Santa Cruz Observer

Bezos a white knight? Don't count on it

By TOM HONIG

I was at a journalism conference in 1999 or so when somebody in the audience asked a Los Angeles Times panelist why the Times had expanded into the online world and exactly what The Times had planned.

His answer was pretty good: "It's just like when you play Monopoly and you land on Marvin Gardens. You buy it even though you don't know what you're going to use it for."

That insight came to mind this week when Jeff Bezos found an extra $250 million in the pockets of his jeans and purchased The Washington Post and a few other Post properties.

Since then, the chattering class has taken hold. (Although the funniest reaction came from The Onion, right here, which reported: "Bob Woodward Gets New Job.")

Ever hopeful of a white knight, some journalists say that it's Bezos's way of saving good journalism, arguing that the future of newspapers resides with civic-minded billionaires in place of the traditional civic-minded millionaires of a generation ago.

Skeptical observers say that Bezos has an agenda. After all, if his motive is philanthropic, why didn't his foundation make the purchase? Is he trying to increase his political influence for his own economic interest? Does owning the Post help Amazon in some particular way?

Like every question about the future of journalism, no one -- including Bezos -- can know how it will all shake out.

But it's worth remembering this: what happens at the Post -- or The New York Times or any other paper of national influence -- probably won't affect the average American newspaper. For community newspapers across the counry, there's no Bezos bailout on the horizon.

The problem your average newspaper faces actually doesn't involve content -- or at least, not directly. The problem is that the advertising revenue that newspapers once enjoyed has gone elsewhere: to Google, to Facebook and especially to Craig's List. Without that ad revenue, news staffs have been cut, never to return. And without adequate staffing, content suffers and the audience (once known as the readership) goes away.

Even Bezos can't fix that.

 

Good for business AND for the environment?

Second in a series

By TOM HONIG

One of the most frustrating aspects of life in Santa Cruz is how strident public discussions can become. I've always wondering why -- in a small and relatively homogenous community -- differing opinions can get some people so damn mad.

Maybe it's actually because it's a small community. Past political allies can show up in current debates on opposite sides -- and there's nothing like the scorn that  that engenders.

But beyond that, it's unclear to me why some of our political debate -- the desalination plan is a good example -- elicit accusations of cronyism and even corruption.

Nowhere is this conflict felt more strongly than in debates over environmental policy. The basic one pits business interests versus environmental protection. The age-old accusation in Santa Cruz holds that what's good for business is probably bad for the environment.

On the recent trip to San Luis Obispo by 69 local community leaders (see the earlier article), that issue stood out front and center. Or, as a representative of the San Luis Obispo Board of Economic Vitality put it, "We decided that we needed economic vitality, but we also need environmental protection." SLO County Supervisor Adam Hill said it this way: "There is a link. I ask people, 'Do you like the beautiful green hills and our greenbelt?' Well, they don't come free."

Most of the visiting Santa Cruzans -- across the spectrum of business, non-profits and government -- seemed to agree. Now the question becomes whether there's community agreement -- and political action --when specific issues come up.

Cabrillo College President Brian King, the prime motivator of the trip, says he's optimistic. "I think it was very powerful to get a key group of leaders together for an extended period of time. A bit removed from home, everyone had an opportunity for extended conversations that can be so difficult to have with our busy lives. Hearing about successes in a similar community with challenges we serve was very encouraging. It's easy to think the hard problems are impossible to solve, and hearing solutions that have worked can be very empowering." 

Coming up: More reactions on business and environmental protection.

Santa Cruz leaders encounter San Luis Obispo

By TOM HONIG

Take 69 Santa Cruz County folks from a variety of businesses, school districts, government bodies and non-profits, put them on a couple of buses and what do you do with them?

This week, the Santa Cruz Area Chamber of Commerce took them to San Luis Obispo, where this aggregation met with leaders from similar walks of life to learn more about how another community -- somewhat similar to Santa Cruz -- handles the kinds of issues that people here do every day.

