Author Archives: goldham

PG&E fine could do more harm than good

The 2010 San Bruno gas pipeline explosion and fire was a tragic event. Those effected – and Californians across the state – are saddened, angry and rightfully concerned about pipeline and infrastructure safety.  A significant penalty is an appropriate response for this terrible accident. However, as the California Public Utilities Commission (CPUC) considers the severity of the fine it will impose on Pacific Gas and Electric Company (PG&E) – and whether or not the company can apply portions of it to pipeline safety projects already underway – it must be careful it does not do more harm than good.

The current fine proposed by some CPUC staff is set at $4 billion – a fine so severe it ranks as one of the largest penalties on record, more than double that against BP for the Gulf oil spill and 40 times more than the largest fine on record for a similar tragedy. Reacting in part to the severity of the proposed fine, the Standard & Poor’s Ratings Services last week revised its outlook on PG&E from stable to negative. When combined with other risks, this rating carries with it serious financial implications for PG&E including the possibility of bankruptcy.

Bankruptcy is a bad outcome for everyone. We all need a healthy utility company that can continue to access capital and make needed infrastructure and safety improvements.  Under the new leadership of CEO Tony Earley, PG&E is moving forward with billions of dollars in capital improvements that will make the utility’s infrastructure safer and more reliable. A penalty too severe will only slow that process by making it harder and more expensive for the company to make the investments required.

It is also in our best interest for PG&E to continue expanding and growing our economy. We need multi-billion dollar investments in the local electric grid, to support companies from Tesla to Twitter to neighborhood retailers. A reliable power grid, both gas and electric, has never been more important than it is today.

And anyone who remembers the PG&E bankruptcy during the California energy crisis understands the devastating impact it had on our local economy. This company is headquartered in San Francisco and has an economic impact that is significant across the Bay Area. PG&E has been creating jobs, contracting with local businesses and supporting charitable organizations for more than 100 years. Crippling their ability to do so hurts us all.

San Bruno has suffered and PG&E should pay a price for that. But that price should not be so high that we harm our economy, put jobs at risk and diminish a key source of charitable giving. Most importantly, the price should not be so high that it hinders much needed investments required for long-term public safety and economic growth.  The CPUC must be careful that any fine it imposes does not do more harm than good.

Balance Don’t Ban Formula Retail

How to best balance formula retail with non-formula retail, including small locally owned business, is a pressing question facing San Francisco. We are a city that values small business and we want to protect the independent character of our neighborhoods. We are also a city of innovation, where locally owned start-ups should be encouraged to grow and expand, and where large headquarter companies should be able to pilot new concepts. These ideals are not mutually exclusive.

Resistance to formula retail is nothing new in San Francisco. For years the city has banned “chain stores” from Hayes Valley, required conditional use authorization in neighborhood commercial districts and mandated notification in many neighborhoods when new formula retail is proposed. City lawmakers have made a total of 16 incremental changes to broaden the definition of formula retail and further restrict it in our city.

Now, there are nine new legislative proposals to restrict formula retail making their way through City Hall. Supervisor London Breed is seeking to expand the city’s definition of formula retail and restrict it in new commercial retail districts along Divisadero and Fillmore Streets and in the new Hayes-Gough Neighborhood Transit Corridor. Supervisor Jane Kim has proposed interim controls on formula retail in the Mid-Market area, a key neighborhood the city is aggressively working to revitalize. Legislation to further regulate formula retail has also been proposed by Supervisors Malia Cohen, Mark Farrell and Scott Wiener for sections of Third, Fillmore and Upper Market Streets.

While some level of policy is necessary to support small business and protect the character of neighborhoods, the recent proliferation of restrictive new proposals is concerning. Thankfully, the Chamber is not the only one that has taken notice. Last week, the city’s Planning Department announced that it will undertake an economic study to evaluate current formula retail rules and their economic implications in San Francisco. The Chamber, which represents hundreds of small businesses as well as a number of national retailers, has also convened a coalition of small business advocates and formula retailers to dialogue with city officials about this issue in the months ahead.

Now is not the time for hasty action. The Chamber encourages lawmakers to take pause on pending legislation until the Planning Department can complete its study, and stakeholders can engage in productive dialogue to find common ground. Small businesses and formula retail both have a place in our city. Both are important to our neighborhoods and both are important to the economic vitality of San Francisco. Finding the right balance is achievable if we use real data to create appropriate policies that serve our city’s residents, visitors, local merchants and business owners.

