Business Resources & Incentives > Incentives > Green Industry in the East Bay
A report generated in 2008 for businesses in "green" industries considering locating/expanding in the East Bay
3. WORKFORCE PREPARATION AND TRAINING
4. PROSPECTIVE EMPLOYEE RESOURCE INFORMATION
For more green info, click here.
1. INTRODUCTION
There is a broad community of architects, environmental
consultants, building owners, politicians and others in the
East Bay who are active in promoting and developing
this market. California’s reputation of concern for
the environment is largely centered in the San Francisco Bay
Area and the East Bay plays a significant role in the
development of this industry.
The public’s awareness of the importance of this issue is
reflected in state and local policies. An attachment is
included that lists a number of federal, state and local
incentives available in East Bay communities. Two
year ago a poll ranked San Francisco, Berkeley and Oakland
as the #1, #3 and #9 most sustainable cities in the nation.[1]
Figuring into these ratings:
San Francisco’s $100 M solar bond
Berkeley’s active green building program, and goal of
cutting greenhouse gas emissions by 15% by 2010 – a standard
exceeding that established by the Kyoto protocol
Oakland’s commitment to cut emissions 70% by 2050
The East Bay’s largest utility, PG&E, has gained a national
reputation for its support of renewable energy and recently
signed a renewable energy deal with
PPM Energy for an 85-megawatt wind project. At the
state level the Economic and Technology Advancement Advisory
Committee of the California State Air Resources Board
recently announced it was seeking plans and products to
increase renewable energy sources to boost the supply from
that source from 18% to 50%.
It is not surprising, then, that there are a number of
renewable energy equipment manufacturers in the region
contributing to the growth of the industry. With one
of the nation’s largest windfarms located at the Altamont
pass, the local industry cluster even includes specialized
companies serving the wind turbine industry. The East
Bay’s PowerLight is one of the fastest growing photovoltaic
companies in the nation.
But research and development may be an even larger East Bay
industry contribution. At the three Department of Energy
National Laboratories and the University of California
Berkeley – all l.ocated in the East Bay -- new battery
technologies, advanced materials for ultracapacitors, fuel
cells, flywheel energy storage systems, energy capture from
tidal motion, biofuels and other technologies join solar and
wind power as subjects for research.
The research and development has benefitted from proximity
to the world’s largest venture capital cluster. During
the first half of 2007 U.S. venture capital investors showed
their increased enthusiasm for green or clean-tech deals by
investing $458 million in 26 deals across the country. Over
$80 million of this investment and 6 of these deals went to
East Bay companies for renewable energy and storage
technologies.[2] In addition, during
the first half of 2007 the East Bay’s Berkeley Lab, under
the direction of Nobel Laureate Steve Chu, attracted
approximately $920 million for biofuels research from
government and private sources. In October San
Rafael-based
Nordic Windpower, a manufacturer of two-bladed
utility-scale wind turbines, announced that it had received
a "significant investment" from investment bank
Goldman Sachs.
Over the years many companies have found it convenient to
move to the Bay Area to make it easier for potential venture
investors to sit on their boards of directors and to attract
the researchers and graduate students with knowledge of
these new technologies.
For their part, local communities have been eager to welcome
these companies. Depending on location there are
Enterprise Zones, Local Agency Military Base Recovery Areas
and Redevelopment areas in the East bay offer various tax
benefits. For manufacturers, the East Bay has been
California’s most successful in providing Industrial
Development Bond financing – very attractive with rates that
are generally about 2 % below prime. Employment
Training Panel funds can provide up to $5,000 per employee
for training. Other programs such as special electricity
rates are available to qualified businesses depending on the
utility district serving the site. Manufacturers
importing parts or products from overseas may wish to make
use of Oakland’s Foreign Trade Zone which allows the
deferral or elimination of import tariffs. To assist you in
understanding and receiving these benefits, city, East Bay
EDA and state economic development officials are networked
together to help you make the most of these opportunities.
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2.
BUSINESS ASSISTANCE
Each site offers different opportunities for tax advantages
and other benefits. For additional information, please
contact city or East Bay EDA staff members. Below are
some representative programs.
a. R&D tax credit
http://www.ftb.ca.gov/businesses/credits/rd/overview.html
Companies planning to take advantage of the Bay Area’s
superior resources for research and development, will be
interested to know that California offers one of the most
generous research and development tax credits in the nation.
