Bay Area Council Blog: Economy Archive

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Bay Area-Sacramento Ties Strengthen California Economy

The Bay Area and Sacramento have much to gain from building stronger economic ties that can benefit both regions and the state overall. That was among the key messages Bay Area Council CEO Jim Wunderman delivered Wednesday (Jan. 16) as the keynote speaker in front of more than 800 business, elected and community leaders at the 2019 Economic Forecast presented by the Sacramento Business Review (SBR) and hosted by Sacramento State University.

Wunderman described the incredible economic growth in the Bay Area, along with the housing and transportation challenges that have also accompanied the boom. And how those challenges have created an opportunity for expanding business and jobs in Sacramento. He about how promoting greater partnership between the two regions can produce dividends for both.

Wunderman outlined ways in which Sacramento can strengthen its own economy by expanding its airport, enchancing technology transfer opportunities from UC Davis, deepening its talent pool, staying ahead of housing and transportation challenges and working the Bay Area Council to strengthen megaregion collaboration. The audience gave loud applause to Wunderman’s calls for vastly improving rail connections between the Bay Area and Sacramento to enable one-hour travel times.

The Council extends is thanks to SBR for organizing this important forum. SBR is a volunteer-led public service effort for the greater Sacramento region that uses the collective training and expertise of the economists, Chartered Financial Analysts and industry leaders to produce a body of objective regional economic analysis to help educate and inform the community.

See Jim Wunderman’s presentation>>

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Council Gives Big Thumbs Down to Texting Tax

A proposal by the California Public Utilities Commission to tax text messaging got a strong thumbs down this week from the Bay Area Council and other groups. It was unclear exactly how the tax or levy would be charged, but the CPUC plan also called for making it retroactive to five years ago. The CPUC was scheduled to consider the texting tax this week (Dec. 12) but for unknown reasons rescheduled the matter to Jan. 10. An oped by Council CEO Jim Wunderman that ran in the San Jose Mercury News on Wednesday said “the text tax would raise wireless phone bills for tens of millions of Californians young and old, rich and poor, urban and rural” and questioned the need for a new tax. The funding would presumably support a CPUC program to provide access to telecommunications services for lower-income and disadvantaged residents, except that the program already has $1 billion in it and has seen its spending almost double in the past four years. The new tax may also run afoul of federal regulations approved this week that define texting as an information service. That would remove texting from the CPUC’s authority. An unscientific poll of Twitter users that received 417 votes found 95 percent oppose taxing texting. The Council continues to examine this misguided proposal ahead of the January meeting. To learn more, please contact Public Policy Vice President Adrian Covert.

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Council Briefs Gov.-elect Newsom on Megaregion Project

Gov.-elect Gavin Newsom received a briefing today on research the Bay Area Council Economic Institute is doing that examines the important economic ties between the Central Valley, Silicon Valley and the broader Bay Area. Newsom was joined by number of Central Valley leaders, including former Fresno Mayor and Central Valley Community Foundation CEO Ashley Swearengin, to hear from Economic Institute President Micah Weinberg on economic opportunity and regional connectivity in the Central Valley. The Economic Institute and CVCF are partnering on the report. A host of other Central Valley elected officials and business leaders presented on key areas that should be priorities for the Newsom’s administration. Council board member and UC Merced Chancellor Dorothy Leland also attended and highlighted the amazing and often-overlooked innovation in areas such as autonomous vehicles happening in the region. The Economic Institute will be releasing its full Valley to Valley report in the first part of next year.

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Council, KPMG Explore Exciting New Opportunity Zone Program

Dozens of impoverished and low-income areas around the Bay Area are eligible for investment under a new federal Opportunity Zone (OZ) program that was the focus of a recent informational forum the Bay Area Council co-hosted with KPMG. The event brought together a diverse group of financial, tax, investment and development experts along with elected and public leaders to discuss how opportunity zones can be leveraged regionally to produce positive outcomes across infrastructure, business and real estate, and generate a wide range of job-creating economic activity. OZs were included in the 2017 Tax Cuts and Jobs Act. They provide tax incentives for new investments in projects that address needs in environmental justice, sustainability, climate change and affordable housing.