No Time for Scapegoating

Recently, there has been a lot of discussion about the impact on tech workers on our city. Many people are concerned about the availability and rising costs of housing, the displacement of minority and low-income residents and the gentrification of neighborhoods. Others are frustrated with corporate buses, traffic congestion and parking on city streets. Some observers have gone so far as to say we have reached a tipping point, where the influx of young entrepreneurs has changed the culture of our city forever.

Unfortunately, these unchecked concerns have escalated into some very bad actions that reflect poorly on our city. Last month, threatening graffiti appeared in the Mission District targeting tech entrepreneurs. In May, a group of protesters held an “Anti-Gentrification Block Party” and smashed a Google bus piñata before the police intervened. These actions are senseless and do nothing to help address the issues of affordable housing, transportation and diversity.

What is notably absent from the public discussion about our changing city is the positive impact the tech community has on our community and economy.  San Francisco is now home to more than 1,800 tech companies. These businesses employ 42,000 people and create 7.5 percent of the city’s jobs. What’s more, high tech jobs have a significant multiplier effect, creating thousands more jobs in other sectors in San Francisco and across the Bay Area.

According to leading University of California Berkeley professor and economist Enrico Moretti, Facebook alone employs 1,500 employees, but has created 53,000 jobs in app development and 130,000 more in related business services. Cupertino-based Apple has 12,000 employees, but has created more than 60,000 indirect jobs. On a smaller scale, local tech companies have had the same positive impact on local job creation. In an economy where every job counts, these significant economic contributions should not be overlooked.

From the Gold Rush to the dot com boom, San Francisco is a city that attracts innovators, risk takers and those seeking a better way of life. We are – and always have been – a city that thrives on the density of like-minded people and ideas. This is what makes us unique and what is now fueling the growth of the technology industry and the knowledge-based economy that is powering our recovery.

Recently, there has been a lot of discussion about the impact on tech workers on our city. Many people are concerned about the availability and rising costs of housing, the displacement of minority and low-income residents and the gentrification of neighborhoods. Others are frustrated with corporate buses, traffic congestion and parking on city streets. Some observers have gone so far as to say we have reached a tipping point, where the influx of young entrepreneurs has changed the culture of our city forever.

Unfortunately, these unchecked concerns have escalated into some very bad actions that reflect poorly on our city. Last month, threatening graffiti appeared in the Mission District targeting tech entrepreneurs. In May, a group of protesters held an “Anti-Gentrification Block Party” and smashed a Google bus piñata before the police intervened. These actions are senseless and do nothing to help address the issues of affordable housing, transportation and diversity.

What is notably absent from the public discussion about our changing city is the positive impact the tech community has on our community and economy.  San Francisco is now home to more than 1,800 tech companies. These businesses employ 42,000 people and create 7.5 percent of the city’s jobs. What’s more, high tech jobs have a significant multiplier effect, creating thousands more jobs in other sectors in San Francisco and across the Bay Area.

According to leading University of California Berkeley professor and economist Enrico Moretti, Facebook alone employs 1,500 employees, but has created 53,000 jobs in app development and 130,000 more in related business services. Cupertino-based Apple has 12,000 employees, but has created more than 60,000 indirect jobs. On a smaller scale, local tech companies have had the same positive impact on local job creation. In an economy where every job counts, these significant economic contributions should not be overlooked.

From the Gold Rush to the dot com boom, San Francisco is a city that attracts innovators, risk takers and those seeking a better way of life. We are – and always have been – a city that thrives on the density of like-minded people and ideas. This is what makes us unique and what is now fueling the growth of the technology industry and the knowledge-based economy that is powering our recovery.

Instead of targeting the techies, we should embrace them and engage them in our communities. The Chamber represents many tech companies and they are as much a part of our community as businesses from any other industry sector.

In San Francisco, we all have skin in the game. We all need housing. We all need jobs. We want mobility and a safe and vibrant quality of life for ourselves and our families. Whether you get on a Muni bus or a Google bus to get to work, we are all San Franciscans. It’s time to stop scapegoating one industry or another and work together on the important issues that impact us all.

Instead of targeting the techies, we should embrace them and engage them in our communities. The Chamber represents many tech companies and they are as much a part of our community as businesses from any other industry sector.

