Bay Area Council Blog

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How Brexit May Impact Bay Area Economically

(Bay Area Council Economic Institute Senior Director Sean Randolph offers initial analysis of the historic vote in Britain to exit the European Union and its impact on the Bay Area economically)

The full implications of Britain’s decision to leave the European Union are unknown, but some are foreseeable.  In the short term equity markets – particularly financials – will be hit, with uncertainty inserted into global financial markets. In the longer term London – where a number of Bay Area banks base their European operations – will see its status as a global financial center diminished, as institutions needing to do business in Europe shift their operations. This could benefit other European centers, such as Germany.

Economists predict that Britain’s departure will cloud the prospects for its economy, leading to a recession. Since Britain is one of the Bay Area’s leading trade and investment partners, Bay Area companies could be impacted. A significant devaluation of the pound and strengthening of the dollar could negatively impact US exports in particular. By raising a border between Britain and Europe, the regulatory cost and complexity for Bay Area companies conducting business on a European basis will increase, as the efficiency of what is now a single market in Europe for trade in goods is reduced. Business and leisure travelers between Europe and the UK may also face new visa requirements.

Within the EU, Britain has been a voice for market policies similar to those in the US, but will no longer be at the table.  This could impact Europe’s proposed Digital Single Market and policies on data privacy and cross-border data movement that are central to the interests of Bay Area technology companies.

The long term implications are less predictable, but could be large. Britain’s exit from the EU will encourage other political entities seeking independence from their countries to make a break. Scotland, where an independence referendum only narrowly failed last year, may move first, and Catalonia in Spain may not be far behind.

In the end, Britain’s departure points toward a less integrated, more divided Europe, and increased business costs. As populist movements gather strength in Europe and the US, it will add to the mounting political pushback against international trade agreements such as the Trans-Pacific Partnership with Asia and the Trans-Atlantic Trade and Investment Partnership (TTIP) with Europe. Many of the issues that Brexit raises will be worked out in Britain’s coming negotiations with the EU. What is clear is that in the new post-Brexit environment, the economic globalization on which much of the Bay Area’s recent prosperity has been based is open to question.

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Bold NYC Plan Offers Inspiration for Expanding Bay Area Ferry Service

The Bay Area isn’t alone in its push to expand ferry service. New York City Mayor Bill de Blasio this week (June 15) announced a massive $325 million ferry expansion plan that news reports dubbed one of the “biggest bets any city in the world has made on boats as vehicles for mass transit.” The announcement comes as the Water Emergency Transportation Authority (WETA), which operates the San Francisco Bay Ferry system, makes progress on its own strategic plan for expanding regional water transit service. You can bet we’ll be keeping a close eye on the Big Apple as de Blasio works to launch a fleet of new boats by June 2017. And the Council’s Water Transit Committee is planning to invite San Francisco-based Hornblower Cruises and Events, which has been chosen to carry out de Blasio’s plan, to hear how it’s going to meet the aggressive timeline and see what lessons we can learn.

New York City’s ferry expansion is a response to subway lines bursting at the seams, exploding job growth along the waterfront, and more people commuting from outer boroughs. These challenges are exactly why the Bay Area Council is advocating for the speedy delivery of a more robust regional water transit network that will provide a viable commute alternative to our strained highways and transit systems, and serve a growing number of waterfront job centers and housing developments. Among the big challenges to expanding ferry service here is finding funding. The Council is actively engaged in the effort to identify new regional funding sources for water transportation to deliver a service that is relevant and convenient for today’s commuters around the Bay Area. As well, incorporating the use of growing private water taxi service. To engage in the Council’s water transit policy work, please contact Policy Manager Emily Loper.

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Progress on Governor’s Affordable Housing Reforms

The real work now begins in the Bay Area Council’s campaign to pass landmark reforms speeding approval of new affordable housing statewide that Gov. Jerry Brown proposed as part of his budget. The Council has been working furiously in recent weeks to put pressure on legislators to pass the Governor’s reforms, which would allow cities to give simple administrative or “by right” approval of housing developments that are consistent with existing local planning, building and zoning regulations and that set aside either 20 percent of new homes for lower-income residents or 10 percent when the development is located close to transit. With good progress by the Legislature but no resolution before the Tuesday (June 15) budget deadline, negotiations on final bill language were extended until August 30. The Council is working closely with the Governor’s office and legislative leaders to ensure the final legislation retains its potency.

Meanwhile, the Council is continuing to grow its list of supporters. On Monday (June 14), the Council announced that Salesforce CEO Mark Benioff, Yahoo CEO Marissa Mayer and former Disney CEO Michael Eisner had added their names to a growing and diverse list of more than 80 top business leaders statewide who support the Governor’s reforms. Other leading CEOs include Dignity Health CEO Lloyd Dean, PayPal Founder Max Levchin, Virgin America CEO David Cush, PG&E CEO Tony Earley, Golden State Warriors and Los Angeles Dodgers Owner Peter Guber, TMG Partners CEO Michael Covarrubias, Lyft CEO Logan Green and Yelp CEO Jeremy Stoppelman. To add your name to our list of supporters, please contact Policy Associate Rachele Trigueros.

