Beautiful Data Center Wows Council

In Which: Small Business Development Center shouts out easy money for businesses, Data Center buys Community Benefits for height, and El Pollo Loco makes me feel old.

Financing and Beautiful Industry

This week is an off-week for the City Council—so no meeting—but things still happen. Today I’m covering the Council Economic Development Committee (CEDC) which dives deep into business policy for the City—and a lot gets done here that never makes it to the City Council.

If you find this interesting and want more coverage—or more similar coverage—consider pledging. I don’t charge for this, but pledging lets me know you would pay if I did so I can maybe consider dedicating more time.

Get Money for Your Small Business

It started with a presentation from the East Bay Small Business Development Center (SBDC), which is housed under CSU East Bay (/Hayward). Most of their money comes from the Federal (U.S. Small Business Administration) and State Governments (California Office of the Small Business Advocate), so this is your tax dollars at work. They were presenting was about small business financing.

It’s tough for small businesses to get loans—a necessary evil in the hyper-financialized and capital-intensive world of Bay Area business—and the SBDC can help new businesses secure initial funding. For 1-2 year old businesses, they can work with partners to get easy loans for between $50,000 and $150,000 and even access some bigger loans of up to $5,000,000 for certain uses—including buying real estate.

SBDC can also help with business plans for conventional loans, VC pitches—if you can stand the kind of crowd that calls a primary funding source “friends family and fools”—and crowdfunding. They also have regular workshops and a ton of different resources for smaller businesses. It’s all paid for by your taxes and they help anyone in Alameda County.

Councilmember Angela Andrews started the conversation by asking how the City can connect people to EBDC’s services. You can just go to their website and sign up or go to the Economic Development department and they can help you. She also asked what the typical roadblocks were for financing and Ms. Mangold said that it was usually fear of rejection or lack of documents and plans needed to secure loans. “[You need to] show that you’re a legitimate business,” she said, “with a legitimate capital flow.” She also said that accessing small loans can be very easy.

Councilmember Ray Bonilla Jr. recalled that when he got his MBA, a lot of it was dedicated to learning how to jump through the hoops that banks demand before loaning businesses money. “It is hard to write a business plan,” he said, “It is intimidating to go out and find funding.” He asked if it was open to anyone, and Ms. Mangold assured him that they serve businesses throughout Alameda and Contra Costa Counties.

Mayor Mark Salinas brought things a bit closer to home. “What is it that we need,” he asked, “to do to start restoring business activity in downtown? …We have the pieces. What do we need to do to attract people?” Ms. Mangold suggested using the SBDC to generate leads for potential business owners. But Mayor Salinas shifted attention to the owners of the buildings downtown, “I don’t know if all this money will motivate them.”

City Staff pointed out that part of the issue is that business owners need to improve the buildings in order to make them usable—a tall order for a business just starting out. They said that adding a commercial kitchen to a building can cost up to $450,000. “If it’s $450,000 in a building you don’t own, who’s gonna do that?” he said.

Staff also mentioned other barriers to businesses downtown. “[There are] lots of hurdles that this government puts in place,” Staff said, including codes and fees—though they also admitted they were necessary. But, he said, “every little condition adds up,” and at the end of the day businesses need to decide “is the juice in Hayward worth the squeeze?” However, even Staff conceded that “a lot of it is the building owner… 80% of the blame is well-warranted.”

Councilmember Andrews looked back at the easy loans and said, “It’s telling if these $150,000 loans aren’t enough.” But she also took sides with the landlords—some of whom are famously difficult to work with—and asked “Are we supporting these property owners?” Mayor Salinas chimed in to say that an important part may be “matching the space to the business accurately.”

Councilmember Andrews asked if the SBDC could help fill the role of matchmaker, and Ms. Mangold said that they have already taken some of their business cohorts to the Castro Valley Marketplace and walked them through the process of getting started there. “Can you do that at Lincoln Landing?” Councilmember Andrews asked. City Staff pushed back on that, saying that the leasing company at Lincoln Landing is “second to none” and that filling the vacancies there will probably just take time.

It’s also noteworthy that the locations at Lincoln Landing are enormous compared to the heavily subdivided space at the Castro Valley Marketplace.

But Staff did point out that part of the issue is matchmaking, “[Some] issues are possibly a realistic expectations on return and willingness to partner on the part of the property owner.” They said that collaboration will be key, “[We’re] trying to build collaborative relationships with property owners.”

The Beautiful Data Center

The Planning Department rolled up next looking for very specific early feedback on a big data center that’ll be coming to the Industrial area—over 300,000 square feet and over 100’ tall. It’ll have two generator yards with a total of 28 backup generators and an on-site power substation and a switching station. Hope they’re buying from AVA like the rest of us.