In San Francisco, we all have skin in the game. We all need housing. We all need jobs. We want mobility and a safe and vibrant quality of life for ourselves and our families. Whether you get on a Muni bus or a Google bus to get to work, we are all San Franciscans. It’s time to stop scapegoating one industry or another and work together on the important issues that impact us all.

Making Mobile Business Work in S.F.

Mobile Retail Trucks provide an exciting alternative for businesses seeking to establish themselves and expand their presence in San Francisco. They boast lower start up costs, lower annual operating expenses and provide significant flexibility for innovating entrepreneurs. Mobile businesses can also benefit the city by providing access to unique products and help to fill gaps in services in neighborhoods where they are needed.

However, Mobile Retail Trucks will also bring challenges to many brick-and-mortar businesses that are already heavily invested our communities. One needs only to look at the recent debate over Mobile Food Trucks, which now flourish in our city, to see what lies ahead in establishing mobile retail in San Francisco.

After the introduction of Mobile Food Trucks, many restaurants objected to the city’s permitting process including concerns over truck locations, loss of parking and unfair competition with businesses operating on public streets. According to the Golden Gate Restaurant Association (GGRA), its members have seen a daily revenue loss of up to 40 percent when food trucks park outside their business.

Earlier this week, the Board of Supervisors passed legislation providing tighter rules for Mobile Food Trucks, which should help address some of the key issues. The new rules require a 75-foot buffer zone around existing restaurants; legalize food trucks on hospital and college campuses; and streamline procedures for enforcing citations against trucks that operate in locations where they are not permitted.

As the city evaluates a new permit for Mobile Retail Trucks, it must consider the issues of certainty and equity that caused conflict with its food counterparts. Should the city move ahead with its plans, San Francisco will become the first major U.S. city to regulate mobile retailers. It is important to get it right at the start.

Businesses should be able to innovate and our city should embrace new ways to grow commerce. But the growth of one new industry should not unfairly impact the businesses in another, especially those businesses that continue to invest in our communities.

We’ve made good progress on creating a more predictable system and better balance when it comes to food trucks. Now, we need to do the same for mobile retail.

Sustainable Funding for Transportation

A safe, reliable and efficient public transportation system is critical to the economic vitality of our city.  San Francisco is a leading urban center and our regional economy is the 19th largest in the world.  Our city’s residents, businesses and visitors need and deserve an effective transportation system that supports mobility, commerce and a high quality of life.

Unfortunately, San Francisco’s transit system is drastically underfunded, and has been for decades. The San Francisco Municipal Transportation Agency (SFMTA), which oversees Muni, is now facing a $2.2 billion backlog in deferred maintenance and a $70 million structural operating budget. According to a new report from the City Economist, Muni breakdowns are costing the city $50 million annually in lost productivity.

These budgetary challenges will only be exacerbated as our population continues to grow. In the coming decades, San Francisco will gain an estimated 101,000 additional households and 191,000 new jobs. Across the region, the population is projected to expand from 7 million residents to 9 million by 2040. Investment in our public transportation system is needed now

San Francisco is making progress.  In 2010, voters passed Proposition G giving Muni control of its largest costs and ending the agency’s flawed wage formula. According to agency officials, these reforms have already helped save $41 million in contract negotiations. Muni has taken steps to more effectively police fare evasion. The SFMTA is also moving forward with its Transit Effectiveness Project (TEP) to further improve Muni’s operating efficiency.

But this is only a small start in the much bigger challenge of creating a sustainable transportation system that meets our needs. The Chamber is participating in the Mayor’s 2030 Transportation Task Force with SPUR and other business, neighborhood and labor representatives to evaluate and recommend funding measures to the SFMTA Board of Directors and the Board of Supervisors.

While it is clear that no one funding solution is going to work for everyone, all ideas are on the table. Changes to parking policies, new bond funding and raising the Vehicle License Fee (VLF) are just some of the potential options being discussed by the task force. SFMTA officials are also looking closely at department work orders. For example, the San Francisco Police Department (SFPD) motorcycle unit costs the agency $9 million a year, money that perhaps should come from the general fund.

When it comes to San Francisco’s transportation system, there is no silver bullet. But, if we work together, we can create an informed and broad-based approach that both provides adequate mobility and is fiscally sustainable. Now is the time to act.

