Shop owner Maureen O'Neill says the Bay Area needs better green biz support.

After researching the pros and cons of opening a retail green business in San Francisco versus Oakland, Berkeley, or Marin, O’Neil opened The Treehouse, a “green” home and gift store, in Berkeley, where she felt she would both attract the most customers and receive the most support from the city and local green business organizations.

While sales have been brisk, O’Neil recently discovered that she would have to wait over a year to be certified as a green business by the Bay Area Green Business Program, despite having conducted extensive research before opening her store to ensure that she met the program’s standards. Moreover, O’Neil says she’s not sure what kind of help to expect from the program once her business is certified. “I think something’s lacking for entrepreneurs and small businesses, which could use marketing advice and help finding suppliers,” she says.

THE LIMITS OF LOCAL
As the green business world continues to explode, economic development departments in cities throughout the Bay Area are scrambling to get a piece of the pie. With California’s attractive incentives for renewable energy and the Bay Area’s history of environmental responsibility, the region seems ideally positioned to attract a variety of green businesses, with each city addressing a different need: lower cost land suitable for manufacturing in parts of the East Bay, access to university research in Berkeley and Palo Alto, a marquee address in San Francisco, and customers and investors interested in environmentally responsible products and services throughout the region. Rather than presenting the Bay Area as a green business Mecca, capable of competing with China, the East Coast or the Pacific Northwest, cities have tended to stick to traditional economic development strategies, working in silos on their own efforts for fear of losing out on money.

“Cities can be very parochial about economic development, especially in California, where retail sales tax is the theme,” explains Michael Caplan, economic development manager for the city of Berkeley, Calif.

Although not an economic development plan, the Bay Area Green Business Program is a good example of some of the challenges involved in supporting green business in the region. The program certifies everything from businesses services to retail stores and restaurants, and includes all nine Bay Area counties. While all of the counties agree on a basic structure and framework for certification, each county program is responsible for its own funding and staffing.

And certifying your business in one county doesn’t guarantee you certification in any of the program’s other counties. To wit, if you start a business in Berkeley and get certified, then open an outpost of your business in San Francisco, you will need to seek certification for your San Francisco location from the San Francisco office.

Berkeley businesses apply for green business certification through the Alameda County program, which oversees 20-odd other cities with only enough funding for half a person to work full time, according to program director Pamela Evans.

In San Francisco County, meanwhile, the county is only responsible for one city—San Francisco—and the green business program has one full-time staffer and part-time attention from a handful of other full-time city staffers whose time is already bought and paid for by the city. Even so, the program is hesitant to advertise its existence for fear of overloading its capacity, according to San Francisco Green Business Coordinator Sushma Dhulipala.  

Although the program prides itself on offering a free service to business owners, some say they would gladly pay to streamline the certification process and have access to helpful advice or services. O’Neil says she has received the most help from the traditional Better Business Bureau.

“You pay dues, but they offer legal assistance in case of any disputes or lawsuits, and offer 25 TV commercials per year advertising your business,” she says. “If there were a green organization that could do that, I’d join in a second.”

On the economic development front, some say efforts focused on green business in the region are built around existing structures that work for the cities or counties themselves, but may not be as useful to the businesses they are meant to attract and support. 

Steve Newcomb, a successful Silicon Valley entrepreneur-turned-environmental advocate, says the private sector needs to be in on the discussion as well. He points to recent solar tax credit programs under development in San Francisco and Berkeley as prime examples. Both would provide corporate solar purchasers with great incentives to go solar, but both are applicable only within city limits. Companies with an office in San Francisco and a plant in Richmond, then, would get credits for installing solar on their office—but not for their energy-heavy factory. It’s a step in the right direction, Newcomb says, but it needs to go further.

Proponents of a regional approach to “green” economic development argue that if more green businesses start up in the Bay Area, all of its cities will be positively affected. People already commute from the East Bay to San Francisco or Silicon Valley, they say, and positioning the greater Bay Area as a center for green business innovation will only bring more money, jobs and talent to all of its cities.

It’s not as though Bay Area leaders haven’t seen regional economic development work in the past. Silicon Valley was once a hodgepodge of cities, too, each trying to attract new businesses and more money. The area had been grounded in technology since the late 1940s when the Stanford Research Institute was launched, IBM unveiled the world’s first digital computer, and Stanford University decided to offer longterm leases of its land to high-tech companies.

Proximity to Berkeley is a key benefit for some cleantech companies. Photo courtesy Shell.

As time passed, the region attracted larger companies such as Lockheed Martin, as well as NASA; the university began turning out high-tech talents eager to start their own high-tech companies, such as Bill Hewlett and David Packard; and the area became known as a technology hub.

The term “Silicon Valley” was coined by journalist Don Hoefler in 1971 and initially referred only to Santa Clara County, but as representatives from cities such as Palo Alto, Menlo Park, Santa Clara and San Jose began working together on initiatives such as the Silicon Valley Economic Development Alliance, its definition grew to include a large chunk of the San Francisco peninsula contained by the San Francisco Bay on the east, the Santa Cruz Mountains on the west and the Coastal Range to the southeast.

