Lite Up San Leandro

San Leandro has a new Fiber Optic Network, but is it doing enough to maximize that coming advantage?


Lite Up San Leandro

Full disclosure:  the author of this piece, Chris Crow, is a declared candidate for San Leandro City Council, District 4

There is an exciting new opportunity developing for businesses in San Leandro.   The city is implementing a broadband connection incentive program to help businesses who want to connect to San Leandro’s Fiber Optic Network cover some of the costs.  The program will allow for a $2,000 - $10,000 grant for a business to cover some of the connection costs to pipe into the 11mile fiber loop that is very near completion in San Leandro. 

San Leandro’s Fiber Optic network is the absolute best opportunity San Leandro has right now to join the rest of the world in the 21st Century.  Our community, through the gracious efforts of our biggest tech company in town OSI Soft, can use this new infrastructure to help attract quality paying jobs, and champion a quality of life that is second to none in the Bay Area, state, country, or world. 

This vision can only be achieved through a unified and concentrated effort to maximize this coming new advantage.   Unfortunately, the amount budgeted for the city to incentivize a business to connect to our fiber is $180,000 – that is one quarter of one percent of the city’s entire budget aimed at attracting new business to town.  This is not the hallmark of a city that’s “ready for business” as the city’s new promotion video sells.  Although I absolutely believe we have a lot of the right and necessary pieces already in place, not spending enough on doing the one thing we know we have an opportunity to do is a bad policy for the current growth environment we are entering. 

To make it worse, that $180,000 is split with two other incentive programs, one to improve existing businesses facades, and an industrial competiveness program that assists businesses in upgrading equipment. 

Along with another coming tech wave, the economy is struggling to grow, but it is growing.  We have exceeded our conservative sales tax revenue estimates for multiple years now, and we are expected to receive more than what is budgeted this year.   I believe the city should invest a lot, if not most, of any sales tax revenue coming in over budget estimates at the mid-year budget adjustment into this broadband connection incentive program. 

The Community & Business departments both expressed concern about “opening the flood gates” on this program, as at the moment it only has $180,000 to work with.  We should not be afraid of our own shadow right now.  Connecting buildings to the fiber loop is a win win for San Leandro, because even if the business fails, the fiber is already to the building. 

We missed the tech wave last time around, and I hope we do not miss it this time. Lets lite up San Leandro. 

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authors note: I recently expressed this idea and sentiment at a Community Development Committee meeting

