Going Around In Circles Forever

by Mark Scaramella, November 26, 2008

Last Monday the Supervisors held their annual Economic Development Workshop. The subject of the day was "What role should the CEO and the Board have in economic development?"

After all these years and who knows how many hundreds of hours of workshops they still don't know.

CEO Office staffer Steve Dunnicliff solemnly informed the Board that although things look pretty bleak for Mendoland, local government should nevertheless continue to "encourage tourism, business and infrastructure."

To that end, the only end the County has, the County sponsors an "Economic Development and Finance Corporation." It's composed of mostly self-selected local bigwigs from the County's public and private sectors. Its Executive Director Don Balleck told the board that he and his heavy hitters have had "some successes" in recent years developing the local economy.

Brace yourselves for the blinding splendor of these free enterprise triumphs.

A gift shop in Mendocino Village got a loan to pay off the credit cards with which the business's woefully under-capitalized proprietors had launched their enterprise. They'd run up $88k on their plastic. The Mafia-like juice was, of course, killing them. The titans of local finance stepped in to refinance the debt over five years. Result? According to Balleck, "We retained two jobs on that."

Another success was a small food service operation, also located in Mendocino Village, that created two new full time jobs and two part-time jobs.

Saving the best for last, Balleck described a local doll maker who just got an order for 3,000 "organic" dolls from Whole Foods!

The EDFC, Balleck continued, is also working with Mendocino College on a solar installation which, if it happens, would employ local solar businesses. Someday.

Not to be outdone, Assistant CEO Alison Glassey walked the board through a complicated economic development planning process which, if implemented, would probably stop all commercial activity except pot growing in every area of Mendocino County.

The Glassey Plan would involve "all the stakeholders" in "goal setting" and "buy-ins" while attempting to "stop retail leakage" but encouraging cluster development and infrastructure as tax sharing agreements are finalized by committee after committee after sub-committee working on ways to pursue each goal.

Get that, Mr. Entrepreneur? Mendocino County is here to help.

"One goal will be tourism," explained Glassey, blissfully unaware that what she was saying, by any rational standard, was certifiably insane.

Continuing, Glassey, got into specifics: "We will be setting up a subcommittee which can meet on the coast and inland. Then there will be a steering committee to make sure assignments are made and carried out. Then we will prepare an economic scorecard. Then in March and April we'll be goal-setting. Then the subcommittees will take the goals and flesh them out. What does tourism promotion mean?" Glassey suddenly asked herself. "Or growing local entrepreneurs or whatever during this time the draft plan is being put together? Then we will finalize it at the end of 2009 which will allow enough time for additional public discussion at any point along the way. So that's the work plan. We will put dates on these later."

Her key point seems to have been "Or whatever."

Glassey's presentation was too much for lame duck Supervisor Michael Delbar.

"After listening to all this," Delbar remarked, "maybe we should start selling meetings."

Supervisor John Pinches illustrated the futility of the Glassey strategy by describing the recent liquidation of the Branscomb mill: "We just lost the County's largest private employer and $25 million in assessed value," said Pinches. "The new air quality regulations will require 39% of truck owners to downsize and an estimated 47% of them will go out of business. We have declining enrollment in our schools. If someone did a performance evaluation on how we've (the County) worked on the economy, we'd all be laid off today."

"The Branscomb mill is gone," continued a disheartened Pinches. "We were unsuccessful. With all of this organization we didn't have the ability to come up with $3 million to save a large business. It's not that much money. ... What we did in the past was a dismal failure. I hope we don't base our new plan on that. Maybe we can turn this mill loss into a wake up call the next time a crucial business needs some help. We need a strategy so that when we think it's right we can step in. Every city and the County have economic development organizations, but we're not prepared to help anybody — well, maybe a cookie company with one or two jobs. But we don't have the ability to help businesses with 20 employees or more. Maybe we ought to look at that. I don't know what the limitations are. But I don't want to see what happened happen again. We in government were not prepared to act."

Supervisor David Colfax took it even further.