The San Luis Obispo trip was an idea promoted by Cabrillo College President Brian King, who looked at the trip this way: 

"We have an opportunity to learn much from San Luis Obispo, a community that is in many ways like us. We will have an opportunity to evaluate how some of their initiatives might work in our counties and cities. We will be able to test and temper our notions and plans with their experiences. And, we will discuss mutual problems and complexities with  them to explore solutions neither of us have yet imagined.

"However ... I believe that the greatest benefit will be the 30-some hours we will spend together getting to know each other better."

So did it work? In a word -- yes. Our group met with San Luis business leaders, politicians, school officials and others who are trying to figure out solutions to the same problems that exist here. One particular issue that reared its head time and time again was the question of how to balance economic vitality with environmental protection.

I'll follow up on that issue in particular in future articles. Also, I'll be publishing reactions and thoughts from those on the trip.

And as for the most obvious question: was the junket fun? You're damn right it was. No, it wasn't a party like the Merry Pranksters, but it served to remind the participants that Santa Cruz is blessed with community folks who are not only bright but also simpatico. It's nice to be reminded of that.

Is 'caring' an important political attribute?

By TOM HONIG

I've noticed some comments in various letters to the editor or on Facebook about how this candidate or another "doesn't care about" poor people ... or women ... or the elderly ... or some other group.

Sometimes you hear similar complaints from the right: liberals "don't care about" American exceptionalism or even that they're somehow not religious enough. (Take note: no one who's a non-believer could stand a chance in a national election.)

When did "caring" become such a political attribute? Does it really matter if someone "cares?" Does it matter if their religious beliefs match mine? I want people in office who are good at what they do. I want them to care about being competent. 

Here's the deal. Politics is largely about helping the highest number of people at a reasonable price tag. Of course, doing that isn't easy. But applying government services in an effective and efficient manner is what matters for any elected official.

Sadly, a lot of politicans don't measure up. What they do, instead, is convince certain favored groups that they "care." But every political decision -- like it or not -- has winners and losers. Barack Obama "cared" about unionized auto workers -- and the health of the Midwest economy -- so he fashioned a bailout of GM and Chrysler. But he didn't "care" so much about all those middle-class bondholders of GM and GMAC, and they lost all their money.

Maybe he was right. But "caring" ought not enter into it.

Locally, the biggest issue of the last year was the Coastal Commission vote to deny the redevelopment of the La Bahia Hotel. Led by local county supervisor Mark Stone, the commission "cared" about the impact on the environment. But does that mean that Stone and the commissioners "didn't care" about people who need jobs? Did Obama "not care" about jobs when he opposed the Keystone oil pipeline? Does Gov. Jerry Brown "care" more about prison guards than he does about teachers?

These are all tough issues, and reasonable people can disagree whether the decisions were good ones. But "caring" is hardly the touchstone. It's about effectiveness and good policy.

"Caring" is great in our personal lives. In politics, "caring" sometimes means taking care of one favored group while shutting down another. Give me an official who's competent and makes good decisions. Leave the caring to my friends and family.

Desal and UCSC growth -- a student environmentalist's perspective

EDITOR'S NOTE: Recent posts have focused on growth at UCSC and the attitudes of some longtime residents. The following piece is written by a current student at the university -- a self-described environmentalist who has a unique and worthwhile take on an important issue -- water, UCSC growth and how local politics should function.

By ROBERT SINGLETON

I am first and foremost an environmentalist. Before I came to Santa Cruz to attend UCSC, I had worked for a progressive, slow growth, non-profit in my own hometown of Santa Rosa. During that time I fought against development of all types. I helped to pass Urban Growth Boundaries, enact slow growth measures, fought against ridge top development and even helped elect a slow growth majority to the city council. All of this I firmly believed in, and still do for the most part.

However, I have always attempted to be practical when dealing with local politics, and I would say that I am one of the few. I have definitely had long conversations with people I see eye to eye with 97% of the time, only to fight about something minor like prospective green building standards, or the phrasing in a campaign leaflet. To me these encounters are all part of the process, a process that albeit painstaking, is absolutely necessary for the proper adoption of policy.