Designed to encourage companies to increase their basic
research and development activities in California, the R&D
tax credit allows companies to receive a credit of 15
percent for qualifying in-house research expenses and 24
percent for basic research payments to an outside company or
university. Qualifying expenses include:
Employee wages for researchers, supervisors, and support
services;
Supplies used in conducting the research; and
Amounts paid to outside consultants for the right to use
personal property for research.
b. California Energy
Commission PIER Program
http://www.energy.ca.gov/pier/
The California Energy Commission’s Public Interest Energy
Research (PIER) Program supports research, development and
demonstration (RD&D) projects that will help improve the
quality of life in California by bringing environmentally
safe, affordable and reliable energy services and products
to the marketplace. The PIER Program annually awards
up to $62 million on a case-by-case basis for RD&D in a
number of areas including end-use energy efficiency in
buildings, energy systems integration,
environmentally-preferred advanced generation, and renewable
energy technologies. Commission staff are always
looking forward to meeting with company officials to discuss
the possibility of grants and loans. Please refer to
the website for more information.
c. Industrial
Development Bond Program for Equipment and Facilities
http://www.eastbayeda.org/business_resources_incentives/industrial_development_bond_fInancing_program.htm
The East Bay offers a tax-exempt Industrial Development Bond
program that may be applied to equipment as well as
assisting in the company’s expanding space needs.
Aimed at small and mid-sized projects, this program provides
low-cost, long-term financing for real estate and equipment
projects that retain or create employment in Alameda or
Contra Costa counties. The bond proceeds may be used for the
financing of new capital projects including: land and
building acquisition; construction; renovation; and new
machinery and equipment.
IDB bond amounts usually start at around $2 million up to a
maximum of $10 million for projects with total costs no
larger than $20 million. Repayment periods extend up
to 40 years and interest rates are generally about 2% below
prime. Although projects compete on a statewide basis,
historically, the East Bay EDA has been one of the most
successful issuers in the state – better than Los Angeles or
San Diego.
d. Enterprise Zones –
Oakland,
Pittsburg and
Richmond
Enterprise Zones are created to stimulate business
development in targeted areas with three located in the East
Bay -- Oakland, Richmond and Pittsburg.
Businesses located in an Enterprise Zone are eligible for
substantial tax credits and benefits including:
· Up to 100%
Net Operating Loss (NOL) carry-forward, up to 15 years;
· $31,544 or
more in state tax credits for each qualified employee hired;
· Sales tax
credits on purchases of $20 million per year of qualified
machinery and machinery parts;
· Certain
depreciable property can be expensed up-front and lenders to
Zone businesses may receive a net interest deduction;
· Unused tax
credits can be applied to future tax years, stretching out
the benefit of the initial investment;
· Enterprise
Zone companies can earn preference points on state
contracts.
e. LAMBRA (Local Agency
Military Base Recovery Area) – City of Alameda
http://www.ci.alameda.ca.us/apb/lambra.html
The LAMBRA program provides investment incentives, similar
to those offered in Enterprise Zones, to businesses locating
or expanding on former military base facilities. These
benefits include:
· Up to 100%
Net Operating Loss (NOL) carry-forward, up to 15 years;
· $31,544 or
more in state tax credits for each qualified employee hired
up to $2 million per year with a few provisions;
· Sales tax
credits on purchases of $20 million per year of qualified
machinery and machinery parts;
· Up-front
expensing of certain depreciable property, up to $40,000
annually;
· Unused tax
credits can be applied to future tax years, stretching out
the benefit of the initial investment.
f. Foreign-Trade Zone, Subzones
http://www.pac-am.com/services-ftz.html
The East Bay EDA can assist in securing space and services
at the Oakland Foreign Trade Zone (FTZ) or in the creation
of an FTZ for the purpose of deferring, reducing or
eliminating the amount of duty paid for components
manufactured overseas. The advantage of a Foreign-Trade Zone
is that for purposes of tariff assessment, products are
treated as if they are outside the continental United
States. Among other benefits, this means no duty is paid for
the foreign components of any finished products manufactured
in the zone and shipped overseas. Duty is only
assessed when products enter the United States from the FTZ,
but at that time the company may elect to pay duty on each
constituent foreign part or on the finished product,
whichever is less. As a result the following benefits
accrue:
· Deferral
of Duties: Customs duties are paid only when and if
merchandise is transferred into U.S. Customs territory. This
benefit equates to a cash flow savings that allows companies
to keep critical funds accessible for their operating needs
while the merchandise remains in the zone. There is no time
limit on the length of time that merchandise can remain in a
zone.
