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Friday, September 18, 2015

Emeryville's Bogus Small Business Bonus Point System

Forget the Bonus Points: 
Small Business 'Bonuses' Should be in the Form of Free or Reduced Rent Paid by the Developers

News Analysis/Opinion
Arguably one of the most important pieces in the livability puzzle for a town is the idea that small locally serving businesses should be attracted and retained as an amenity for residents.  It's a subject near and dear to almost everyone in Emeryville as revealed in many public resident surveys.  That virtually everyone seems to want small locally serving business, especially retail, is equally remarkable as the fact that Emeryville always seems to be lacking in this department.  City Hall (or the free market) can't seem to deliver what everyone wants; it's a conundrum and a would be untenable condition in a democratic polity such as ours.  And yet still we wait for our non-formula independent bookstores or corner green grocers and the like.  Meanwhile the stuff we don't want, the formula chain stores and fast food restaurants proliferate in Emeryville.
What's needed is a legal contract that developers can't wriggle out of.  They're the ones who should be responsible for bringing us our locally serving retail.

This is Emeryville:
East Bay Bridge Mall
Low slung suburban style, baking asphalt.
Before the Planning Department came up
with the 'bonus point system', left to their 

own devices, this is what developers 
felt comfortable building
in Emeryville.
So it is probable there are hidden reasons why residents must go on waiting to get the kind of retail they want to see.  More on that later.
For now, let's take it as a given that people should get the town they want (as long as the law is obeyed).  It should be simply a matter of creating municipal policy for us getting what we want.  We'll chalk up this strange Emeryville disconnect to some kind of miscommunication for now.

As the City Council argues for how to attract and retain these small businesses we want by use of the Planning Department's 'bonus point system' as they have been of late,  now would be a good time to consider new more effective ways to go about this.

Historically in Emeryville, City Hall offered essentially nothing by way of intervention in the development of the town in attempt to steer developers to deliver any specific kind of retail.   What we got as a result is what the developers wanted to produce.  That hands off model brought to Emeryville the 1990's suburban style malls, notable at East Bay Bridge Center and the Powell Street Plaza; decidedly not what residents say they want.

This is Emeryville:
Powell Street Plaza 
The heart of Emeryville, regional shopping center.
Lots of parking and lots of formula chain retail.
1990's, this is what developers wanted to build but 
not what Emeryville residents wanted.
Later, as Emeryville land became more valuable, the Council directed the Planning Department to be more interventionist and the current 'bonus system' was invented.  This new system, still hands off in its demeanor, gives developers more rights to build denser and taller (and more profitable) projects that would normally be allowed so long as they include certain things the Council says they want.  In the case of their small business desires, especially in the retail field, the Council designed a fee idea where developers could pay into a small business fund at City Hall if they choose to get their bonus points.  City Hall then dispersed these fund monies to small businesses in the form of the Facade Improvement Program, the Paint Program and such.  The bonus system may have made Emeryville's small businesses look better but it has had little effect in achieving the desired results for attracting locally serving non formula retail as we have seen and as the Tattler has chronicled.

Now, the Council is looking to upgrade the bonus system by giving developers 10 bonus points to developers for every 1% of project construction valuation up to a maximum of 50%.  The idea is to funnel more money into City Hall's small business fund.
We think this idea is fundamentally flawed and it will not deliver the kinds of small business residents say they want.

This is Emeryville:
Bay Street Mall, Anytown USA

Emeryville's 'bonus point system' brings this
kind of development; the Gap and Old Navy.
Denser and more urban but still nothing but
major formula chain stores.
Emeryville residents don't go here.

We're still waiting for our locally serving retail.
The Tattler has long urged the City Council to take up this cause and in their defense, they did try an experimental approach with the Promenade Project on San Pablo Avenue back some years ago.  That shopping center was slated to become just another strip mall with formula fast food except Councilman John Fricke proposed the City directly intervene in the rental process in the newly built mall and offer reduced rent to desirable businesses by subsidy from the taxpayers.  That is how Arizmendi Bakery was able to afford the rent there.  Now, incidentally, Arizmendi is a success and making it on their own, the City subsidies having long since ended.
But the problem with the City subsidies is that City Hall is ill suited to getting into the commercial landlord business.  It's better to let the private sector do that.

