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.

Emeryville History 2004-2014: City Hall in the Tank for Pixar

OOOPS!  Ten years later, the hyperbole is revealed to be.....hyperbole.

Here's City Manager John Flores, in 2004 in the tank for Pixar as that company sought voter approval for a major campus expansion.  The Tattler has shown how the pitch from Pixar (and City Hall) for Measures T & U were vastly overstated including how Pixar was going to benefit the schools and the community. But what we got for our permission to vastly increase their campus instead is a giant corporate tax cheat and no money for the schools coming forth from the fenced off and secretive private Pixar compound.

In addition to giving credence to the absurd claim that Pixar would flee Emeryville unless it got everything it wanted (and write off its billion dollar initial investment), Mr Flores, supposedly representing our interests, tells us that Pixar would be a "major benefactor to the Emeryville community including the schools".
Pixar for its part, told voters in 2004 that they (Pixar) would tremendously benefit the Emeryville community but instead of putting that in writing as the T&U opposition wanted, they should simply be taken at their word.
And the rest is history as they say.

Video from the Emeryville Property Owners Association

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.

Emeryville Residents Warned of Mass Exodus of Business

Businesses: "Unless We Get Everything We Want We're Taking Our Marbles and Leaving"

City Hall: "We Have to Do What Business Says or All Will Be Lost"

Opinion/News Analysis
The record is stuck.  Can somebody move the needle forward?  It keeps repeating itself.
What we refer to is the oft repeated mantra heard year in and year out at City Hall; the call and response followed by the familiar hijacking of public policy for private gain.  It's the old stand-by warning from developers and businesses that they'll....wait for it....pack up and leave unless they get everything they want on whatever relevant proposal is being discussed at City Hall.  The conciliatory reaction always comes from Councilwoman Nora Davis with a second from Councilman Kurt Brinkman; we have to do what developer X says is their response.  Emeryville is in no position to ask for anything good they remind us.  With Councilwoman Ruth Atkin as their third vote, it's been a highly effective formula for delivering the goods to developers and business in Emeryville.  This reputation of ours is earned.

Emeryville: Charter City
The old formula is going to repeat itself this summer.  As concerned Emeryville citizens begin their signature drive to put the proposal before voters that Emeryville become a Charter City on November's ballot, a new paradigm that will permit us to tax businesses like other Bay Area cities do, the Chamber of Commerce will once again join forces with the deep pockets in the corporate community to try to defeat it.  No new parks for us and sidewalk repair must wait, you understand.

We can hear it now, loudly proclaimed, nay screamed this summer and fall: all will be lost if Emeryville becomes a Charter City.  It's going to be in our mailboxes in torrents of professionally designed glossy color flyers.  It's going to be on our answering machines after we come home from work, warning us of the coming apocalypse.  Our dinners will be interrupted this fall; poorly paid young men and women from places other than Emeryville will be warning us in 7:00 PM phone calls.  You may be able to ignore the phone calls but your door will be incessantly knocked on as well.  Behind the door will be an Oakland resident or a Hayward resident telling you how bad it'll be if the Charter City Initiative passes and Emeryville taxes business like other cities do.  They won't tell you they're not from Emeryville and they won't tell you they're being paid to knock on your door and make phone calls but they will assure you they only have your interests at heart.

These well funded scare campaigns rise up every time business is asked to pay their fair share in Emeryville.

We remember the card room plebiscite of 1997, a tax increase for Emeryville gambling parlors where in the Oaks Club, the only such parlor, would be "driven to bankruptcy" we were told if they were required to pay the Bay Area card room average tax rate.  It passed of course, and the Oaks Club is doing just fine....but now paying Emeryville what other card rooms in the Bay Area pay.

Then there was the recent attempt to remove Emeryville's infamous business tax cap, a mechanism that allows Pixar and other large businesses to pay much less taxes than other smaller businesses in town pay.  That voter drive was sabotaged before it even got to the ballot box thanks to Council members Nora Davis and Kurt Brinkman.  It would be the end of Emeryville they assured us after Pixar threatened to leave town if Emeryville voters were allowed to decide about the tax cap.