See the full list of housing reform supporters>>

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Economic Institute Study Lays Foundation for UC Campus Expansion

A 2010 study by the Bay Area Council Economic Institute helped lay the groundwork for a decision this week by the University of California at Merced to employ a public-private partnership in the next phase of its campus expansion. The study – Public-Private Partnerships: Alternative Procurement Methods for Campus Development in the University of California System – analyzed the opportunity for UC to expand UC Merced and develop other campus facilities by using public-private partnerships, which offer many advantages and benefits in improving the efficiency of project delivery and freeing public funds for other priorities. Under the decision this week, UC Merced selected Plenary Group to lead the next phase of its campus expansion, which will double the number of students it can serve to 10,000 by 2020. The agreement includes new facilities, a commitment by to engage private sector finance, and a 39-year contract for operations.

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Upcoming Report Examines Emerging Megaregion

The Bay Area Council Economic Institute is gearing up to release a major new report – Northern California Megaregion: Innovative, Connected and Growing – examining the increasing integration between the Bay Area, the Sacramento Area, the Monterey Bay Area, and the Northern San Joaquin Valley.

The report explores the challenges and opportunities of megaregional collaboration, including broadening the job base and creating more efficient transportation networks, which will be essential for the strategic growth of the Northern California Megaregion. It follows a 2014 BACEI report that similarly examined the Bay Area’s Tri-Valley area and its strong connections to the Central Valley.

Ahead of the report release, Council President and CEO Jim Wunderman will join business and transportation leaders in Oakland on June 20 to announce the expansion of Amtrak San Joaquin service connecting the Bay Area and Central Valley. The exciting addition of a new 7th daily round trip reflects the fast-growing connections of the megaregional economies.

Join us for the release of Northern California Megaregion: Innovative, Connected and Growing on June 30 from 11:30am – 1:00pm in Sacramento. The event will feature remarks by University of the Pacific Provost Dr. Maria Pallavicini, a summary of report findings from the Economic Institute, presentations from regional rail agencies on their future plans for expansion, and a stakeholders discussion on greater collaboration in planning and policymaking for the megaregion.

Click here to register>>

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Council’s Housing Advocacy Rewarded; More Work to Do

An intensive advocacy effort led by the Bay Area Council was rewarded late Thursday (June 9) when legislative leaders and Governor Jerry Brown announced a preliminary agreement on making landmark reforms to speed approval of new affordable housing statewide.

The Governor in his May budget revision included legislation that would allow cities to give simple administrative or “by right” approval of housing developments that are consistent with existing local planning, building and zoning regulations and that set aside either 20 percent of new homes for lower-income residents or 10 percent when the development is located close to transit. Meanwhile, legislators were asking the Governor for funding in the budget to boost low-income housing assistance programs.

In the deal announced Thursday, the housing assistance funding would be released as long as the “by right” reforms win approval in the legislature. The Council, under the leadership of Housing Committee Co-Chair Denise Pinkston of TMG Partners, in recent weeks has mounted an aggressive advocacy effort in support of “by right” housing approval, assembling a broad statewide coalition of business leaders and groups, meeting with key legislative leaders and driving a highly successful social media campaign. Our thanks to SV Angel Founder Ron Conway for his great support.

Like many things in Sacramento, however, the devil is in the details, and there is still work to be done on the specific language for by right approval. The Council is continuing its advocacy ahead of the budget deadline of June 15. To engage in our housing advocacy, please contact Senior Vice President Matt Regan.

See our growing list of CEO and business leader supporters>>

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Council Cheers Historic Regional Measure AA Win

Bay Area voters made history on Tuesday (June 7) by passing Measure AA, the region’s first ever nine-county ballot measure. The measure will raise $500 million over the next 20 years to clean, restore and protect the Bay and enhance its resilience against extreme storms and rising seas. The Yes-on-AA campaign demonstrated the awesome power of regional collaboration, as the coalition lead by the Bay Area Council, Silicon Valley Leadership Group, the Resources Legacy Fund and Save the Bay crossed the finish line with an impressive 69 percent margin.

Success would not have been possible without the leadership of Sen. Dianne Feinstein and the committed support of many Bay Area Council members, including PG&E, Facebook, TMG Partners, the Santa Clara Valley Water District, Google, Kaiser Permanente, Hanson Bridgett, Dignity Health, Wells Fargo, AECOM, Recology and Dick and Barbara Rosenberg. Thanks also to San Mateo County Supervisor Dave Pine, chair of the San Francisco Bay Restoration Authority, which will oversee the many important projects funded by Measure AA.