Council CEO Jim Wunderman and KPMG Principal Dan Feitelberg welcomed the audience before Dan Carol, a senior advisor in the Governor’s Office of Business and Economic Development, led a discussion with Richmond Mayor Tom Butt and Micah Runner from the office of Stockton Mayor Michael Tubbs on the potential for OZs to serve these low-income areas. Later in the day, KPMG Principal Orla O’Connor led a discussion with leaders from the Council, Bridge Investment Group and Highmore Group Advisors on technical aspects of OZ regulations. The Council plans to convene additional forums as more information becomes available from the IRS and Department of Treasury on the rollout of the OZ program. To learn more, please contact Council consultant Stephen Malta.

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Members Making News: Sutter Health, Heller Manus

Sutter Health’s Mills-Peninsula Medical Center recently announced the launch of a new groundbreaking approach to avoid delays in treating strokes, which are the fifth leading cause of death and the top contributor to long-term disability in the U.S. In a public private partnership, Sutter Health will pilot a new specially-equipped and -staffed ambulance, called a mobile stroke unit (MSU). The goal is to test whether bringing stroke diagnosis and treatment to patients—rather than waiting for them to arrive at the emergency department—improves outcomes. From the outside the MSU resembles a standard ambulance, but inside it equipped with a CT scanner and other technology critical for diagnosing stroke. Initially, a stroke neurologist will ride in the Mobile Stroke Unit. Data gathered through the Mills-Peninsula pilot will contribute to national efforts aimed at demonstrating the mobile stroke unit’s ability.

 

Heller Manus Founder and President and Bay Area Council board member Jeffrey Heller recently was awarded one of the top honors in architecture, the MIT Architecture Alumni Lifetime Achievement award. Heller joined I.M Pei in receiving the illustrious honor. In making the award, MIT said: Since its beginning in 1984, Heller Manus has established a reputation for influencing architecture and urban design in the Bay Area, nationally and internationally. Heller is a Fellow of the American Institute of Architects. Heller is a major supporter of MIT’s Department of Architecture, where his Jeffrey D. Heller Fund provides graduate student financial support and is helping MIT move the needle on its goal of making the School of Architecture and Planning tuition free for all graduate students. Congratulations, Jeff!

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Bay Area – Germany Dialogue on Smart Manufacturing / Industry 4.0

From November 7 – 9, the Bay Area hosts a German delegation of Smart Manufacturing / Industry 4.0 leaders, including the recipient of the Frost & Sullivan Manufacturing Leader of the Year 2017 Award. The program is organized by EIT Digital and the German American Business Association in California as part of the “Year of German-American Friendship” and includes events on November 7 and 8 that are open for BAC members as well as visits to Bay Area manufacturing sites.  Learn more and register here>>

November 8 at 4 pm, Industrie 4.0 Conference at SAP Palo Alto: REGISTER

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So Much for the Demise of Silicon Valley

While some outsiders see a decline of Silicon Valley, a major announcement by JP Morgan Chase CEO Jamie Dimon suggests the news of its death may be greatly exaggerated. Bay Area Council member JP Morgan Chase is planning to open a new “fintech campus” in Palo Alto in 2020 that will house more than 1,000 employees, including staff from payments start-up WePay, which the bank acquired last year. The announcement comes in the wake of a recent article (forgive us for not linking to it) in The Economist that argued Silicon Valley has peaked. Dimon doesn’t share that view and has talked about the critical role of Silicon Valley in helping advance JP Morgan’s push into technology as it works to make banking more convenient for business and new consumers and address issues related to online fraud and cybersecurity.

Dimon’s enthusiasm for Silicon Valley is echoed in an opinion article by Bay Area Council Economic Institute Senior Director Sean Randolph that is scheduled to run in the coming days. In it, Randolph writes “that region’s economy is growing at a rate that rivals the fastest growing economies in the world. The region’s universities are among the world’s best, and are continuing to draw top talent. Patent generation, as it has for decades, far exceeds that of peer cities across the country (17.3% of all U.S. patents originate here; the next closest place in New York with 5.5%). Four of the most highly capitalized companies in the world are located here, with lines of unicorns and mega-unicorns waiting to go public. More importantly as a barometer, the region’s share of national venture investment is holding steady at a remarkable 45%, the number of incubators and accelerators is growing, and entrepreneurs are continuing to pour into the region.”