· Reduction
of Duties: In a Foreign-Trade Zone, with the permission of
the Foreign-Trade Zones Board, if the rate on the foreign
inputs admitted to the zone is higher that the rate applied
to the finished product, the FTZ user may choose the
finished product rate, thereby reducing the amount of
customs duty owed.
·
Elimination of Duties: Customs duties are eliminated on
foreign merchandise admitted to the zone but eventually
exported from the FTZ. Generally, customs duties are also
eliminated for merchandise that is scrapped, wasted,
destroyed or consumed in a zone.
· Labor,
Overhead and Profit: Customs duties are not owed on labor,
overhead and profit attributed to production in a FTZ.
· Taxes:
Tangible personal property imported from outside the U.S.
and held in a zone, as well as that produced in the U.S. and
held in a zone for exportation, are not subject to state and
local ad valorem taxes.
U.S. quota restrictions do not apply to merchandise admitted
to zones, although quotas will apply if and when the
merchandise is subsequently entered into U.S. commerce. With
the permission of the Foreign-Trade Zones Board, merchandise
subject to quota may be substantially transformed to a
non-quota article free of quota restrictions. Quota
merchandise may also be stored in a FTZ until a quota opens
f. Recycling
Market Development Zones (RMDZs)
http://www.ciwmb.ca.gov/RMDZ/
The California Integrated Waste Management Board (CIWMB) the
State agency responsible for managing California’s waste
stream, has created three Recycling Market Development Zones
in the East Bay: Oakland/Berkeley, Contra Costa County
(including the City of Richmond), and Southern Alameda
County (Union City and Fremont). Within these zones,
manufacturers that process materials for remanufacture or
manufacture products from recycled materials are eligible
for benefits including:
· Loans at
below market, fixed rates
·
Streamlined permitting and siting
· Technical
assistance
· Marketing
assistance
Loans can be obtained up to $2 million for as long as 15
years at 5% (current Wall Street Journal prime rate is
8.25%) to purchase owner occupied property, equipment,
recycled materials, or other approved uses. In
addition, the CIWMB and StopWaste.org provide technical
assistance as well as grants and mini-grants for qualifying
reuse projects.
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3.
WORKFORCE TRAINING AND PREPARATION
Availability
There should be a number of workers in the basic occupations
listed in the request for information. The East Bay
has the largest workforce in the Bay Area and the commute
shed includes San Jose and San Francisco as well as the
Central Valley to the East. Companies have often
opened new facilities in the East Bay specifically to gain
advantages in recruiting and retaining workers living in or
near the East Bay.
Targeted Recruitment and Training
State of California Employment Development Department (EDD)
Job Service:
The Employment Development Department, the Workforce
Development Branch and the Workforce Investment Division are
available to assist companies desiring to expand operations
and retain employment in California. Upon request,
EDD’s Job Service will recruit and assess candidates from
all three of the Bay Area’s major metropolitan areas and
coordinate the activities of any of the service agencies or
training institutions required to meet your workforce needs.
The local chapter of Experience Unlimited can provide
professional, technical, managerial, or other skilled
individuals to meet your needs. In addition, Job
Service has access to a statewide database of nearly 1
million active resumes to provide the greatest possibility
of filling all workforce needs.
After the initial request, Job Service is also prepared to
provide subsequent and ongoing support through its Employer
Contact Management System (ECMS) that enables staff to
retain its understanding of company occupational
qualification requirements and hiring procedures.
EAST BAY Works
EAST BAY Works is a regional consortium of the Workforce
Investment and Workforce Development Boards in the East Bay.
Once a decision is made to locate in the East Bay, a further
detailed discussion can be arranged between the company, the
State and the appropriate WIB or WDB to determine the
appropriate amount for a federal Workforce Investment Act
training grant. Alameda County’s Business Development
Unit has been very active in securing grants on behalf of
local companies and was one of five such organizations
nationally to be awarded recognition for industry workforce
development. Contra Costa’s Workforce Development
Board has received recognition for addressing workforce
issues in the manufacturing sector. Services provided
through the WIBs and WDBs include the following:
Talent Acquisition: Recruit and screen highly skilled
applicants for manufacturing, engineering, business and
administrative positions utilizing one-stop career centers
throughout the Bay Area.