“Absolutely nothing is more important to us than keeping the public safe. Joining efforts like this will protect our communities and enable PG&E to continue to provide the reliable service our customers count on to power their lives. We are a company with a strong and enduring commitment to the environment and combating climate change. It’s rooted in a commitment to our customers and to doing our work in a way that protects the vital species and habitats that call our service area home and that’s why we’re pleased to be joining this important effort.” Tony Earley, PG&E Chairman and CEO; Member, Bay Area Council Executive Committee 

“This was a tremendous multi-year team effort by business leaders, politicians, non-profits, environmental groups and media. A very satisfying victory, and the big winner is our San Francisco Bay. Thanks to all!” Andy Ball, President & CEO, Suffolk Construction West Region; Member, California Water Commission; Co-Chair, Bay Area Council Water Committee

Read more reaction to the Measure AA victory>>

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Council Ready to Lead BART Bond Measure to Victory

The Bay Area Council is swinging into action with the unanimous vote Thursday (June 9) by the BART Board of Directors to place a $3.5 billion bond measure on the November ballot that will pay to fix the aging and overcrowded mass transit system. Under the leadership of Executive Committee member Andrew Giacomini of Hanson Bridgett and Council Chair Michael Covarrubias of TMG Partners, the Council is raising the funds that will be needed to execute a successful campaign.

The Council was instrumental in leading the effort to create the BART system almost 70 years ago, and the Council’s Transportation Committee under the leadership of co-chairs Jeff Heller of Heller Manus and Rosemary Turner of UPS has hosted several meetings over the past year with BART General Manager Grace Crunican and BART board members as the bond measure was in planning stages.

“Fixing BART is critical for ensuring its safety and reliability, meeting growing ridership demand and helping relieve traffic on our congested roads and highways,” said BART Board Director Nicholas Josefowitz. I’m looking forward to working with the Bay Area Council to pass the bond measure in November and invest in BART’s long-term future.”

There’s no higher priority for improving regional transportation than fixing BART and increasing its capacity to absorb record ridership growth. When BART breaks down the region’s entire transportation system feels the pain from increased traffic, slower commutes and lost productivity. The bond measure will invest in making important repairs and upgrades to improve BART’s safety, capacity, convenience and reliability. Recent polling shows that the BART bond measure narrowly reaches the two-thirds voter approval needed to pass, but a strong campaign will be crucial to ensure support remains above that level. To support the BART bond campaign and engage in the Council’s transportation policy work, please contact Senior Vice President Michael Cunningham.

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Council Energy Committee Welcomes New Co-Chair from Apple

The Bay Area Council Energy Committee on Thursday (June 9) welcomed new Co-Chair Mike Petouhoff, Global Energy Team Leader at Apple. He joins Co-Chair Tony Earley, Chairman, CEO and President of PG&E. The Committee was given highlights from the seventh Clean Energy Ministerial (CEM7), which the Council co-hosted with the U.S. Department of Energy and convened energy ministers from the world’s top 23 economies and the European Union to begin implementing the COP21 climate change accords. Among the many highlights of CEM7, some of world’s largest companies—including Council members Well Fargo, Google, Apple, Facebook, and Microsoft—pledged to shift to between 50 percent and 100 percent renewable power. Other private sector commitments included purchasing and distributing 8 billion energy-saving LED bulbs and the investment of $1.5 billion to accelerate the deployment of clean energy technology. More outcomes from CEM7 here>>

The Committee also heard from Natural Resources Defense Council Director Roland Hwang on the status of PG&E’s electric vehicle (EV) infrastructure proposal that is awaiting approval from the California Public Utilities Commission. The program would deploy thousands of EV charging stations throughout the Bay Area.

Dane Bowsen and Jeff Anderson from Cyclotron Road, a new early-stage energy technology incubation program at Lawrence Berkeley National Laboratory, spoke about the critical need for investment in energy R&D. Cyclotron Road identifies the world’s top energy technology innovators and provides them with the tools, capital, and partners needed to commercialize their technologies. To engage in the Council’s Energy Committee, please contact Senior Vice President Michael Cunningham.

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Creating Employment Opportunities for Boys and Men of Color

Bay Area Council Workforce of the Future Co-Chair Glenn Shannon of Shorenstein Properties on Thursday (June 9) kicked off a fantastic employer convening at the Federal Reserve Bank of San Francisco to discuss opportunities to tap into the boys and men of color (BMOC) talent pool. With 5.5 million opportunity youth (OY) – Americans ages 16 to 24 who are out of school and unemployed — it costs the nation $93 billion each year and $1.6 trillion over their lifetimes in lost productivity and increased social services.

As a specific component of the our broader Workforce of the Future initiative, the Council is partnering with LeadersUp, My Brother’s Keeper Alliance, PolicyLink, and Urban Strategies Council to launch a regional employment strategy focused on BMOC and opportunity youth. A group of over 50 employers at the meeting Thursday heard from My Brother’s Keeper Alliance CEO Blair Taylor, learned about a June 21 hiring event and were asked to become involved in a larger two-year program to train, hire, and retain young men of color to fill critical employment needs.

With the goal of placing hundreds of BMOC in career pathways to success, we will take a huge step toward ensuring an inclusive economy, while filling key workforce needs with talented young men of color. To get involved, please contact Policy Associate Rachele Trigueros.