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

John July 18, 2012 at 10:25 PM
So is your complaint that the City is spending too little to market the fiber optic loop, too little to help companies connect to the loop or both? Either way, if you want to spend more money for advertising or helping businesses, you need a source of money. What would you suggest as a source of funding?
Chris Crow July 18, 2012 at 10:37 PM
Hi John, Thank you for your comment. I wouldn't call it a complaint of sorts. Just an observation and suggestion - but yes too little money is being spent to help companies connect. The city is doing a lot to promote and extend the Fiber loop, and I'm sure there is more in store. However, the single biggest barrier for businesses to connect and use the fiber is/will be cost. The city, through this broadband incentive program, can solve that problem for a lot of interested businesses. In my blog I call for a mid-year budget adjustment - if it can be done sooner then it should be. If sales tax revenue coming in this year is above budget estimates then I believe we should invest a lot, if not most, of that excess revenue in this broadband incentive program. Sales tax revenue has been above estimates for multiple years now. Outside of excess sales tax revenue, I would leave it to the City Manager to determine any areas of the General Fund budget to divert funds into this program. I'm only offering one funding source possibility in this blog.
sanleandronumerouno July 20, 2012 at 12:11 AM
Isn't the loop an investment by OSI? Correct me if I'm wrong but doesn't Dr Kennedy expect to make money by having firms connect for a price? If so why should the city help? Seems to me if this extra money you expect does come in it should go into reinstating programs that have been axed in the last 5 years, reinstating library branches and hours at the main library and rebuilding the general fund and not to help a company(a very generous one no doubt) to increase their bottom line at the expense of every citizen of this fine town
Chris Crow July 20, 2012 at 06:33 AM
We absolutely should be looking for ways to reinstate library hours and programs, but we need a way that's sustainable. Bringing in new business to town to take advantage of our fiber expands our business base and the city will gain a more sustainable increase in revenue to do just that.
Paul Vargas July 20, 2012 at 11:45 AM
We should also eliminate the Utility Users Tax since San Leandro is one of only a handful of Bay Area Cities that has such a drain on electricity heavy businesses. Of course the simpletons will cry about "global warming" but the only "warming" they're concerned with his warming their butts with more pay and pensions.
Fran July 20, 2012 at 02:08 PM
I agree with numero uno. We are doing more than enough as far as I'm concerned. The redevelopment money is not there anymore for these pet projects. Re-instating library hours and fixing the potholes would be a better use of funds for the average San Leandran. When they start talking about connecting residents to this fiber, than I may start listening.
David July 20, 2012 at 02:52 PM
If the city can't figure out how to spend tax dollars effectively, the taxes should be return to the taxpayers.
Chris Crow July 20, 2012 at 05:02 PM
Sure the average San Leandran would notice more library hours and a pothole fixed, but they'll notice even more when the hours have to be cut even more and the roads further deteriorate because we didn't invest in expanding our business base and bringing san leandro into the 21st century when we had a chance to. that's what happened in the 80's and 90's when the city missed the last tech wave and now our library hours are cut and we have potholes. if we do that again this time around it will be another self-inflicted wound. This incentive program has nothing to do with redevelopment. the 3 business incentive programs the city has have always been from the general fund, and the broadband incentive program isn't some huge project with developers or federal/state money pushing the agenda. We control our destiny with the fiber loop.
Fran July 20, 2012 at 07:47 PM
Are we sharing in any of the revenues that are to be realized from the broadband services? If not, then I wouldn’t call it an investment. What if we have to pay the state all that money? Do you think it will still be wise to pay for capital improvements for private businesses? Where should we come up with the money then?
Chris Crow July 20, 2012 at 07:52 PM
We share in the revenue by way of jobs and tax revenue a business using the fiber would create. As for "what ifs" - if the city is required to pay the state all of its excess sales tax revenue then we wouldn't have any excess sales revenue to spend on this program.
Tom Abate (Editor) July 20, 2012 at 08:08 PM
To questions about sharing in the revenues, the deal between OSIsoft and the city gives the city about 10 percent of the fibers in the loop, for the city to do with as it sees fit. It could use them to light up libraries. Or it could sell these fibers to a private company that would compete with Kennedy, and get revenues in such a deal. So there should e ways for the city to make money down the road through licensing those fibers, or at least use them to the benefit of San Leandrans.
Chris Crow July 20, 2012 at 08:44 PM
"like" Tom Abate's comment 1:08 pm on Friday, July 20, 2012
sanleandronumerouno July 20, 2012 at 08:46 PM
What tax dollars would we get back? If the companies tapping into the fiber are office,research type of firms we get squat, We would need manufacturing firms who could use the fiber to their advantage and I don't really see a lot of those in the US anymore.
Chris Crow July 20, 2012 at 09:00 PM
San Leandro is full of specialty manufacturers, and the manufacturing sector in the US is growing and expected to keep growing in the next decade. FH Dailey Chevrolet has proven that any type of business can utilize the fiber. It's increased efficiency at the car dealership, and the owner has said it's best investment he's ever made. So it doesn't have to be just office and research firms that benefit. but lets not forget even if a new office or research firm moves in...that's more jobs and more paying customers of our shops and restaurants during the weekdays. it's chain reaction economics.
sanleandronumerouno July 20, 2012 at 09:26 PM
If a company is viable they will understand the value of fiber, if the city wants to extend a short term tax break to entice a company fine but spending limited dollars to bet on a companies potential, no way
Chris Crow July 20, 2012 at 09:31 PM
what the difference between offering a tax break and the city spending money? Cities like Oakland and San Francisco have business taxes, San Leandro does not. We have business licensing fees, which are mere pennies on the dollar that other cities get with taxes. San Leandro can't offer a tax break, but we can use some of our excess tax revenue to entice companies as your suggesting, through this already existing incentive program.
sanleandronumerouno July 20, 2012 at 10:06 PM
We don't have excess tax revenue that is the major flaw in your article. Even if tax revenues increase year over year the city will still be behind in offerings and services to the citizens.
Chris Crow July 20, 2012 at 10:16 PM
The city just shelled out $1.5million to cover some one time costs because of in part from excess sales tax revenue last year. The city was able to increase their budget amount for sales tax revenue this year, and I'm merely suggesting if sales tax revenue is above estimate, as it has trended the last 2 years, then we allocate a portion of that to this broadband incentive program. We can not sustain the services we want our government to offer us unless we can expand and build our business base or raise taxes on citizens. I'd like to explore the former before the latter.
Mike July 21, 2012 at 02:00 AM
What is the commercial vacancy rate? Think its single digits, E14th corridor is probably higher. Seems to me the people with the most incentive to promote the fiber loop would be the commercial real estate community because if its a huge advantage they are going to earn the commissions. City need only promote it to them and let the business community run with it.
Barry Kane July 21, 2012 at 02:06 AM
100% agree with all your above comments Chris. If we sit where we are economically and as a community, our city will become obsolete and undesirable. We will have to reduce libraries, parks and other services and we will pay more for police and other basic city services because our tax base will decline as will our property values.
Chris Crow July 21, 2012 at 04:31 AM
Waiting is the mentality that caused us to miss the last tech wave. We need to act...we have this incentive program already in the tool box, and we need to use it as often as possible to create opportunity. Sitting and waiting is no longer an option for our community as far as I'm concerned. It is the root of most, if not, all of our problems in San Leandro.
anthony July 21, 2012 at 07:13 PM
A business incentive program funded by excess taxes or a grand opening sale sponsored by reduction in city services? Are the sale numbers that bad, what's the rush? Will property owners be allowed to participate with vacant properties, and who will get how much and why? Just looking around town it appears some did much better than others with facade money, will this program use similar criteria for participation? Do you happen to know what "piped in" entails or how that labor will be contracted ? I realize you're not offering a freeby, but what percentage of installation/connection cost is being considered ?


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