"If we had been paying attention to financial information and not worrying about planning to plan to plan," Colfax began. "What you're saying, John, is an indictment of some of the institutions here that are vaunted in this document right here. Two houses on the hill in Anderson Valley have no problem getting financing, but they haven't had committees on committees and staff time on staff time devoted to trying to come up with some kind of act of will, the Nietzchian notion of will that actually accomplishes things. For 35 years we planned and we planned and we've kept people employed doing it. True. But you're talking about the efforts of these employment agencies which will have the same kind of success as poverty agencies had in eliminating poverty. We have kept a lot of poverty workers employed over a 50-year period. I don't like what I've heard here today. We had a simple example [the mill]. It was seen as a crisis. But everybody knew this was coming. Where were the mechanisms in place that address real economic matters with real economic thought? In Anderson Valley we can have a $9 million vineyard put up within a year. That doesn't have anything to do with these County committees. It may be of some value to the County, but it has nothing to do with meetings and committees and organizations. This is grasping at straws! Unless we pay attention to County finance and fiscalization of planning we'll just have this, just like we had 30 years ago. Where did it go? Wishing don't make it so. That's where we are. This is kind of a wish-world kind of thinking. It's really a waste of time, a waste of the board's time, a waste of my time. We should talk about real economic planning. If we couldn't even raise $3 million to save the mill we're in pretty sad shape. If you had a vineyard in Boonville come to the right people the $3 million would be there in hours because it would be seen as business. I'm sorry for the tirade, but I'm at the end of my tenth year on this board and we've been through this and through this and we are not getting any better at what we do. I'll do like Keith Olberman and look right at the camera and say goodnight."

During Colfax's lively on-the-mark assessment of the quality of the County's economic assistance was delivered against a backdrop of a snoozing Supervisor-elect John McCowen. McCowen's own droning delivery is weapons-grade boring even on those rare occasions when he has something of interest to say. He's one of these characters who only pays attention when he's doing the talking. Anybody else and off he goes to Winkin, Blinkin and Nod.

Ms. Glassey responded that if the Board wanted to focus on responding to business problems it could, but that was not what she thought she had been asked to do!

(Is there a translator in the house?)

Supervisor Kendall Smith pointed out that the mill was more of a private sector problem, and that if nobody in the private sector thought the mill was viable and worth saving, how could the County do anything?

A hazy consensus eventually emerged that the County should focus on basic infrastructure, not individual businesses or committees on top of committees and meetings on top of meetings.

Toward the end of the session, County CEO Tom 'I'm looking into it' Mitchell, who seldom says anything beyond terse promises to look into this, that and the other thing before this, that and the other thing disappear forever into his in-basket, felt moved to offer his own odd assessment of his adopted County.

"Businesses have told me that water, housing and employees are the problem. They won't invest because of that. We have a bad business plan. Sometimes there are bad projects proposed to raise money. We must ferret out the bad projects using staff time. ... There is a negative business environment in the County. If business people want to come here to do a project there's a hundred people that come out of the woodwork with different reasons to oppose the project. So even if you have a good project we have a reputation of having a negative business environment. Sometimes people don't understand the economics of what it takes to run a business. ... The cities don't do a good job of planning and then they throw rocks at the County. Everybody has a role to play here. We need engagement on broadband (internet). ... We need a commitment to infrastructure. We should invest in that, not pet projects. Mendocino County has terrific resources and terrific people but it needs to pull everyone together with a common vision. That's the real trick here. Engage the community in discussion. We need an honest dialog so we don't just become where business partners take shots at the County."

Mitchell didn't identify which specific projects were killed by the Out of the Woodwork brigades, but he did nicely identify the perennial whine of business people that nobody understands them and nobody loves them. Mitchell would probably be shocked to his Florsheims that it's his own senior staff that's the biggest obstacle to business development in the County, taking months and months to process even the simplest permit applications. As Colfax said, business occurs in Mendocino County outside anything the County does. Any sensible entrepreneur would take one listen to Mitchell and Glassey and immediately swerve around them, if they can.

Supervisor Jim "Double Dip" Wattenburger, now drawing full-time pay as both supervisor and as an employee of CalFire, only has a couple more meetings before he's a former Supervisor. Wattenburger adjourned the workshop with: "You summed things up quite eloquently, Tom. You had three times the thoughts I had written down."

Shucks, Jim. Tom probably only thinks faster than you do.