In Santa Cruz this decision making process is very similar, there are those who stick to their ideological guns give hell or high water and then there are those like myself, who continually question, sometimes to the dismay of my peers, the stances of everyone involved. This has been my continual stance throughout the local debate concerning desalination. I have met the leaders of both camps, heard their perspectives and questioned their beliefs and assumptions, with rigor. In fact, I have felt more like an outsider looking in than I should given my previous work, but I can’t help but play devil’s advocate.

Given this experience, I have come to the following conclusions, some of them localized and unique to Santa Cruz, others transcendent and to some extent universal.

1. The Soquel Creek water district is in dire straights and must act quickly to develop a supplemental supply because conservation alone will not be enough to curb their current usage.
   1. Private well owners cannot be expected to reduce their consumption without some extreme coordination, and currently many refuse to even put meters on their wells, let alone take steps for major reductions.
2. The city of Santa Cruz is better off, but is operating on the same supply that it had during the 76-77 drought, despite its population having doubled. This has left the city particularly vulnerable to future droughts, even without considering the mandatory reductions needed to preserve fish habitat.
3. UCSC is going to expand, no matter how much local resistance it faces. It has a state mandate, an underlying agreement with the city for resources and the strong support of many a passionate and pragmatic individuals. Get over it.
4. People must be willing to overcome their hard-line stances on growth and be willing to compromise. It is a sad day when local progressives become the obstructionist conservatives they so typically despise.
5. If people on both sides are really serious about having a genuine political discussion than both must be willing to acknowledge one another’s opinion and more importantly, a common set of agreed upon facts. If factual disagreements remain, than a proper explanation must be given, with both sides championing a common explanation for the disagreement.

The 'Santa Cruz is great' argument

THIRD IN A SERIES

By TOM HONIG

Santa Cruz's singular economy is one where a lot of people have to leave the county in order to afford living here..

Is that sustainable? Is that what local people want?

Some say that it's just what you get. Local Larry Darnell wrote to me with a story about his wife and him:

"We did the hill.  Our children were in day-care after school. Our hobby was commuting. But we lived here. We would give a collective sigh of relief every night leaving Silicon Valley behind. (My wife) Judy decided first to cut off the commute and be available more as a parent - cut off the money. I decided second, partly as a result of the earthquake and the recession. We cut our pay and got our lives back off the road."

To him, the cut in pay was worth it: "Why would a manufacturer locate here? They wouldn't. I'm working now for the largest domestic classical guitar company in the U.S., in Ben Lomond. We hired five people this year."

 Darnell and others think there's opportunity:  "Considering the wealth and intelligence here, I would have expected someone to be able to come up with a thematic promotion whether locale related or arts related to build the area's draw...."

That's a theme seconded passionately by local businesswoman Adele Talmadge. "Support year-round tourism based on sports and lifestyle opportunities. Support the world-class sporting events that come and want to come to Santa Cruz. We need to not just be a 'cheap vacation' destination -- we are so much more. Engage tech companies from Silicon Valley to have satellite offices here by inviting young professionals to experience the Santa Cruz lifestyle."

This is the "Santa Cruz is great" argument. I know this argument -- I've been here for 40 years. But there are others who would like to see change -- and it has to do with making local government work better.

NEXT: There's gotta be some changes made. 

Santa Cruz's strange economy

First in a series

By TOM HONIG

Santa Cruz has a very strange economy.

Those of us who live here are used to the vagaries of life in Santa Cruz -- high housing costs and low wages. Dramatic natural beauty and congested roads that would make a Southern Californian cringe. And here's another one: a small town atmosphere in a downtown that has some big-city social issues.

Most of us notice these contradictions, but sometimes it's nice to have someone from the outside give us some perspective.

The Santa Cruz Business Council featured a speaker last week by the name of Jeffrey Michael, an economist from University of the Pacific. Details of his talk are right here in a Sentinel story by business writer Jondi Gumz.