Of course there was also Measures T & U, a 2004 campaign to get a Community Benefits Agreement in trade for a planned Pixar campus expansion. A YES vote would negate the CBA, give Pixar millions in Emeryville subsidies in cash and property transfers and negate our General Plan and zoning regulations.  Again Pixar was going to leave Emeryville the Chamber of Commerce assured us (right after they spent tens of millions of dollars on their Phase One campus build out).  The NO on T&U simply asked for a Community Benefits Agreement to be entered into, a standard procedure for City Halls outside Emeryville.  But Pixar told us it was an existential threat.  It was a scare tactic that worked; Emeryville rolled over with prompting from Nora Davis, Kurt Brinkman and the Chamber of Commerce, netting Pixar millions of dollars in City Hall subsidies.
It should be noted Pixar, the multi-billion dollar corporation is now paying us $8000 per year in taxes (thanks to the tax cap) the Tattler found out.

We also fondly remember the anti-Measure C campaign of 2005.  It was a lavishly funded campaign to stop Measure C, Emeryville's 'Living Wage for Hotel Workers' ballot initiative.  The campaign, run by Councilwoman Nora Davis and the Chamber of Commerce, assured us all would be lost if Emeryville hotels were forced to pay their workers a couple of dollars more per hour; a living wage. Nora joined with the hotels and scores of other businesses in town to warn us of the dire consequences in store for us.  The Chamber of Commerce even fired up their Political Action Committee (EmPAC) with it's massive war chest of donations from out-of-town businesses to take the fight to the hotel workers.  Hotels would fold up their tents en masse and leave Emeryville we were told.
In the end, Emeryville voters DID pass the living wage for hotel workers, regardless of all the hyperbolic screaming from Nora Davis, the Chamber and their corporate paymasters.
One hotel, Woodfin Suites on Shellmound Street actually did leave town in protest after they lost a bruising court battle to not pay their workers their back wages.  Woodfin was subsequently bought by Hyatt.
The mass exodus of hotels never materialized curiously.  In fact, Emeryville is about to get a brand new hotel, Hyatt Place at Bay Street.  And they're going to pay their workers a living wage.  Tellingly, Nora Davis, her sycophants and the Chamber of Commerce never admitted they were wrong about the consequences of Measure C.
Instead they've begun preparing themselves for the next apocalypse looming this fall for Emeryville.  The Charter City Initiative is coming.  Emeryville voters will be allowed to decide for themselves.  All will be lost people, all will be lost.

Pixar Reins In Emeryville Schools Funding

Pixar Cuts School Funding

Pixar has severely curtailed its corporate support for Emeryville schools over the last two years according to officials at the Emery Education Fund.  The Fund, a local non-profit tasked with shepherding donations to the schools, said  Pixar had for several years held pre-release screenings of its new movies as a fundraiser for the Emery Unified School District. Pixar, now a subsidiary of Disney Inc., discontinued these screenings two years ago, yet it now pre-screens films as charitable benefits for other school districts and non-profits outside of Emeryville.

Brave New World?
Nothing for Emeryville's schools
again this year.

Phillip Powell, Emery Ed Fund's Interim Executive Director told the Tattler the pre-screenings have historically been a large part of the Emery Ed Fund, netting over $100,000 for Emeryville schools in 2010, the last time Pixar cooperated.  "Normally Pixar pre-releases happen in May" Mr Powell said after he acknowledged it appears Emery has been skipped again.  For its part, this year Pixar has offered a charity pre-screening of its new film, Brave for the educational non-profit corporation College Track.  Emery's School Superintendent, Debbra Lindo, sits on the Board of Directors of College Track.

In addition to ending its charitable giving to Emeryville Schools, Pixar is seeking a reduction in how much it owes in property taxes---a large portion of which normally flows into our classrooms.  Reducing the company's tax liability is a goal being sought on various fronts by the company's corporate leaders in Burbank and their brigade of tax attorneys.  City council members have noted that Pixar managed to sharply trim its business taxes that also accrue to Emeryville. Disney/Pixar reported $1.46 billion in profits in the first quarter of this year. Granted, Pixar is now just one division a conglomerate. Disney, which paid about $7 billion for Pixar, was billed a total of $8000 in business taxes on its Emeryville campus and all Pixar operations.  A low tax take for City Hall is courtesy of a cap on business taxes, established thanks to the effective lobbying efforts of the Emeryville Chamber of Commerce. The cap is a massive annual gift to Emeryville's largest companies from City Hall making any profits above the cap tax free.  Its a scheme that enables Pixar to pay Emeryville at a far lower rate than other businesses here, essentially forcing small businesses to subsidize Disney's tax cut