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Merced Visit Highlights Megaregion, Public-Private Partnerships

The important role of Merced and UC Merced in the growing Northern California megaregion was the focus of a recent trip the Bay Area Council made to that Central Valley city to hear from Mayor Mike Murphy and Chancellor Dorothy Leland about some of the incredible changes taking shape there. CEO Jim Wunderman led the Council delegation, which heard from Murphy as he outlined the city’s many assets and plans for growth. Leland described progress on the university’s massive Project 2020 expansion, the nation’s largest and most impactful public-private partnership (P3) to deliver civic infrastructure.

The Bay Area Council Economic Institute under the leadership of Senior Director Sean Randolph provided the early research into public private partnerships that was instrumental in guiding the development of UC Merced’s bold Project 2020 plan, which includes 13 new buildings. She credited the Economic Institute’s work for focusing the campus on the P3 option when others proved unavailable, informed its strategy, and has enabled the current buildout. Against that backdrop, Wunderman talked about growing population in Merced and the broader Central Valley, the relatively affordable home prices and the role that stronger rail connections could play in linking the city more closely to the Bay Area and integrating it with the emerging megaregion.

UC Merced Chancellor Dorothy Leland

“Today we are focusing on the economic potential of building greater interconnectedness, which would have major benefits to both regions,” Leland said. “It’s not just about creating a bedroom community here. We will be attracting businesses and industries that will help lift Merced, the Valley and the state.”

Merced Mayor Mike Murphy

“This has been a fantastic thing for us,” Murphy said. “We’ve had a real public interest with UC Merced, and there has been an increase in private interest because of it.”

Bay Area Council CEO Jim Wunderman

“When you look at the Central Valley and the Bay Area, you think of separate places that are far away. Once that transportation connection is complete, the game is going to change.”

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Learning from Portland’s Regional Governance Model

A Bay Area Council delegation of business and government leaders traveled to Portland, Ore., this week to see what we can learn about that region’s approach to housing, homelessness, transportation and regional governance, among other issues. Led by Executive Committee members Chris Rivielle of Plant Construction and Mary Huss of the San Francisco Business Times and Silicon Valley Business Journal, Council CEO Jim Wunderman and  Joint Venture Silicon Valley CEO Russ Hancock, the group met with Portland Mayor Ted Wheeler and leaders of regional government agency Metro, the Portland Business Alliance and Prosper Portland.

Mayor Wheeler stressed the need for partnership across the West Coast as the Bay Area, Portland and Seattle confront similar challenges in housing affordability, homelessness and traffic. Additionally, the group toured Portland’s exciting Broadway Corridor Project, a major new development on 32 acres in the heart of the city. The Council will bring the lessons it learns from Portland back to the Bay Area to help inform our own work to grow regional collaboration across the Bay Area. The Council extends its appreciation to Alaska Airlines for serving as lead sponsor. The Portland trip is one of a continuing series that the Council is organizing to learn how other regions around the country are addressing similar challenges as those we experience here.

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Leveraging Tech, Innovation to Address Regional Challenges

The Bay Area Council this week was thrilled to partner with member company TechCrunch on Disrupt SF 2018, one of the technology industry’s biggest annual gatherings highlighting the game-changing founders, new startups and emerging trends shaping and leading the tech sector. As part of a speaker lineup that included Priscilla Chan, Ashton Kuchar and Daru Kawalkowski, Council CEO Jim Wunderman led a conversation on how technology and innovation can be leveraged to address the many challenges the Bay Area faces even as the economy booms.

Wunderman was joined by Carla Boragno, Vice President of Site Services for biotech giant Genentech and Co-Chair of the Council’s Housing Committee; Michael Matthews, California Director of Public Policy for Facebook and Co-Chair of the Council’s Transportation Committee; and, Vikrum Aiyer, Head of Public Policy & Strategic Communications for Postmates. The discussion delved into the role business can play in working with elected and government leaders to address housing, transportation, climate resiliency and workforce development challenges. While the challenges are real, Wunderman also shared findings from the recent Bay Area Council Economic Institute’s 2018 Economic Profile that examines the overall strength of the region’s economy.

Watch videos from the action-packed, three-day extravaganza>>