He portrayed a strange local economy: a total of $13 billion in personal income, but only $4.2 billion coming from local wages. (In fact, he said in most places, local wages are a major factor in the economy. Not here.)

What that means is that Santa Cruzans make their money either by commuting (that's the young people) or by investment income (older people.) The political implications are profound, and explain why there's a deepening divide in the political dialogue locally. Older, wealthier folks are happy in their living situation, and don't really care that much about jobs or growing a healthy local economy. Younger, more struggling people in their early working years would love not to commute over the hill; they'd rather do what the older folks do -- stay here.

Essentially, the economy boils down to this: Santa Cruz is a bedroom community of San Jose. People may not like to admit that, but it's true. 

(NEXT: The implications of our contradictions.)

Retail report is about data and information -- not one man's view of Santa Cruz's future

LAST IN A SERIES

By TOM HONIG

I've noticed something interesting when the matter of Robert Gibbs' Retail Market Analysis comes up. (See the first three articles in this series for a summary.)

While some business-oriented folks look first at his reporting of $1.3 billion in spending that's leaving Santa Cruz, others are fixated on his recommendation to make Pacific Avenue a two-way street.

Hey -- that's a big deal all right, but it's merely one of his recommendations. And here's the key part -- he's not telling anyone to do it. He's merely commenting that if it happens, there will be a likely result.

That's the key to understanding this -- and other consultant reports that come into Santa Cruz. The Gibbs report is about data and information. This group or that group might not like what he has to say, but that's not the point. It's data. And it should be the basis of our decision-making.

Essentially, this report can form the basis of a cost-benefit analysis. It's highly unlikely that City Council members will adopt or reject every single recommendation. Some recommendations will make sense (and win approval from the community). Others won't.

Some streets need to be realigned. Directional signs need to be improved. Gibbs makes a case that bringing in chain retail stores is actually a green idea, because it could cut down on the number of automobile trips Santa Cruzans take over to San Jose.

Finally, locals need to realize -- if they don't already -- that cities in California (yes, even here in Santa Cruz) get the lion's share of funding from retail sales taxes. That's the system. To put up roadblocks to more and better retail simply means having to cut funding for city services and social services as well. No, we don't want one big box store after another. But not allowing retail development is, essentially, a decision to cut aid to those who need it most. Not to mention the local need for jobs.

Here's my final take on the report: it's good data and can provide a basis for some significant planning for the city's future. No one is suggesting that the city of Santa Cruz adopt the entire report in its planning.

But ignoring the report would be a drastic mistake. Rather, people should realize that it's research and data, not one man's opinion of what Santa Cruz should look like. That decision will be made locally, and it's going to be interesting, looking ahead, to see what the results will be.

Retail report -- what's next?

SECOND IN A SERIES

By TOM HONIG

It's enough to make a business person salivate: the new Santa Cruz Retail Market Study says that the city is capable of picking up some $237 million in additional sales annually just by changing a few policies and attracting new retail to Santa Cruz.

Also capable of salivating would be those who operate or support some of the many social services in town: that additional business would mean a lot more tax revenue for the cash-strapped city of Santa Cruz.

All this is part of a report by retail expert Robert Gibbs, who has completed the study for the city recently and spent several days last week meeting with a number of business and local government representatives.

As described here earlier, Gibbs reported that a huge amount of local dollars -- as much as $1.8 billion annually -- is leaking over the hill to places like Valley Fair and Santana Row.

However, a number of Gibbs' recommendations are sure to make a number of Santa Cruzans sweat a bit.

--Item: Gibbs reports that much of the growth can come from chain stores in the downtown area and even more "big box" stores somewhere up on the Mission Street side of town. Certain segments of our population -- even mainstream Santa Cruzans -- aren't completely comfortable with the addition of chain stores. Yet Gibbs concludes that these chains would actually help support many of the locally owned retail shops now in business here.

--Item: It's hard for anyone other than locals to find their way around. It's been widely reported that Gibbs suggests changes to Pacific Avenue to make it a two-way street. He also has found that directional signs are confusing and the main shopping areas -- Pacific Avenue, Soquel Avenue and Mission Street -- are actually hidden away from visitors.