Clearly, the way to get the type of retail and other small business we want is to get the developers, the ones with the expertise and the money, to do it.  Up until now, it's all been by verbal agreement.  And that's where the breakdown occurs.  The developers invariably tell the City they also want these locally serving non formula business renting the street front stores associated with their (usually residential) development proposals.  The developers tell us they also want what Emeryville residents want before their project is approved.  They assure the Council they'll work in good faith to secure leases for locally serving retail for their projects.
We all know how that's been working out.
The business that end up signing leases in the new store fronts are formula retail chains and fast food (because of the high rents associated with new construction).  Perhaps even worse, the store fronts sit empty for years because the (residential) developer isn't interested in playing commercial landlord, the store fronts having been provided by them as a condition for approval from the City.
This Could Be Emeryville:
Locally Serving Non Formula Retail

The only way Emeryville can get this is if the City
gets it in writing from the developers
before it approves the project.

The only realistic way to deliver locally serving non formula retail and other small business that Emeryville residents want is simply to require developers to guarantee in writing this will happen.  The resultant low rent receipts can be written off by the developer as a cost of doing business in Emeryville.  Like everything else, it needs to be in the form of a written contract, not a verbal agreement that has no force of law.  Rather than relying on some arcane or byzantine point system that isn't delivering the goods, Emeryville simply has to start demanding developers deliver what they say they will when it comes to small locally serving retail.


  1. As a small business owner in Emeryville, please do not encourage this route. The last thing we need is the city council meddling more in local business. They've done enough damage already. You cannot mandate what the people want, what they will buy, and where they will shop.

    Retail storefronts do not sit empty because the building owners hate receiving more rent. They sit empty because developers were forced to build things business owners don't want and aren't willing to pay for. Businesses do not want or need more retail storefronts in Emeryville. That's why so much of it is sitting empty. There is a large supply and little demand.

    If you want a community that has lots of small, locally owned shops, do not try to mandate it from city hall. It has the exact opposite effect:

    Us business owners like, above all other things, predictability. We invest huge amounts of our own money, time, and passion based on what we predict will happen over the next 10 or more years. We risk everything based on a guess.

    When City Hall is jerking us around by raising the minimum wage 60% overnight, concocting sick leave policies, crushing planned development, and deciding to give the restaurant down the street from us free rent and subsidies, all of our planning and hard work are out the window.

    The damage city hall did to bringing small, locally owned business to Emeryville this year can't be understated. It's not just having the highest minimum wage in the country, it's the way the city did it (no notice, far too fast, and with an apparent antagonism to the small business community). The message this sent to us was loud and clear: "If you open a business in Emeryville, all of your hard work and money can be lost on the whim of three people who don't understand or care about local business."

    If city hall wants to help small, local businesses in Emeryville (and it's pretty clear they don't), here are some suggestions:

    1. Listen to us when we tell you that you're hurting us
    2. Fix the minimum wage and sick leave fiasco you created a couple months ago
    3. Allow developers to build what the market wants (and which all of us were expecting would be built when we decided to sign a lease here).
    4. Reduce some of the outlandish fees and requirements the city imposes (as an example, try putting up a sign advertising your small business in the city and watch how much "help and support" (gigantic fees) the city "provides" you)
    5. Hire enough city staff to complete the projects that have already been approved but are not progressing (for example, the Greenway)
    6. Require at least one City Council member to attend EVERY committee meeting, listen at those meetings, and give the committees enough power (by following their advice most of the time) to make it worthwhile for volunteers to serve on them
    7. Have the City support an organization like the Chamber of Commerce whose job it is to support locally serving businesses. Use that organization to listen to the needs of small business rather than fighting them at every turn
    8. Avoid projects like the Promenade where the city spent hundred of thousands of dollars trying to promote a single, problematic business concept instead of promoting the business community across the city as a whole.
    9. Provide and fund programs that encourage residents to shop locally
    10. Stop discouraging local manufacturing, restaurants, and service businesses (see #2) and driving out entry level workers and low-wage residents

    And, if this is too much to ask, then please ask city council to consider doing just this one thing:

    Stop trying to reshape Emeryville to your personal preferences overnight. You are killing us.