“Silicon Valley didn’t start attracting startups because it offered cheap real estate and labor,” Donald Simon, an attorney with Oakland law firm Wendel, Rosen, Black & Dean, points out. “It was because there was a critical mass of talented individuals and businesses, and if you were going to do a tech startup, you wanted to be there to be near customers and tap into that labor pool.”

Simon says the same could be true of the Bay Area and green business startups if city governments stopped thinking about city-specific economic development and started thinking regionally.

He’s not the only one.

Allison Quaid, executive director of the Bay Area Alliance for Sustainable Communities, has been working on pulling together a meeting that will bring city officials, economic development directors and sustainable business advocates from cities in all nine Bay Area counties into the same room to talk about ways to collaborate as a region.

“There are always a lot of barriers to the cities coming together, because they’re set up to compete for financial incentives,” she says. “But people are starting to see a real advantage to strengthening the ‘green’ economy throughout the region, and over 90 percent of the people I’ve talked to are eager to meet with their counterparts in other cities; it will just take some time for them to trust each other.”
 
Quaid says city staffers throughout the region have cited numerous areas where they would like to see region-wide collaborative efforts, including coordinated standards for green businesses and green building, unified lobbying efforts on behalf of Bay Area green businesses at the federal level, an assessment of the current number of green jobs (both green-collar and PhD-level positions) available and accurate projections of jobs coming online throughout the region, regional green job training programs and a region-wide green employer directory. 

“Another big point for them is just general information sharing,” she says. Getting them to share best practices in terms of stimulating market demand for green products, ensuring supply to meet that demand, and drafting policies and guidelines related to green business and green building are top priorities on her list.

“I see a lot of cities doing their own reconnaissance on green building policies and guidelines, and they could easily share that knowledge rather than having each city spend staff hours and money on doing its own research,” Quaid adds.

AFTER THE WEDDING
In addition to positioning the Bay Area as a good place to launch a green startup by promoting its talented labor and providing tax incentives, Newcomb says city governments need to go a step further and actually help support those businesses once they’re here. “What I’d really love to see is a region-wide incentive program for young green entrepreneurs, where we’re giving green startups reduced office rent, or even incubating some businesses,” he says.

Again, the backlog for green business certification in the Bay Area is an example of where the region could do more to support green business. San Francisco, which joined three years ago, is the youngest member of the Green Business Program. Currently, hotels, restaurants, offices, retail businesses and dentists can get certified in San Francisco. Businesses in other industries have contacted the program asking about certification and Dhulipala says the San Francisco staff is working on it, but hasn’t had time to finalize criteria for other sorts of businesses. Drafting and revising criteria is where a large percentage of the program’s staff time is spent.

“Even though we all share a basic framework, we spend a lot of time on San Francisco-specific criteria,” Dhulipala says. “Sometimes we revise the criteria 12 or 15 times a year; we want to be ahead of the curve. It seems like a basic thing, but it’s very important, because we have more visibility and a lot of times other cities are looking at what San Francisco is doing,” she explains. The program also posts its checklists on the Web and includes the public in developing criteria, in order to be completely transparent, she adds.

Although important, the time spent on San Francisco-specific criteria and lists would seem to benefit the city’s “green” image (and perhaps green businesses in other regions) more than San Francisco green businesses looking to the program for support—which points to a basic need for staff time and funds devoted to supporting green business once the city’s economic development team succeeds in attracting it.

The backlog for green business certification is an issue Jennifer Cogley, sustainable business coordinator for the City of Berkeley, says she hears about almost daily. The other problem, ironically, can be the multitude of green business-focused nonprofit organizations or independent certification programs. While Cogley says she appreciates the work nonprofit organizations are doing, sometimes their sheer number can be a challenge.

“There’s a lot of duplication happening, and it’s sometimes tough for us to figure out who we should be making the strategic partnerships with,” she says. Similarly, the plethora of green business associations may take away from integrating “green” companies into a traditional chamber of commerce. “In the past there was frustration with those traditional seats of power, and the reasons for that might not be there anymore,” Cogley says.

Mark McLeod, executive director of the Sustainable Business Alliance (SBA), says organizations such as his want to be a part of the local chamber, but it can create a conflict of interest for chamber leaders. “There’s a built-in contradiction of sorts between traditional chambers and the SBA or the Green Chamber of Commerce,” he explains, “The chamber is by charter supposed to represent all local businesses. The executive director may want to be supportive of green organizations but doesn’t want to disown his biggest financial contributors, which may not be green. How you bridge that divide remains to be seen.”

Quaid says the green business community needs a “champion” who can push collaborative efforts ahead and bring everyone together. “Then you need those efforts to generate some successes,” she says.

The mayors of Oakland, San Francisco and San Jose met at a green business event recently; the three said it was only the third time they had met face-to-face, according to Quaid. “There’s a real culture of collaboration around this stuff in general, though,” she says. “People feel as though we’re running short on time and resources, and we need to work together. It’s just a matter of doing it in a way that makes sense financially for everyone involved.”