OJT: Provide On-The –Job (OJT) training funds to meet
company training needs.
Training Brokerage: Locate and arrange training
provided by Community Colleges; California State University,
East Bay; and the University of California, Berkeley
Extension. Trained staff will work with your company to
identify local education and training agencies qualified to
meet your needs for training in basic skills, soft skills,
management, and leadership.
Coordination and Oversight: Coordinate all local workforce
services to ensure a successful business partnership.
Access to Talent: Engage the Rapid Response Unit along with
its network of EAST BAY Works One-Stop Centers to give your
company access to the region’s pool of experienced highly
skilled talent.
(NOTE: OJT & WIA funds are contingent on availability of US
Department of Labor funds)
Any company establishing operations in the East Bay and
desiring workforce assistance, can work directly with an
assigned member of the WIB/WDB Business Services staff to
tailor a customized workforce development program including:
basic recruitment; company wide incentives for retraining
and new hires; and any appropriate additional funding to
underwrite these activities. In developing these programs,
staff will work closely with your company to help select the
appropriate training partners from among the many training
providers in the East Bay.
Employment Training Panel and the Alameda County WIB
The Employment Training Panel (ETP) provides funds to train
California's workforce in the skills necessary for local
businesses to successfully compete in the global economy,
and specifically targets manufacturers and their suppliers.
ETP pays employers for the cost of providing training for
existing or newly hired employees. ETP reimburses
contractors for their costs based on the number of trainees,
retention of trainees, the number of training hours, and the
type of training. The training may be provided by the
employer or through public or private training entities, and
the employer decides on the training curriculum and the
trainers. Although the average reimbursement for all
ETP contracts last year exceeded $1,000 per trainee, the
actual reimbursement can reach $5,000 or more based on the
number of training hours or type(s) of training. ETP has
paid out over $800 million since it began in 1983, and has
paid for the training of over 600,000 workers in more than
60,000 companies.
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4. PROSPECTIVE EMPLOYEE
RESOURCE INFORMATION
a. East Bay K-12 Education
Throughout the East Bay commute shed there are a number of
school districts with a range of schools within each
district. In general Alameda and Contra Costa county
schools exceed the state average. By reputation,
Piedmont and Orinda have excellent school systems, but there
are excellent schools in the school systems throughout the
East Bay. Below is a link to school district test
scores from the California Department of Education:
http://data1.cde.ca.gov/dataquest/
b. Affordable Housing Programs
First time home buyers can find assistance through a variety
of sources. In addition to the programs listed below,
some cities have their own programs to help workers who live
in their city.
California Home Source Lease Purchase Program
http://www.calhomesource.org/index.html
This is a program of the Association of Bay Area Governments
(ABAG), a non-profit representing the local governments of
the nine-county San Francisco Bay Area. The program
applies to most types of housing.
CALHFA High Cost Area Home Purchase Assistance Program
http://www.calhfa.ca.gov/homeownership/programs/hicap.htm
This program consists of two loans: a) a CALHFA below market
rate first mortgage loan; and b) a deferred-payment low
interest rate second loan up to $25,000 to be used for
downpayment assistance.
Homebricks
http://www.homebricks.com/
HomeBricks is a not-for-profit organization, providing real
estate and financial services to first time homebuyers,
homeowners, cities and developers. This is an
information service to put buyers in touch with affordable
housing opportunities. Homebricks is sponsored by
BRIDGE Housing Corporation, a non-profit developer of
affordable housing.
Mortgage Credit Certificate (MCC)
http://www.co.alameda.ca.us/cda/mcc_program/index.htm
This is a federal program offered by various local
governments with slightly different qualifications and terms
in each jurisdiction. MCCs increase a buyer's ability
to qualify for mortgages by reducing the "effective" (rate
before taxes) interest rate approximately 1.5 %. MCC
recipients take 15% of the annual mortgage interest payments
as a dollar-for-dollar credit against their federal income
taxes. The buyer decreases their federal income tax
withholdings based upon the credit, increasing their net
income available to pay a mortgage. Eligibility requirements
and additional information for the Alameda County program
are available on the website.
[1] SustainLane May 2005 poll,
http://www.sustainlane.com/cityindex/citypage.php?name=ranking
[2] VC Report for the first and
second quarters of 2007 from PricewaterhouseCoopers/National
Venture Capital Association MoneyTree(tm). Report based on
data from Thomson Financial.