wareham Development, a business not in the top ten.  Wareham it should be noted, is exposed and in the public eye while they prepare to build the contentious 'Transit Center' on Horton Street.  Tellingly, Wareham last year gave the Emery School District $25,000 while they sought permission to build their project; a gift very much needed and appreciated by our schools.

The List of  Corporate Shame- What's in their eye is not about what they provide to the community, it's about what they extract from the community.  The following Emeryville corporations, our ten largest and most preeminent businesses, gave no money at all to Emeryville schools last year:

1. Disney/Pixar, 1200 Park Avenue:   Zip to Emeryville Schools
2. Berkeley Research, 2200 Powell Street:   Nil to Emeryville Schools
3. Ikea, 4400 Shellmound Street:    Nada to Emeryville Schools
4. Tubemogul, 1250 53rd Street:    Zilch to Emeryville Schools
5. Home Depot, 3838 Hollis Street:   Scratch to Emeryville Schools
6.  Plum Inc, 1485 Park Avenue:    Naught to Emeryville Schools
7.  Griffols Diagnostics, 4510 Horton Street:  Nix to Emeryville Schools
8. Gracenote Inc,  2000 Powell Street,   Shutout to Emeryville Schools
9. Fantasy Junction, 1145 Park Avenue,  Nothing to Emeryville Schools
10. Novartis Institute,  5300 Chiron Way,  Ought to Emeryville Schools

Don't Listen to the Hype
Look at the Hill
Here's how much Emeryville's business community 
cares about the children in our community.

Corporate Donations to Our Schools? Pixar (& others) Ain't Feelin' It

In Emeryville, Corporate 'Generosity'
is Not Really Generosity

When It's Done, It's Done To Help Themselves

News Analysis

Q:  How much money did Pixar donate to Emeryville schools last year?
A:  Goose egg!

Corporations commonly donate money to needy causes in the communities where they're located.  It's an effective way for them to remove the taint of all the negative impacts associated with their presence for members of the community.   Emeryville, having been transformed into a corporate mecca over the last 20 years should be awash in donations for causes like education (the perennial corporate favorite) then right?  Wrong.
Corporations here start out giving to the schools, very visible giving usually when they need something from City Hall.  After whatever favors are granted and they no longer need us for anything however, corporate philanthropy commonly slows to a trickle or even stops altogether.  In the Emeryville world of corporate generosity, giving is seen as a means to an end.

Corporations like to foster community good will towards themselves by such indiscreet giving.  Sometimes their City Council sycophants will do the PR work and loudly proclaim the corporate generosity.  Of these, Pixar/Disney, with its $42 billion revenue in 2012 is notable.
It's common knowledge in Emeryville that Pixar is extremely generous to our schools; offering mentoring, screenings of their new films for fundraising and lots of money.  Everybody knows they give a lot to our schools, right?  One would expect them to, after all they're a multi-billion dollar corporation with a child-centric raison d'etre,  taking up a huge percentage of land in our town.  How much money do you think they donated last year?  The answer is zero.  Plus the film screening fundraisers have stopped all together.  Pixar's donations to the schools, started out robust as they sought to expand their campus a few years ago but since then the much ballyhooed spigot has quietly been turned off.

Pixar gave Emeryville schools 

zero last year

Back in 2004, when Pixar needed the citizens of Emeryville to approve a controversial major campus expansion, their corporate philanthropy towards Emeryville's schools was made known to everybody.  They endowed the schools over $100,000.  It was a major feather in their cap as they sought to persuade Emeryville residents to vote yes to Measures U and T; the ballot measures needed for their construction project to start.  The NO on U & T side said Pixar should build their campus expansion but should enter into a Community Benefit Agreement; an accord to provide local hire for the construction, to guarantee money for the schools, help with affordable housing and other such things.  Community Benefit Agreements (CBA's) are common in the Bay Area for major corporate planned unit developments like the Pixar expansion.
Pixar for its part said in addition to their ongoing generosity towards the schools (not forced but donated voluntarily), they would pay millions every year in business taxes.  As it turned out, after Measures U & T passed, they claimed their income was to be attributed to Burbank, the headquarters of Disney Corporation, of which Pixar is a subsidiary.  As a result of that claim, they paid Emeryville just $8000 in 2011 business taxes according to City Councilman Kurt Brinkman, and presumably similar amounts in subsequent years.

Hoodwinked
We just spent $100 million on Phase 1 of our campus.
But we're willing to lose that and leave Emeryville
if we have to sign a CBA like other corporations do.
Oh, and we're not paying taxes or giving anything
to your schools after you vote YES on T&U.

Before the 2004 election Pixar had just completed Phase 1 of their campus at a cost of approximately $100 million.  However, the thought of having to sign a CBA with the people of Emeryville was enough for them to claim they would pull up stakes and leave our town unless they got everything they wanted.  That was a threat Councilwoman Nora Davis and some of her colleagues said was absolute it should be noted, and she railed against any citizen who had the temerity to ask that City Hall negotiate with Pixar for a better deal.
 