Sadly, Disney/Pixar isn't alone in dialing back its commitment to the community that welcomed them with open arms. Another large firm, Swiss pharmaceutical giant Novartis set up an annual $5000 scholarship to help cover college tuition for science majors graduating from Emery High School.  Novartis donated $100,000 for the scholarship fund in 2006.

Emery was shut out of last year's Pixar film pre-screening, Cars 2.  The Park Avenue corporation instead offered the film as a philanthropic fund raising device elsewhere.

The Walt Disney Corporation bought Pixar in 2006 in an all stock transaction worth $7.4 billion and is said to be worth in excess of $75 billion.

City Falsely Lists Pixar As Major Source Of Revenue

City Punked Again:

City Touts Pixar's Revenue As Animation Giant Outsources Receipts To Burbank

As part of an attempt to gin up support for Emeryville's flagging Redevelopment Agency and carry water for Pixar, the city's e-newsletter website recently listed Pixar as a "major" source of sales tax revenue for the city, however at least one council member asserts Pixar claims that it outsourced its sales and ultimately paid only $8000 in taxes to the city last year.

In the wake of the much ballyhooed looming February 1st dissolution of redevelopment agencies state-wide and the flood of negative publicity about what redevelopment has wrought over the years, Emeryville's City Hall has gone on the offensive trying to seize the narrative that the Redevelopment Agency here has been a great source of good, but the city's claims in its January e-newsletter have run headlong into countervailing public reports about Pixar from council member Kurt Brinkman in an August 2011 interview with the Tattler.

Emeryville gets $8000 
and a security fence.

Emeryville's website features a new page highlighting the record of redevelopment in Emeryville and Pixar is listed as a "major" economic redevelopment project that has produced "dramatic results".  Pixar shares top billing in revenue with six other taxpayer funded redevelopment projects that has contributed $25 million to the General Fund according to the city.

Councilman Brinkman complained in the Tattler interview that Pixar has switched its gross receipts accounting to Burbank California, the headquarters for parent company Walt Disney after the city started talking about removing its controversial business tax cap last year, thereby making Pixar's massive profits out-of-bounds for Emeryville.  Mr Brinkman used the clever accounting move by Pixar as reason to not remove the cap. Council member Brinkman reasons that if the cap is in place then Pixar will be encouraged to accurately report sales in Emeryville and the city will collect more in taxes, an eventuality that has not come to pass.

Editorial:

Emeryville seems to like abuse and
Pixar seems to like giving it.
Maybe Pixar and Emeryville
should get a room.

The cap, unprecedented in the Bay Area, formerly limited the taxes for Pixar and other corporations doing business here at $117,000.  Emeryville voters raised the cap last November to $300,000, but it's not expected to effect Pixar after the outsourcing maneuver.  The cap, even at the new raised level forces small business to pay a much higher rate than the largest businesses.

In addition to outsourcing its gross receipts, Pixar lead a successful campaign to lower its assessed property tax, netting them a $108,000 refund last year.

Measure D: The End Game Of Broken Politics

Measure D: Brought To You By The Calculating Cynicism Of Nora Davis (& Kurt Brinkman)

Opinion

In post John LaCoste Emeryville history, the modern era as it were, never has so much cynical political calculating been embodied in one voter initiative as this year's shameful Measure D.  What we have here is the unseemly spectacle of two council members, Nora Davis and Kurt Brinkman swooping in to stop the people of Emeryville from deciding for themselves, the wisdom of continuing a tax cap on the largest businesses, a gift so to speak to the largest corporations and unprecedented in the Bay Area.  

Never mind the arguable prudence of eliminating this regressive cap in this time of harsh budget austerity, these two elected council members have disenfranchised the people of Emeryville.