Chambers Catalyzing the Clean Energy Economy

While the national clean energy economy continues to develop at a relatively slow-pace, local chambers of commerce have emerged as a key catalyst for clean energy in communities across America. According to a new report from Chambers for Innovation and Clean Energy, hundreds of local chambers are playing a leading role in attracting investment and supporting the growth of the emerging clean economy.

According to the report, Local Chambers as Change Agents: Creating Economic Vitality through Clean Energy and Innovation, ten chambers of commerce are having a particularly significant impact and serve as models for other chambers seeking to develop the clean energy economy in their communities. While the approach of each chamber is different, the results are impressive.

In South Carolina, the state’s first grid-connected wind turbine was introduced with the help of the North Myrtle Beach Chamber of Commerce. In Chicago, smart grid legislation that will update the city’s outdated electrical grid was enacted with the help of the Chicagoland Chamber.  In Cleveland, Ohio, the local chamber helped companies realize more than $13.4 million in savings last year through energy efficiency projects, while the Merrimack Valley Chamber in Massachusetts set 46 companies on the path to a combined $30 million in savings through lower energy bills. Chambers in Asheville, North Carolina and Salt Lake City, Utah have helped manufacturing and shipping companies save more than 10 million gallons of fuel.

The San Francisco Chamber of Commerce is proud to also be recognized as a model chamber advancing clean energy for our role in leading business advocacy efforts for California High-Speed Rail – a project that will create thousands of jobs and usher in a new era of mobility for California. Our chamber was also one of the first business organizations to support California’s landmark Global Warming Solutions Act (AB 32) and continues to champion incentives such as the local Clean Technology Payroll Tax Incentive and the recently renewed federal Wind Energy Production Tax Credit (PTC).

Clean energy is an important economic development tool in San Francisco and our nation. Our city is home to more than 225 clean technology companies and our region continues to capture the majority of North America’s clean tech investment. According to a report from University of California, Berkeley, America can create up to 1.9 million new jobs, increase annual household income above $1,100 and boost GDP up to $111 billion through comprehensive clean energy and climate policies.

As Congress continues to catch-up with much of the nation when it comes to implementing clean energy policies, local chambers are trailblazing the path forward. The San Francisco Chamber of Commerce is incredibly proud to have helped pave the way for our city’s accomplishments and to join with our chamber colleagues across the country in accelerating the clean energy economy nationwide. Together, we can win the global clean energy race.

Celebrate Small Business

Small businesses are key to the economic health of San Francisco, California and our nation. Their entrepreneurship fuels the innovation economy. Their agility spurs creativity across industries. And their uniqueness truly shapes the character of our communities.San Francisco is fortunate to have so many small businesses. These employers provide jobs to 283,000 people, approximately half of San Francisco’s entire workforce. No matter how you measure it, these businesses, with less than 100 employees, are the backbone of the local economy.

As the economy continues to grow, the outlook is improving for small business. Increased consumer spending is giving a boost to businesses nationwide. A record number of tourists is providing additional growth in the Bay Area. Local efforts, such as Mayor Lee’s Invest in Neighborhood Initiative and the Chamber-supported recapitalization the San Francisco Small Business Revolving Loan Fund (RLF) are bringing new resources to San Francisco’s commercial corridors. Wells Fargo, Bank of America and others are also playing a role in providing more lending to small businesses.

However, challenges remain for many local merchants and start-ups. A recent survey found that 79 percent of American small businesses still think the economy is on the wrong track. Access to capital, the skilled worker shortage, and uncertainty surrounding future taxes and health care obligations are just a few concerns currently on the minds of small businesses.

This month, San Francisco will celebrate the contributions of small business and spotlight the many resources available to help overcome obstacles and thrive in the global economy. The Chamber is proud to kick-off these festivities on May 6 with the Business Showcase, the Chamber’s largest annual networking event spotlighting over 150 local businesses, restaurants and creative companies. Local emerging manufacturers will open up their factories and show off their wares during SF Made Week May 6 – 12. Capping off the celebrations, San Francisco Small Business Week will connect more than 4,000 local small businesses at workshops, seminars and celebrations across the city May 13 – 18.

The Chamber takes pride in recognizing the small business job creators in San Francisco and across our nation. We salute the entrepreneurialism and perseverance of these small businesses and pledge our continued support in helping to create a vibrant climate in which small businesses can thrive. We encourage everyone to join the many festivities planned during the month of May and join us in celebrating the small businesses that are shaping our communities.