But the specific thing that Staff wanted feedback on is the Public Benefits Package the developer is offering. The zoning says that the building can only be 75’ high, but it can go higher with approval and they’re essentially buying that approval for $1,100,000—or trying to. If that sounds weird, it’s because you don’t see how it happens all the time. Below is what they’re pitching for their money:

And if you’re wondering what it looks like, here’s one of the renderings

If it doesn’t look like a data center, that’s part of the plan. “We had to elevate the design,” the developer said, because it’s just off Highway 92 and “highly visible”. There are false windows and all this massing they probably don’t actually need, but the City wants to make our Industrial area look like Menlo Park, hence the disguise.

Some things the developer highlighted in their package include fully funding the construction of the Gateway Sign that Council has wanted in the industrial area for several years, money to Hayward Area Shoreline Protection Agency (HASPA) for signs or markers “as they see fit,” and $100,000 to the HUSD STEAM Showcase, which would fully fund the event for 5 years with half the amount and the rest possibly going to prizes for winners.

This international data center developer clearly has cash to splash

And did I mention it’s called STACK Infrastructure? The Council was pleased with that.

How About Those Amenities?

Councilmember Andrews pushed for on-site amenities less than she normally would have due to security concerns around a data center. There’ll be a 10 foot tall fence around the perimeter and the developer expressed interest in “protecting our clients.” But Councilmember Andrews did push for a food truck court somewhere and the developer said they’d look into it.

Mayor Salinas was essentially on the same page, “One of our visions for the industrial area is we really want to make it a destination place,” he said. And he feels that food will bring people to the area. Councilmember Bonilla, with his background both in tech and disaster management, stressed the importance of security, “I understand the sentiment, but you typically don’t want people going to data centers,” he said. “Data centers are highly secure.” He suggested moving the food truck court somewhere off-site.

Councilmember Andrews insisted that she was looking out for the data center workers’ interests. “Workers are not necessarily gonna care about a gateway marker sign,” she said. But, “they have very short lunch breaks” and would find value in food options close by. After some discussion about costs, she even conceded that once per month would still be something people could count on.

Councilmember Bonilla then played a game of rhetorical tag with City Staff. He asked for their assessment on whether or not the Community Benefits Package was fair, but Staff kept deflecting and insisted that it was the CEDC’s responsibility to decide if it’s good enough. “What’s right?” Staff asked, in regards to the package, “That’s a community question.”

Councilmember Bonilla then said that he personally felt that the beauty of the building was it’s own form of public benefit and the developer admitted it was “the most elaborate in the STACKS portfolio.” Staff chimed in, saying “We have beautiful data centers because of our industrial guidelines.”

Conversation then turned to decorative screens used to disguise the substation.

Councilmember Bonilla supported the screens for security, “Always good to hide your utilities in case someone wants to take out your data center.” But also highlighted that it was a good project to turn into an art piece. “This is a major gateway,” Mayor Salinas said, “I really want something… it really has to be beautiful. That’s the standard… Let’s make it better.” Mayor Salinas compared recalled an “ugly” data center in Newark by the Dumbarton Bridge—“Those are Facebook’s buildings,” said Councilmember Bonilla—and said he wanted to be able to “Go over to the Newark mayor and flex.”

“People have to drive in and think ‘That’s some incredible space,’” said Mayor Salinas about the data center nobody will be allowed into. “Gotta be better than Newark.” The plans will go to the Planning Commission in August or September and will not go to the full City Council unless someone appeals it.

El Pollo Loco Is How Old?

In an announcement that made me feel ancient, Staff highlighted the 20th Anniversary of the El Pollo Loco on the corner of Mission and Fletcher. It is apparently “the most successful restaurant in the entire franchise” according to Staff. Mayor Salinas insisted that the location used to be a Carl’s Jr when, in fact, it had been a Burger King prior to becoming El Pollo Loco—I walked there from Hayward High during my lunch break to buy $0.49 cheeseburgers for a special promotion—though I concede it may have been a Carl’s Jr. before that.

Also noteworthy is that if you’ve seen the inflatable H going around, be prepared for a 15 foot tall version that is apparently incoming. H-Zilla will be dominating Downtown events and the frontages of new businesses shortly, I’m sure.

Finally, the HEDC will probably be looking at the Downtown Specific Plan soon, with special attention paid to policy changes. “Are there things we should be looking at policy-wise,” said Councilmember Bonilla. An easy change Staff recommended is allowing restaurants and entertainment by-right—currently they require a Conditional Use Permit, which costs $2,000 just to apply for. So we’ll be keeping an eye on that as it’s discussed.