Earlier in the year, citizens started a petition drive to place this business tax cap on the November ballot.  The city council caught wind of it and they voted 5-0 to place it on the ballot themselves, saving the citizens all the work getting the proper number of signatures.  Nora Davis and Kurt Brinkman, would be populists, voted with their colleagues: the people should be allowed to vote on this cap for themselves they said with their vote.
But that was then.

After this council vote to enfranchise the people, Pixar, an Emeryville corporation that benefits hugely from the tax cap and upset at the prospects of paying the same rate as small business in town,  called secret closed door meetings with city staff and council members.  Something was said to the staff and attending council members...precisely what, we'll never know, but we've got a pretty good idea.

Later, after it was too late for citizens to re-start a petition drive about eliminating the cap, Nora Davis and Kurt Brinkman took it upon themselves to make a motion to void the council's earlier 5-0 vote and make a new vote to raise the business tax cap a little bit but to keep the cap on the books.  The other three council members went along, subverting their earlier vote to let the people decide for themselves. 

And Measure D was born.

This reversal by Nora Davis and Kurt Brinkman, with help from their council colleagues (and cheered on by the Chamber of Commerce) tells us who really matters in Emeryville; it's the large corporations.  And that's what this betrayal to the people says in a loud and clear voice.

So it's to remain high taxes for small business and low taxes for big business in Emeryville and democracy be damned, at least until we overrun the ideologues Nora Davis and Kurt Brinkman.   These two should be taken to task for this outrageous disenfranchisement, Republican in its cynical subversion of the people's interests.  

When your local city council members start acting like the most extreme tea party wing of the Republican Party in Washington, you know you've got a problem in your town.  No one should listen ever again to these two crow about how we need to all tighten our belts and how we'll have to learn to live with less owing to the budget crisis...these two have lost all credibility on that score.

Oakland Tribune: Pixar Will Pay Their Taxes

Oakland Tribune Says Emeryville's Measure C Will Force Pixar To Pay Their Taxes

Opinion

The editorial staff at the Oakland Tribune thinks if Emeryville voters simply pass Measure C on November 8th, Pixar/Disney Corporation will be brought to its knees.  Pass the measure and Pixar will have no choice they say; they'll be flummoxed and confounded.  It'll be a shock and awe of justice rendered by Emeryville voters against the biggest animation studio in the world. 

  

Give us a break.

As for Measure F, the Tribune thinks that only Emeryville can't save money with an outsourced legal department.  Of all the cities in the Bay Area that have outsourced their legal departments, all have saved money.  In Emeryville though, strangely, it'll cost us 71% more... if you believe City Hall and its entrenched bureaucracies, which apparently the editorial staff at the Tribune does.

And Measure D: The Tribune says the city council wisely placed the business tax cap raise on the ballot by rejecting calls to eliminate the cap...obviously the Tribune editorial staff has not been paying attention to Emeryville.  The call to eliminate the tax cap came from THE CITY COUNCIL ITSELF, before they reversed themselves and did Pixar's bidding.

The Oakland Tribune, with its crack Emeryville news division (not) renders its decisions.

It looks like someone in Emeryville has gotten to the editorial staff at the Oakland Tribune (again).

Re-printed from the Oakland Tribune:

Oakland Tribune editorial: Emeryville voters  should pass Measures C, D, reject Measure F Oakland Tribune editorial © Copyright 2011, Bay Area News Group Posted: 10/11/2011 04:00:00 PM PDT Updated: 10/11/2011 06:58:45 PM PDT Emeryville voters will face three measures on their Nov. 8 ballot. We urge support for Measures C and D, which would modestly increase the city's revenues from business license fees. And voters should soundly reject Measure F, a petty and misguided initiative spearheaded by one councilman seeking to force his colleagues to contract out for attorney services. The two business license fee measures would make three key changes to the levies. First, Measure C would increase the tax rate from 0.08 percent of gross receipts to 0.10 percent. That's reasonable when one considers that the neighboring cities of Berkeley and Oakland charge 0.18 percent and 0.12 percent, respectively. Measure C would also change the rules to stop one of the cities biggest businesses, Pixar Studios, from avoiding the tax. After the company was acquired by Disney in 2006, it stopped paying the fee, instead shifting all the receipts to the parent company in Burbank. Pixar should be paying its fair share like all other businesses. Measure D would raise the cap on the tax from the current $117,000 to $300,000 a year. The change is expected to affect three businesses, Pixar, Novartis and LeapFrog. The City Council, when placing the measure on the ballot, wisely rejected calls to eliminate the cap to match Berkeley and Oakland. We are not anxious to see new business taxes in these tough financial times. But we feel the changes are reasonable and that the city has taken other belt-tightening steps. It has trimmed its budget by about 10 percent and, unlike many cities, required its employees to pay their full share of their pensions contributions. It has also reduced pension benefits, and city costs, for new employees. At the same time, voters should oppose Measure F, the misguided initiative spearheaded by Councilman Ken Bukowski. It's clear to us that Bukowski, who at times has been ethically challenged, is now unhappy with the city attorney and other members of the City Council who have questioned his behavior. Bukowski seems to forget that the city attorney is accountable to the entire council, not just to him. Unable to get the answers and cooperation he wants from the city attorney, Bukowski is trying to eliminate the lawyer's job by proposing Measure F, which would force the city to contract out for legal services. Worse, Bukowski wants to make the city attorney accountable to the city manager, not to the council. That's absurd. A city attorney must be directly accountable to the council to serve as a check on the city manager. Bukowski offers no evidence for his claim that Measure F would save money. And, as we have witnessed in other East Bay communities, there is no evidence that contracting for city attorney services provides better advice. Voters should reject this ridiculous idea. emeryville: measures c, d, f

Council Treachery On Business Tax Cap

Councilman Kurt Brinkman on business tax 

council double-cross:

"NO COMMENT"

The city council promised to let the people decide on the November ballot about our big business friendly tax cap but then reneged after they killed a grassroots citizen drive to rescind the unfair tax cap.  The council has taken away the people's right to decide for themselves about this corporate give-a-way tax scheme.

Kurt Brinkman:
Emeryville citizens
must not be allowed
to vote on this.

On July 19th, Council members Kurt Brinkman and Nora Davis convinced their colleagues to reverse a unanimous council vote made in May, to allow Emeryville citizens to decide for themselves about the infamous business tax cap.  The cap, a codified limit that means the most companies pay in tax annually to the city is $117,000 or .08% on the maximum gross receipts of $146 million, is unprecedented in the Bay Area and leaves the smaller businesses in town on the hook for a much higher rate.

The previous unanimous council vote on May 17th, stopped an incipient citizen's petition drive to get the issue before Emeryville voters in November lead by Emeryville resident Scott Donahue and others.  Mr Donahue noted after the unanimous council vote, that because the council had agreed to take up the cause and place the issue on the ballot by fiat, there was no need to continue with the citizen's petition and he withdrew the petition drive.  However, two months later when it was too late to restart the petition drive, Mr Brinkman and Ms Davis moved to reverse the previous council decision and disenfranchise the citizens in November.

Nora Davis (undated photo):
Glad to have derailed
the citizen's drive to 

rescind the tax cap.

Council members Brinkman and Davis never explained publicly why they reversed themselves and why they took away the citizens right to decide for themselves.  Councilman Kurt Brinkman sat down with the Tattler recently to tell his side:

Tattler:  Why do you think it's important for Emeryville to keep the business tax cap?

Brinkman: "Like it or not, businesses shift revenue to avoid taxes.  It happens all the time.  From a revenue standpoint, if we were to get rid of the cap entirely, we might lose everything".

Tattler:  Meaning these corporations might be incensed by such a move and seek their revenge by ordering their accountants to show no taxable Emeryville income?

Brinkman:  "It could happen".

Tattler:  Nevertheless, Emeryville is the only city in the Bay Area with a tax cap on business.  Additionally, the tax rate for receipts under the cap and subject to levy is lower than its neighbors.  If you're concerned about scaring away business, why can't we raise revenue like every other city by getting rid of the cap and then simply keep the tax rate (now at .08%) lower than our neighbors?  Can't we have a low flat rate for everybody and attract and retain business?

Brinkman:  "It's important to separate from other cities.  We need to make sure Emeryville remains a marketable, viable city"

Tattler:  Right now the business tax cap only effects two or three businesses, Pixar especially.  Aren't you concerned that Pixar pays such a pittance with the cap, essentially a much lower tax rate than other businesses in town?