Not Just Pixar
And that's the way it goes in Emeryville.  When corporations here face any kind of exposure, when they need something from us, out comes the check book and the corporate largess towards the schools flows like wine.
Bay Street Mall developer Madison Marquette gave $50,000 to Emeryville's schools in 2009 when they needed the Council to OK the exclusive right to negotiate (ERN) for the "Site B" mall expansion on some fallow ground to the north of the mall.  The ERN agreement between City Hall and Madison Marquette would lock out any other developer from making proposals for the site.  After the City Council granted the ERN, Madison Marquette, with its portfolio of 23 million square feet of prime retail real estate holdings, has severely curtailed spending on Emeryville schools.  Since 2009 they have only given $5000 or less per year.  Wareham Development's donations to the schools has dropped precipitously from the years when they were asking permission to build several major projects in Emeryville from 2008 to 2011. During those years Wareham gave $60,000 to as much as $87,500.  Last year Wareham gave just $15,000.   Emeryville's Novartis Diagnostics, a major bio tech corporation at $58 billion in US revenue last year alone hasn't needed anything recently from City Hall, no request for permission to expand their campus or any other favors and so they haven't donated anything at all to Emeryville's schools.

Cyclists Given a Fighting Chance

Committee Makes Definitive Vote: YES To Bikes On Horton Street

Emeryville's increasingly dangerous main bicycle route won a rare victory last night, when a city advisory board unanimously adopted measures aimed at limiting the surging number of motor vehicles using the road.
The vote came in defiance of Emeryville's largest property owner, San Rafael-based Wareham Development Co., and one of the city's most important employers---Swiss Pharmaceutical behemoth Novartis.
Members of the city's Bicycle-Pedestrian Advisory Committee unanimously adopted a proposal that reduces the speed limit on the city's so-called 'bicycle boulevard' to 20 miles per hour and also forbids more than 3,000 motor vehicles from driving on it per day. If traffic exceeds that level, a series of speed bumps or other measures to discourage motor vehicles would be installed.
The 'bike boulevard' consists of Overland and Horton Streets from 65th to 40th. It connects with bike routes in Oakland in the south and a bike lane that leads to a bike path in Berkeley's Aquatic Park.
The most heated part of the committee vote was one defining exactly what a 'bike boulevard' is. Several years ago the city council chose to erase bicycle lanes already along the streets and designate the route a 'bicycle boulevard.' However, the council never bothered to define the term.
Bicyclists, who 20 years ago could ride just about anywhere in a then, largely industrial Emeryville now compete for road space with all the traffic generated by the city's big-box retail boom. Frequent close calls and even road rage are becoming more common.
After years of complaints about growing dangers faced by people choosing to walk or ride a bicycle in Emeryville, the council commissioned a new $200,000 bicycle/pedestrian plan from Alta Planning, a Berkeley consulting firm. But the report brought sharp condemnation from both Wareham and Novartis.

Wareham's Emery Station East: This and other Wareham
developments on Horton Street have added substantially
to the 4600 cars per day.

In a sharply worded letter to the city, Wareham reiterated previous proclamations that cyclists don't belong on Horton Street and instead should be relegated to an non-existent street west of its property along the Union Pacific Railroad tracks.  Geoff Sears, representing Wareham said the plan would "negatively impact" cars commuting to proposed new office buildings including the council approved 'Transit Center' on Horton Street.   According to Mr. Sears, cars and trucks need unimpeded access along the entire length of Horton Street to access Wareham property and that cyclists would hamper such access.
In an April 4th letter, Mr. Sears complained that the 'bike boulevard' plan was too friendly to bikes and was written from a "bicycles only" perspective.  The letter also reminds city officials that Wareham is the single largest property owner in the area and warned that Wareham's operations would be at risk if Horton Street were a bike boulevard.
Novartis also wrote a letter to the city complaining that they need more cars on Horton Street.

The plan developed by Alta and approved by the committee calls for traffic calming measures to be employed if vehicle speeds regularly exceed 20 MPH or if volumes rise above 3000 trips per day.  No specific traffic calming measures were adopted by the committee Tuesday but they generally range from side walk intersection 'bulb outs' to traffic diverters.

City traffic counts show vehicle traffic on Horton Street is already over 3000 trips per day along much of the boulevard and that it spikes to more than 4600 per day near Wareham's developments.  The 'Transit Center', an office tower proposed for the vacant lot to the north of the Amtrak station will bring many more cars onto the street.

Monday's committee vote makes the third time the body recommended traffic calming measures.  Twice before, the city has moved against the bike committee; once at the transportation committee level and once by the city council.  The newest vote for bike safety on Horton Street also could be crushed by the transportation committee or the city council in upcoming decisions.
However, Monday's vote carried more weight than previous ones because it supports a new $200,000 document commissioned and paid for by the city.