--Item: An old subject, well told: vagrants downtown. This is hardly a surprise to anyone in Santa Cruz, because vagrancy on Pacific Avenue has been discussed for years. But what isn't going to change is this: the County Jail, the County Hospital, the Homeless Shelter and a number of other services are all located in Central Santa Cruz. And people leave these facilities daily, so they're right here in downtown.

--Item: A large number of people work outside the county. Simply put: you make more money in San Jose than you do in Santa Cruz. And people shop near their workplace -- often more than they do at home. Until more jobs come to Santa Cruz, that won't change.

--And: There's a perception among large retail executives that Santa Cruz is a tough place to do business. Strong codes and stringent permitting has created that image outside of Santa Cruz. Local officials insist that red-tape has been cut and that the city is easy to work with, but that word somehow hasn't reached the retail world. Add to that a political climate in which some community members fight growth of any kind, and it's easy to see why that tough reputation is out there.

But here's where the Gibbs report is valuable. It's good information, based on solid research not easily refuted. The report -- available right here -- ought to be the basis of a good communitiy discussion.

No, we don't want to base every decision on its economic impact. But the city of Santa Cruz needs more revenue, and Gibbs has provided a roadmap on how to get there.

$1.8 billion left Santa Cruz last year -- Why?

FIRST IN A SERIES

By TOM HONIG

Three days after the Loma Prieta Earthquake in 1989, the late Mardi Wormhoudt, then Santa Cruz's mayor, walked with President George H.W. Bush along the quake-shattered Pacific Avenue Garden Mall, explaining to him that Santa Cruz's downtown was a collection of small, locally owned shops. It was a description that has been at the heart and soul of Santa Cruz's downtown for years, affirmed by a 36-member citizens committee that got together and envisioned how Santa Cruz would recover from the earthquake.

That small, locally owned ethic has remained in the minds of locals since then: an image that fits nicely with how many Santa Cruzans feel about themselves.

But 22 years later, that image just might be tarnished. Santa Cruz's Redevelopment Agency and the Santa Cruz Area Chamber of Commerce have sought the help of a national retail expert, and he's throwing some cold water on some old ideas about how Santa Cruz's downtown should look.

The consultant, Robert Gibbs, has visited this week, and his research has focused on some harsh realities that will get both the city's government and its citizens thinking about whether change is in our future. His entire report is here, on the Santa Cruz Area Chamber of Commerce website.

Let's start with perhaps his most significant finding: some $1.8 billion -- with a "B" -- left Santa Cruz last year because people are leaving town to shop. Here's what his report says:

"Although the study area had an estimated 2010 total retail expenditure of nearly $2.16 billion by the residents of the study area, only $312.3 million has been captured by retailers within the city of Santa Cruz (according to sales tax records) – retail leakage of 85.5 percent."

That means that residents of Santa Cruz are spending their dollars elsewhere.

Here's why that's a problem: the local economy is missing out. A bigger problem: revenue from sales tax is going to cities outside Santa Cruz. 

Former City Manager Dick Wilson for years worried that Santa Cruz is a low-revenue city, with city services suffering because of a lack of money. In California, local cities and counties depend mostly on sales-tax revenue more than any other source. And, sure enough, this year the City Council was not able to meet funding requests from non-profit, charitable organizations that look to the city for help.

Some might like Santa Cruz the way it is. Some no doubt appreciate that Santa Cruz doesn't have the chain stores that other communities have. But there's a cost -- and that cost is probably about equal to the $1.8 billion that's leaving the county.

What's the solution? Some fixes are easy: Gibbs recommends putting up better signs and maybe even changing the one-way configuration of Pacific Avenue. But others demand extensive planning and even some soul-searching. Will Santa Cruz make some basic changes and allow a different commercial mix in its commercial center?

The old-time image of Santa Cruz and the realities that we face may not jibe. And that's the discussion that the entire Santa Cruz community needs to have with itself.