Brinkman:  "Well, if we got rid of the cap it would really have no effect on Pixar, they only paid $8000 last year to Emeryville".

Tattler:  So to protect $8000 from Pixar, you're going to keep this regressive cap in effect?  We're going to get even less from them if we get rid of the cap?  What about other large corporations in town that reap huge benefits from the cap like Novartis?

Brinkman:  "Look, the cap is necessary"

Tattler:  Previously you voted to let the people decide about this.  So why now reverse yourself? Why not let the people decide?  Why did you and your colleague Nora Davis lead a move to disenfranchise the people?

Brinkman:  "No comment".

Scott Donahue, the initiator of the withdrawn citizen's petition on the business tax cap agreed with Mr Brinkman that Pixar, for one, has gotten very creative with sheltering their money from City Hall's grasp.  Hinting that an audit of Pixar's books might be in order, Mr Donahue said, "Multi-national corporations are always going to find a way to realize their revenue where ever it is most beneficial to them. So a cap on Pixar will probably not have much effect on them, as they demonstrated with their $108,000 tax refund they recently got from the city".
However, Mr Donahue said that the city shouldn't allow itself to be so manipulated and any creative fiscal legerdemain by Pixar should not be held up as a reason to give up on tax fairness; to wit he noted, "We ought not have a special law to the benefit of only one or two corporations in town, it's essentially a handout to multi-billion dollar corporations that's totally unnecessary.  The rest of Emeryville's businesses are in effect subsidizing these few large corporations".

Pixar Warns Council: Don't Let The Rabble Take Over

Business Tax To Be Decided By Emeryville Voters

Pixar Invokes Specter Of Rancor With Business Tax Ballot Initiative

Last night, the Emeryville city council ignored the pleadings of Pixar and instructed the city attorney to begin preparations for a November ballot initiative so that voters may decide if business taxes should be raised.  In a stunning 5-0 vote that featured two reversals, the council moved forward two issues for voter's consideration: a raising of the business tax rate and a removal of the infamous business tax cap, a tax scheme designed to protect the largest corporation's upper gross receipts from taxation.

City Council: Unintelligent & Irresponsible
Before the council vote, Pixar corporate attorney Anna Shimko told the assembled throng that chaos would result if the people were so empowered.  Ms Shimko warned of a coming season of "rancor" from the business community as the election draws close.  She reminded the council of their duty to not let Emeryville descend in a baleful and chaotic state where the rabble would decide such important public policy as business taxes, "I know you to be a responsible and intelligent council" she intoned.

The Pixar Attorney offered the council a way out in the form of a delayed vote until the next council meeting so that the business community could give the council additional information and properly apprise the citizens of the disastrous results of a business tax hike in the interim.  The opportunity was seized upon by Mayor Nora Davis and Councilman Kurt Brinkman, "I think we could have one more meeting" Ms Davis said.  Council members Jennifer West and Ruth Atkin rebuffed however, "This has been in the works for over a year" Ms West said.

The council decided to take up the issue of a tax waiver for the smallest businesses under $100,000 gross receipts at a later council meeting.  Ms West noted that tax lowering can be done by a direct council vote and a plebiscite is not needed.

The people of Emeryville will be asked in November if the business tax cap, unprecedented in the Bay Area and extant for 18 years should be lifted.  On the ballot also will be a provision for voters to decide if the business tax rate should be raised from .08% to .1%, a rate still lower than our neighbors Berkeley or Oakland.  Council member West held out for a tax rate the same as Oakland, at .12%, noting four other taxes imposed on businesses there would still keep Emeryville the lowest in the area but her motion died for lack of a second.

In Back Rooms, Pixar Warns City; Residents However Must Operate In The Open

Back Room Finagling Happening Right Now At City Hall

City Will Face Resident's Wrath If Business Tax Cap Remains

Opinion

Faced with the biggest budget shortfall in modern Emeryville history, the city council recently turned to investigating increasing taxes after having massively cut government services.  Once their gaze was directed to the revenue side of the ledger, it didn't take long to see the glaring 800 pound gorilla residing in the business tax code: the business tax cap.  Not only does Emeryville have the lowest regular business tax rate (.08% of gross receipts) in the region, it's also the only city in the entire Bay Area with a business tax cap.