Emeryville's Assessed Valuation Percentage Dropping

New School Bond Possibly In Jeopardy:

Emeryille Corporations All Say They're Not Worth Much

Emeryville businesses spend a lot of effort to tell people how valuable they are and about how they contribute to our town especially when they want something from the taxpayers but recently they've begun playing a different tune; now they're busy devaluing their businesses, saying they're not really worth all that much after all.  When it comes time to pony up the taxes, suddenly it seems Emeryville's much touted mighty business force is sort of anaemic and sickly.

Seen better days: now they're worth

$90 million less.

The Alameda County Appeals Board has been receiving many requests from Emeryville businesses for significant reductions in the assessed value of their properties according to a report from City Hall.  The report is alarming in the depth of the devaluation being claimed.   Councilwoman Jennifer West noted with some concern, "Every year there are appeals to the County for reductions, but this year the percentage has definitely gone up".  Emeryville, it should be noted must continue to show at least a 4% growth in assessed valuation city-wide or the newly issued Measure J school bonds are in grave danger.

The average appeal rate this year is 25% according to Ms West but some businesses are claiming a much greater loss of value.  Hardage Hotels, owners of the Woodfin claims a 41% reduction on property the county says is worth $42 million making approximately a $20 million contested discrepancy.  Hilton Hotel claims a 54% reduction in value.  Even Disney Pixar with its string of Oscar rated films including tonight's 'Toy Story 3' is claiming a sizable loss in value.

The problem it would seem is that there's no downside for corporations to claim a loss in value; something Ms West noted, "There's no incentive to not appeal these taxes" as she puts it.

Wareham's proposed 'Transit Center':  Even with the approval

to build, they claim their value has dropped $124 million.

It remains to be seen how much reduced value Alameda County will grant these businesses but it should be noted that Emeryville will receive significantly less tax on these properties in future years if these appeals succeed.  Further, the payback of the $95 million Measure J school bond passed by voters last November would dramatically increase if Emeryville's aggregate assessed valuation dips below 4%.  In that case, taxpayers will be on the hook for much more money spread over more time.  If the assessed value stays above 4%, the best case scenario,  then the payback amount for the $95 million bond would be nearly $400 million over 50 years.

Novartis campus: almost worthless.
Brother, can you spare a dime?

Pixar has requested an assessed valuation reduction of $94 million while the report assumes a $30 million reduction based on their stated 2011-2012 revenue.  Novartis requests a $211 million reduction with a $58 million assumption from revenue and Wareham Development requests $124 million with a $41 million assumption from revenue.

The February 15 letter accompanying the report from Emeryville's Chief Financial Officer, Karan Reid noted that as a result of the businesses assessments downward adjustments anticipated, the amount of tax allocation bonds the city could issue has "decreased dramatically".

Emeryville Hilton:  chicken feed...
decidedly down market.

  The report can be viewed here:

http://emeryville.granicus.com/GeneratedAgendaViewer.php?view_id=2&event_id=39

Novartis Set To Expand

Re-Printed from the San Francisco Business Times:

As Novartis hires, construction could follow

San Francisco Business Times - by Ron Leuty

• Ron Leuty
• Reporter
• Email: rleuty@bizjournals.com

Novartis Vaccines & Diagnostics is smaller than the old Chiron Corp., but it is set to grow.

Whether that growth leads to action construction at the Swiss company’s Emeryville diagnostics hub is a good question, but there are encouraging signs.

Novartis has added 200 jobs in Emeryville over the past two years. It is set, I note in a story in this week’s print edition, to build off the blood-screening franchise Novartis bought five years ago in its $5.4 billion acquisition of Chiron.

What’s more, an infectious diseae group under the banner of Novartis Institutes for BioMedical Research will have about 150 people — new hires and transfers from its current home of Cambridge, Mass. — when it gets all settled in at Emeryville by the end of 2012.

There are reasons to believe this growth under Peter Maag, president of Novartis Diagnostics and Emeryville site head, could translate into physical expansion.

For one, Oakland’s enterprise zone, which gives companies credits for hiring and on sales and use taxes and increased expense deduction for certain depreciable property, includes the Novartis campus.

Plus, Novartis last month filed an application with the City of Emeryville to demolish an aging, five-story lab and office building at the corner of Chiron Way and 53rd Street, said Charles S. Bryant, Emeryville’s director of planning and building.

Right now, Bryant said, the plan is to replace the building with a small surface parking lot and a whole lot of greenspace. But as Novartis continues to grow, construction instead of demolition crews may call the campus home.

Enlarge Image

SFBT photo by Spencer Brown.

Novartis Diagnostics President Peter Maag, flanked by Eric Whitters (left), global head of research, and Daniel Parera, global head of development.

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Email Ron Leuty: rleuty@bizjournals.com / Twitter: rleuty_biotech

Read more: As Novartis hires, construction could follow | San Francisco Business Times