Tracy Struggles to Pull Tech Jobs Over Altmont Pass
With its key location on the edge of the Bay Area and plenty of inexpensive land, Tracy would appear to be in position to attract some technology-based economic growth. And the city has inched into the tech arena, but it remains primarily a bedroom community.
Tracy need look only 30 miles over the Altamont Pass to Pleasanton and Dublin, two cities in the tri-valley area of Alameda County, to see the prosperity that high-tech businesses can bring. Closer to San Francisco and San Jose, Pleasanton and Dublin attracted office parks and some heavyweight tech companies in recent years, and the boom continued until the recent economic downturn.
Tech industries may have temporarily slowed, but Tracy officials are continuing their quest for office-based, high-tech jobs to keep residents closer to home. Even though tech has not taken off in San Joaquin County, where Tracy is located, the area has become a prime bedroom community for Silicon Valley workers willing to endure long commutes in order to own a home. About one-third of the motorists driving over Altamont Pass toward the Bay Area each day are Tracy commuters, according to Mayor Don Bilbrey.
The commute from Tracy to San Jose is about 70 miles, and because of congestion it can take up to two hours each way. The ACE commuter train provides an alternative but the one-way trip still takes nearly two hours. The city is attempting to balance the number of housing units with more commercial and industrial development to provide jobs closer to home. And even if the region is entering a recession, Bilbrey noted that Tracy still has assets to offer companies seeking to cut costs.
Tracy's economic development in recent years has focussed on its location — close to the Bay Area and near Interstate 5 — and many jobs that located in Tracy are centered around warehouses and distribution. But with continued affordable housing development has come new retail and commercial businesses also.
In recent years, the city has added about 3,500 new residents each year, according to Economic Development Director Andrew Malik. The city currently has a population of 61,000, up from approximately 35,000 in 1995.
Housing growth may slow in future years because Tracy voters adopted building permit caps in November 2000, allowing, at most, 750 new homes a year (see CP&DR, December 2000, April 2000). But the measure's impact will not be felt for several years because 5,880 homes approved before the measure passed can still be built.
Mark Connolly, a Tracy native and member of Tracy Regional Alliance for a Quality Community, which backed the housing cap, said that trying to attract economic development "is a good thing as long as residential developers don't sue over water." In recent years, homebuilders have sued commercial developers over water, he said, and water remains an issue because the city has already approved so many new homes without a good water plan in place.
To attract development, the city boasts of plenty of land and low development costs. Last year, Bilbrey met with businesses that were comparing the costs of developing in Santa Clara ($84 per square foot) versus the costs of developing in Tracy ($6 per square foot). Even with the economic slowdown, the mayor believes that economics will push Silicon Valley business in his city's direction.
"It may slow development here a bit, but I think it's just a temporary period
of time," Bilbrey said.
Tracy is getting the message from tech companies that the city does not offer the amenities they need, such as entertainment and conference facilities, said City Councilwoman Suzanne Tucker. But she added, "There's starting to be a lot more interest. We're preparing."
Already, the city has snagged its first high-tech prize, albeit a small one. Malik and the mayor tout Moore Technology, which recently moved to Tracy from San Jose, as an example of the high-tech related companies that can be expected to lead the way. Moore Technology manufactures film that goes on silicon wafers, and employs about 50 workers in Tracy. Bilbrey said the city is in discussion with several other tech companies as well. Tech manufacturers, rather than researchers, are expected to find Tracy attractive, Malik said.
Meanwhile, the city's first Class A office project is being planned, offering the city's best hope for high paying office and tech jobs. Called the Gateway Project, the 6 million-square-foot project is proposed by Sacramento developer Pifferetti and Associates on 538 acres. The property must first be annexed into the city. The project is not expected to gain the necessary approvals and begin construction until 2003. Bilbrey expects the project will include two-story to eight-story buildings and a golf course.
The city is also trying to address the jobs-housing imbalance by applying for state funding for "opportunity zones," designed to lure additional companies through tax breaks and tax increment financing, much like redevelopment districts. Some of those funds may be used on the Gateway Project. The incentives are part of the efforts of the Inter-Regional Partnership, created between five Bay Area and Central Valley counties to address growth issues (see CP&DR, March 2000).
Two other projects bring the promise of higher paying jobs to Tracy. One is planned by the Catellus Corporation, a major developer of commercial and industrial projects, which owns property northwest of town that is within the city's sphere of influence. A mixed-use development, including office parks and research and development facilities is being planned, although nothing has been submitted to the city yet, Malik said.
A second project called Tracy Hills is also in the planning stages. The 5,300-acre project changed owners earlier this year, and is now owned by Sacramento-based AKT Development Corp. The land is approved for more than 5,000 homes, and light industrial, retail and other uses, although development appears to be several years off.
The previous owner dropped plans for a tech business park at Tracy Hills, said Niki Doan, assistant project manager for AKT, which instead is endorsing tech elements of the Gateway and Catellus projects.
Other projects on the horizon in Tracy include flex-office space, described as single-story buildings that can be used either for offices or for manufacturing and distribution. The first such project under development, the Edgewood Corporate Project, is only 40,000 square feet, but may grow if the demand increases, Malik said. Financial and insurance companies are expressing interest in using the space for call centers, he said.
Andrew Malik, Economic Development Director, City of Tracy, (209) 831-4104.
Don Bilbrey, Tracy mayor, (209) 831-4103.
Suzanne Tucker, Tracy councilmember, (209) 831-4103.
Mark Connolly, Tracy Regional Alliance for a Quality Community, (209) 836-1237.
Niki Doan, AKT Development, (916) 383-2500.