* * *

On Tuesday, County Planner Diana Hershey of the County's utterly superfluous Planning Team — planning is done in the planning department in every other county in the United States — was introduced to the Supervisors. Ms. Hershey launched into a lengthy, detailed and extremely technical description of the latest draft of the County's "inclusionary housing ordinance." (Translation: Affordable shelter for all. Theoretically.)

The Planning Team staff has devoted a lot of time to the ordinance over the last two years, meeting with local organizations and businesspersons on how to get roofs over the heads of the roofless.

Two years ago when the Board, of necessity, responded to the successful affordable housing lawsuit filed against the County by Legal Services attorney Lisa Hillegas, the board directed staff to come up with an "incentive based" housing ordinance instead of a "fee based" ordinance. Incentives involve developers get one kind of break or the other on permits or fees if they build some lower cost units.

But Ms. Hershey and her boss, Assistant CEO Alison Glassey, came up with a fee-based ordinance that requires developers of housing projects with ten or more units to either have a certain percentage of "affordable" housing or pay a 10% "in lieu fee" into a housing "trust fund" that would either be used to buy land or subsidize other affordable housing projects. The developers (who lately prefer to be called "housing providers") said that they wanted all the units in a given development to look the same from the outside so that the market rate units would not be devalued by being near an affordable one; the insides of these palaces, however, would be done on the cheap to achieve "affordability."

Ms. Hershey's presentation was as delusional as her bosses' since very little housing of the ten-or-more type is being built anywhere in the County.

Supervisors Pinches and Delbar thought the ordinance should be voluntary with no rules kicking in when proposed developments reached a certain size. Delbar said he couldn't understand how adding costs to a development would ever achieve "affordability."

Pinches said he thought that a better approach would be to grant fee waivers or discounts to housing projects which seem to be "affordable" and expedite their permit processing.

County Counsel Jeanine Nadel, however, said that the Supervisors' own General Plan Housing Element of 2004 required a fee-based ordinance.

Supervisor Colfax thought the whole discussion was pointless. Very few housing development proposals in Mendocino County are for ten or more units, he said, so the ordinance would have very little effect no matter what its detailed requirements are.

"We've spent an awful lot of time on this," said Colfax, diplomatically adding, "It's been good work by good people." But it's not a very big or useful tool. Streamlining the process, alternate methods of building, green housing, etc. might provide an increase in housing stock. These are the things we have to address. ... This is not a good way to be spending our time. We should work on more productive tasks. ... It's pointless to argue about an ordinance that has no teeth, and will not have any effect. Let's just accept it and be done with it. ... This is not worth the paper it's printed on."

Even Supervisor Smith, who seemed to like the inclusionary housing concept, wondered if the ordinance was "going to create change or just be a pro forma document to meet state requirements."

Ms. Glassey herself was suspicious about the effectiveness of such ordinances.

"We don't see an inclusionary housing ordinance as a major tool to achieve affordable housing," she said.

A Ukiah man named Andrew Nickel told the Board that they hadn't done any analysis of the economic impact of the ordinance. "What will it cost?" asked Nickel. "There are already lots of costs for land, permits, infrastructure, utility hookups, construction, financing... It can be drawn out and expensive. This adds additional cost. How many people will be pushed out of affordability if the market rate is raised to get a few affordable units? It's a Catch 22."

A frustrated Pinches finally tried making a motion.

"I'm not going to adopt something that means nothing. I move to deny. Come back with a strictly voluntary ordinance with the 2009 Housing Element."

An equally frustrated Colfax replied, "This is making a travesty of whole process. It has to be done. It's required by the state. Why look more foolish by voting down something the County Counsel recommends?"

Other Supes made other motions for minor changes in the language, but none got a three-vote majority.

Colfax tried again: "Enough is enough. We get the point. We don't like a particular part of this. It is ludicrous. Let's get this off the table and be done with it. Please! Let's get this accepted as ludicrous as it is. Let's not be going around in circles forever!"

Supervisor Wattenburger then suggested that they water down the draft even further by reducing the in lieu fees from 10% to 2%.

Supervisor Smith disagreed saying, "Just changing the percentages disrespects the process. We should go forward as is."

But the reduced fees idea won the day. The watered down ordinance, the version the supervisors had just described as pointless, was approved 3-2, Colfax and Smith dissenting.

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