The tax cap is a huge tax break for the biggest businesses that the smaller businesses don't get; it renders all gross receipts over $146 million tax free, meaning these large corporations never pay any more than $114,000 per year, leaving billions of dollars untouchable.  The net effect of all this give-a-way to the billion dollar corporations is that the smaller businesses, the businesses that the residents find useful and neighborhood serving, pay a much higher rate than their well connected billion dollar corporate counterparts do.

Paul Ryan has a plan for America

and Pixar has a plan for Emeryville.
Both involve the rich not paying their share.

Emeryville has the unfortunate distinction of having the most regressive taxation in the entire Bay Area.  It's enough to make Wisconsin Congressman Paul Ryan and the Republican Party blush.

After the council floated the idea on May 3rd that perhaps the tax cap could be lifted by a November ballot initiative vote of the people of Emeryville, Pixar/Disney went apoplectic and they brought in their hot shot corporate lawyers and laid down a barrage of intimidation on our little city council.   Pixar it would seem, likes the tax cap.  The council withered and agreed to have city staff meet with the lawyers in private meetings to reach some kind of accord.  These back room meetings are finishing up and on Tuesday, the council will reveal how much the Emeryville residents will be allowed to vote on in November.

Given the state of our budget crisis with all its cutting of services and shelving of public amenity plans, the tax cap sticks out like a sore thumb; a government give-a-way plum to the richest among us.  The cap goes beyond way the rhetoric of trying to attract and retain business to help Emeryville's bottom line, the low .08% tax rate does that more than enough.

Will the city council feel
Pixar's pain?

The cap is much more than that; it smells of a regime of pro-big business ideology from an era when our backs weren't against the wall as they are now.  Emeryville's business tax cap is just unfair by any metric and its time has passed.

Woe be to any politician that bends to the will of Pixar and stands in the way of the people's will.  Tuesday will tell.

Business License Tax: Fortnight of Back Room Deals

Residents Must Wait Two Weeks For A Decision

Will The Council Let The Citizens Decide On Taxes?  

Last night the Emeryville city council voted to postpone for two weeks, a decision over the idea of a business license tax ballot initiative so Pixar/Disney and other large corporations can have time to negotiate more advantageous back room deals with the city staff.  At Pixar's request, the 4-1 (Nora Davis dissenting) council vote gives Emeryville's largest corporations two weeks longer, after more than a year of wrangling about the issue, to lobby the staff regarding the tax raising plan.

At issue is whether the residents should be allowed to vote in November on the infamous business license tax cap; whether it should be done away with and whether the tax rate should be raised.  The tax as it is now puts a cap on taxes owed for any gross income over $146 million and is unique in the entire Bay Area.  Formerly, the city had estimated a revenue enhancement of millions of dollars annually if the cap were to be raised.
The cap now effects only three businesses in town , including Pixar.  The highly regressive tax cap has the net effect of making the small businesses in town pay much more in taxes than the largest businesses.  The existing tax rate, above and beyond the cap, is .08%; also lower than what the neighboring cities charge.

Pixar Threatens City

Should Emeryville's taxes be similar to
other Bay Area cities?
Should the people decide?

Pixar's attorney last night warned the council to "slow down" and urged them not to make a decision yet, raising concerns that the whole tax increase ballot initiative is rash and needs to be more though out, regardless of the previous year of debate about the issue in the council chambers.  Further, the specter of litigation was raised by Pixar when council members were warned that they should take a step back "before this thing becomes divisive".

'Oops, We Made A Mistake!'
Eyebrows were raised when Karan Reid, the city's chief financial officer revised the previous estimations for the city's take from a license cap lifting from millions of dollars annually to now only $152,000 per year.  This is a result of the largest businesses revisions in their reports to the city.  Apparently, now Pixar has found many exemptions and deductions to their gross income, lowering dramatically the amount they would owe in the event that the residents vote to lift the cap.  Pixar, being one of three businesses effected by the tax cap lift would presumably only owe some $50,000 according to the newly revised numbers.  One resident noted last night however if the amount Pixar would owe is now so small, why are they fighting lifting the cap so vigorously?