    1. Another comment from the 'government is bad' crew. These bromides they supply are always good for a few laughs and I do appreciate today's entree from you sir. Entertaining as this is for me, I'm not sure how to respond tonight. Do I start by explaining why government is a tempering and existentially necessary force in the building of civilization and that without it civilization crumbles? Do I start at the beginning and drop the use of sarcasm or snark like I would when explaining this to a young child? That seems tedious to me right now so I guess I'll simply pull out a few delectable morsels:

      "You [the government] cannot mandate what the people want" - well, sorry to inform you but yes, that's exactly what government does; people want things and the government makes it happen. You are to be commended for your terse precision, arguing for your 'government is bad' side with this statement sir.

      "When City Hall is jerking us around by ...deciding to give the restaurant down the street from us free rent and subsidies, all of our planning and hard work are out the window" - Love it! I'm reveling in the schadenfreude of that. It's a bunch of sour grapes wrapped in a nonsensical but fun homily.

      "There is a large supply and little demand [of retail]" - That's a neat trick: Only the market knows what people want. People don't really know what they want. All these ignoramus Emeryville residents should stop kvetching about what they want...anything other than what they have is by definition calling into question the infallible market and the glorious overlay of 'supply and demand'. You complainers must be communists.

      And then there's your peans to mutual exclusivity peppered throughout your wondrous collection of aphorisms: government is incompetent and unacceptable but we business owners want lots of sweet sweet nectar in the form of government handouts and services.

      All in all, a very entertaining sop. Thanks! And please feel free to comment some more.

  2. OK, I own a small business in Emeryville and while I wouldn't go as far as the previous post and don't agree with many things in it, I do agree strongly that rising rents are only one factor driving small businesses out of this city. The MWO is definitely another. I personally believe that a flourishing small business community is an essential ingredient of a livable city. And the current City Council is doing nothing to better understand and support the needs of existing small businesses or to attract new small businesses.Those who want to help low income workers (a goal I agree with) by raising the minimum wage need to understand how vulnerable small businesses are--particularly to large, sudden increases in labor cost--and appreciate what an important source of jobs for low wage workers small businesses are. Too many people think of the minimum wage issue as business owners (whom they assume could pay higher wages if they wanted to) against workers (whom they assume will have the same job, the same amount of work and simply make more). To truly help low wage earners as a group the minimum wage needs to be increased at a rate that doesn't kill employment. Current increases in the minimum wage locally and across the nation are of a greater magnitude and over a shorter period of time than ever before and are a huge experiment. Two aspirin make you better, 20 aspirin make you very, very sick. I think my business can adjust to a $12.25 minimum--particularly since I am currently on an even playing field with Oakland businesses--and I support it. Whether it can weather all the future scheduled increases I do not know. I hope that data can be collected and analysed objectively as we move forward to see exactly what the effects are for business and for low wage workers as a group (not just a redistribution leaving some workers better off and others worse). The City Council's single minded goal to get to the highest minimum wage in the country before anyone else without pausing to solicit input from business and the public, sent a clear message that Emeryville is not a good place for small business and tinkering with the bonus point system isn't going to reverse that.

    1. You're currently on a level playing field with Oakland I understand. And when Oakland raises its minimum wage next year you'll still be on a level playing field. Same with Berkeley, they're raising their minimum wage to exactly match Emeryville's starting next year as well. So it looks like you're going to stay on that level playing field. Neighboring cities are raising their minimum wages to meet Emeryville....the so called regional minimum wage. That should make you happy, right?