The Chamber of Commerce announced they are not supportive of allowing the residents to vote on the issue.  Chamber president Bob Canter told the council not to let the rabble put Emeryville at risk.  Emeryville needs to keep everything just as it is to keep and attract business to Emeryville, he said.

The issue is now to be voted on May 17th by the council so Pixar has time to push their interests in the back rooms at City Hall.

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

Pixar's 'Bike Path To Nowhere' Nears Completion

Bike Committee Says 'No Thanks' But Pixar Forges Ahead: 

Pixar Is Ready To Finish Strange Unconnected $735,000 Bike Path

The asphalt has been laid and workers are finishing the landscaping and the pedestrian amenities of a curious bicycle/pedestrian path tucked behind the I-Hop and the CVS pharmacy on San Pablo Avenue that stretches between Park Avenue and 45th Street.  Pixar has announced the path, they call a "linear park", will be completed by mid January and will cost the animation giant  $735,964.   The path will facilitate bikers and pedestrians in extreme comfort  who's travel plans involve passage between Park Avenue and 45th Street in the vicinity of San Pablo Avenue.

The path is being constructed as part of a development deal between Pixar and the City of Emeryville but in a strange twist, Pixar is building the path against the wishes of Emeryville's own Bike/Pedestrian Committee.  It's the odd culmination of a story of the logic of bike/ped connectivity being twisted to conform to Pixar's greater interest in secrecy and land consolidation.

The strange story of the "bike path to nowhere" begins in the 1990's with a planned path extending north from City Hall along the trace of an old rail road spur a half block east and parallel to Hollis Street.  Starting at 45th Street and heading north, the old rail line has been turned into an alley known as Spur Alley.  Spur Alley was intended as a bike path but it has been instead turned over to cars in subsequent years because the city hasn't mustered the political will and because it never required the section heading south to City Hall at Haven Street to be built when Pixar took over the vacant land in 2000.  Instead, the city permitted Pixar to jog the incipient path over to the east two blocks to Watts Street owing to Pixar's need for secrecy.  This change happened just after the Bike Plan was first completed and was changed administratively by City Hall*.  Then Pixar wanted to take possession of Watts Street and they were given the street by the city, so again the city permitted Pixar to jog the path east, this time to Emery Street.  This required another Bike Plan change.  Then Pixar planned a campus expansion so the city gave them Emery Street and granted Pixar permission to jog the path over to the east one last time to it's final resting place behind the I-Hop.  This last change also required a change to the Bike Plan.

Got all that?

The Pixar main gate is aligned with

 what used to be Watts Street

By the time of the last change when Pixar took possession of Emery Street, the Bike/Pedestrian Committee had enough of jogging this path to the east.  Committee members expressed dismay that the path was now so far shifted to the east that the original path was rendered useless for biking or walking.  The committee subsequently voted unanimously to let Pixar off the hook for building the path but asked that they give a cash payment to the city for the amount of money the path would have cost them to build.  The committee instructed the city to use the money to upgrade biking and pedestrian facilities throughout the city on a "as needed" basis.

Strangely, Pixar would have none of that and announced it planned to build the bike/ped path anyway, the committee be damned.  The city council ceded to Pixar's desire and the path, by now unofficially dubbed the "Bike Path To Nowhere" after the famous bridge in Alaska, is nearly completed.

On a side note, the street given to Pixar, Emery Street, required that the city change an agreement it had made previously with a housing developer, The Castle Group, to build housing on the site where the path now sits.  The housing was an ambitious project, touted by the city to revitalize San Pablo Avenue and support the shops in the Promenade Center such as Arizmendi Bakery. There were 102 units ready to be built, many of them three bedroom and suitable for families.  The site is only one short block from the future new school that is to be built for $400 million and just approved by voters in November.  Ironically, the city is now in the process of trying to build as much family housing as possible to support the new school.

The city quietly gave Pixar the land, valued at $2 million, where the housing was supposed to be and in a strange shell game, turned around and accepted $2 million from Pixar as a much touted "donation" to build a proposed arts center near City Hall.

The path may be seen here: Pixar Study

* Correction: According to former council member Greg Harper, the first change, jogging the path east to Watts Street was made by a vote of the council, not administratively.  Mr Harper was on the council at the time and he says he voted in the minority, against the change.  This correction was made on Monday December 13.