    2. If you're suggesting Emeryville adopted a "regional" minimum wage based on the one year we will overlap with Oakland or speculation of what the other cities will do … than you’re lying to your readers (again) and lying to yourself. In 2019 Emeryville small businesses will be at $16 and Oakland will be at the MIT defined “Living Wage” (not Emeryville’s arbitrarily defined

      The only thing good to come out of this discussion is apparently you are finally responding to pressure to allow critical comments through your blog (I guess we owe the E-ville Eye a thank you for that). Brian, I know you and the council majority are all artists, lecturers and such, but surely you were required to take an Econ 101 class. Throwing a few months of subsidized rent in is akin to a mobile carrier discounting the price of your phone to lock you into a multi-year contract. It might help you in the short term, but ultimately your still paying for the phone through inflated costs elsewhere.

    3. There's no lie from me here. Please show us where there's ever been a lie from the Tattler. If there is any false information you can prove, there will be a retraction.

      Obviously, your definition of a regional minimum wage is different than what most people say it is. You're positing it is an immovable thing that locks cities into a set amount, never to ever change ever again (for a city to ever change the wage it would mean a deviation from the regional wage lock). Under your definition, everybody would be locked into the $1.25 the wage started at in the 1960's.

      Emeryville's number is not arbitrary; it's based on what a person working full time in the Bay Area would have to make to not be eligible for government assistance.

      I've always posted all comments from day one in the Tattler (except those that engage in personal attacks). And just so you know, this canard of yours is not Rob approved; Rob doesn't want his minions going around saying the Tattler will post critical comments...You are not on board with the Rob mob. You'd better check in with your paymaster about this...he won't be happy.

      The rent subsidy is not for a few months...what gave you that idea? These developers will be on the hook for making sure that the approved list of locally serving retail stores are there in perpetuity. That's the whole idea. It's a new cost of doing business in Emeryville.

      Remember, before you shoot back with an inane 'supply and demand' or other such right wing trope, Emeryville gets nothing from residential projects. They are revenue neutral for City in NO MONEY. You tell me why, given that, we should accept without negotiating what these profit seeking developers want to build? If we don't legally have to accept a flawed project, why should we? These developers have to be made to not make our town worse when they build their projects. They're welcome here but they're not going to leave a worse town. Got that?

  3. I love how you encourage feedback and intelligent discourse through mutual respect. It's always a pleasure. While this may be a surprise, intellectually defensible positions can be maintained without retreating to Trump-esque belligerence and arrogance. On the other hand, intellectually indefensible positions require quite a bit of both.

    With that in mind, I reiterate that the government's job is not to force people to want what you want. People in a free society have goals and desires that have nothing to do with you or their government. These goals appear in a free market as 'demand'. (Argh, yes, a word from "economics", that evil and treacherous reality that explains the black art of business.)

    Businesses like to try to meet that demand, because when they do, they can stay in business. In other words, businesses work really hard and take risks to try to give people what they want. This creates the wonderful effect of harnessing self-interest to improve society. And, rather than making the world into what you personally want (which I realize would be nice for you), the economy responds to everyone.

    Your blog entry was ostensibly about trying to improve the situation for small, locally serving businesses so as to attract more of them here. I realize now that was too good to be true.

    You mention that these small, locally serving businesses want "lots of sweet sweet nectar in the form of government handouts and services". Actually, you are confusing your blog entry with my comment. If you'll recall, you stated you wanted the government to give free handouts to businesses in the form of free rent.

    My point was the exact opposite. Small businesses don't want handouts and services. We want the city to stop destroying any chance we have to survive, any chance our employees have to keep their jobs, and any chance the community has to have a unique character.

    Everything suggested above (minus funding a "shop local" campaign which I happily retract) is not about asking the City to hand out any 'sweet sweet nectar'. It's about asking the city to STOP doing things.

    We want the city to provide the service of "not-killing-us" and the handout of "not-making-it-impossible-to-operate-here".

    I realize I fell for your canard. You actually had no interest in bringing small, locally serving business to Emeryville.

    What a fool I am. I made the same mistake with the current city council.

    1. Respect is earned.

      Sorry, you're incorrect about the government's job (again). It IS to force people to do what I want (presuming I'm in the majority and they, the government, doesn't break the law).

      The market is not always rational because people aren't always rational (and because it requires absolute free flow of accurate information...not possible)

      I don't want the government to give free handouts in the form of free or reduced rent. I said as much in the story. I want the government to force developers to provide that.

      Businesses DO want free handouts because people want free handouts. If you say you don't, you're an outlier.

      You're on a level playing field with your fellow business owners in Emeryville. If you say you can't cut it, well then you're doing something wrong and the market will make it's judgement on you and down you go.
      That's the free market. If I were you I'd try for some of that sweet sweet nectar.

    2. Respect is given.

      I think you nailed your own position quite clearly, and I will leave it hanging there for others to judge.

  4. Anonymous-
    Thank you for your perspective. It's good to see both sides of an issue and to see how changes and policies effect the real world. Your mistake was assuming this place is anything other than Brian's Bully Pulpit. Other views are not respected here. Quite the opposite. This is not the place for adult conversation.

    1. Ideas meriting respect receive it from me. It's a meritocracy here, something right wingers claim to like.

  5. Brian, out of curiosity, on a scale of 1 (moronic) to 10 (genius), what merit would you assign to your own ideas on average? It would be helpful to know what level of respect we should give them.

    1. Let's see how your ideas stack up. What do you think the answer to your own question is?

  6. Nice dodge. I'll give that answer a seven.

    Respect for ideas that are contrary to his own is the only protection a man has against ignorance.

    I believe that one man can't accurately judge the merit of a community's ideas and even certainly not the merit of his own. Anyone who thinks he is the ideal arbiter of the merit of a community of thought has greatly overestimated himself.

    On this answer, I give myself a five and a half.

    But, you stated that you are creating a meritocracy, that you can evaluate the merit of the ideas of everyone who posts here, and that you can dole out respect accordingly. So coming back to the original question, on a scale of 1 to 10 what merit do you assign your own ideas?

    1. I don't use your numerical metrics. But I stand by my statement that this is a meritocracy here vis a vis garnering respect from me. Those comments I don't respect on their merits, I don't respect. The only ones I respect are those that I deem worthy. Having said that (again), you should know every comment barring those that engage in personal attacks, will be allowed and posted here at the Tattler. The one exception: personal attacks against me will be permitted.

  7. You define merit as "to be deemed worthy" by you. Let's call this "Brian-merit" since it differs greatly from the commonly understood definition of "merit" as being something intrinsic.

    By definition, you deem things worthy if they have Brian-merit and things have Brian-merit if you deem them worthy. Since you only respect things that have Brian-merit, you are free to be disrespectful to anything you disagree with. That seems consistent with what we have all observed, so I don't question that you are being truthful about your position.

    Let's say, just for argument's sake, you hold an incorrect position. You believe that the earth is flat. Along comes an astronomer who tries to convince you the earth is round. Because you hold your position strongly (as you hold most positions), this person lacks Brian-merit and should be disrespected. Does this not both increase the ease with which you can dismiss the idea of a round earth and simultaneously decrease the likelihood that the astronomer will persist in trying to correct your errant belief?

    As a result, doesn't this approach, the more you practice it, decrease the likelihood that you will hold intelligent positions? Wouldn't it be better to entertain ideas that contradict your own for the purpose of discussion and treat their holder with respect on the off-chance that there is some enlightenment to be gained?

    Should every conversation be nothing more than a missed opportunity to learn something?

  8. I remember when the Tattler used to be an alternative voice in the city. It was kinda cool then. Now it just seems like you nod your head with whatever the council says. What happened man?

    1. We're being just a little dickish tonight, aren't we?
      This blog has always been on the resident's side in the push and pull of Emeryville politics (the other side being the business community, especially the developers). I can smell the disingenuousness from you here. I know you never thought the Tattler was 'kinda cool' because I can tell who's side you're on and this is a tactic of yours. But that's fine...It's OK that there are supporters of the business community...after all, they're the necessary other half. I nod my head whenever the Council engages in public policy in the public interest. And just so you know, back when the Tattler was 'kinda cool', the City Council engaged in public policy in the business community's interest. That's what happened, man.