The Daily Caller

The Daily Caller

California city gives new businesses a tax holiday

San Leandro, California understands incentives.

In an effort to attract new businesses and compete with the tech hubs of Palo Alto and San Francisco, the suburban manufacturing city has promised to waive business license fees for the remainder of 2014.

“There is a tremendous amount of capital that is flowing into Silicon Valley and San Francisco and we are trying to get some of these businesses to consider San Leandro,” San Leandro Mayor Stephen Cassidy told The Daily Caller News Foundation.

Not only is the neighboring city offering to waive the business license fee for companies that move to the city, which is about $300 for small businesses, but the cost of living in San Leandro is significantly less than in other nearby cities.

“Many businesses in San Francisco and elsewhere are getting priced out because the commercial real estate prices are so sky high…They are looking for alternatives, especially advanced manufacturing companies that need the space,” explained Cassidy.

He estimated that the commercial real estate prices in San Leandro are anywhere from one third to one half less than in San Francisco and parts of Silicon Valley.

According to an Apartment Guide study, the  average rent for a 700 foot one-bedroom apartment in the San Francisco-Oakland-Fremont area is $1,776. In San Leandro, depending on the area, it will cost residents around $1,000 to 1,400 for an apartment of a similar size.

Espen Sivertsen, the CEO of the 3D printing manufacturer, Type A Machines, told TheDCNF that San Leandro’s comparatively low cost of living was one of the factors that incentivized him to relocate his company’s headquarters from San Francisco to San Leandro.

“As we are growing I have to start thinking about where would be a good place for my employees to live and of course the cost of living in San Francisco is pretty high,” noted Siversten.

But in a region where state-of-the-art technology is expected to be accessible to businesses big and small, San Leandro’s tax holidays alone would not be enough red meat to pull entrepreneurs from the tech Meccas of the Bay Area.

In 2012 the city introduced the fiber loop or Lit San Leandro. This allows for an internet connection 2,000 times faster than the average U.S. connection and ten times faster than the Google fiber network being constructed in Kansas City. And for businesses that need even a quicker connection, the fiber loop can move up to 100 gigabits per second.

Some of the companies that will take an advantage of this high-speed connection will work on the second floor of a renovated Chrysler plant, spanning 300,000 square feet.

The city has more than one idle manufacturing plant, noted city council member Michael Gregory. But as companies catch wind of the available space and affordable real estate prices, the once doormat plants are becoming active again.

21st Amendment Brewery is one such company that plans to set up shop — it recently announced plans to build a massive 95,000 square foot brewery in a former Kellogg’s Cereal plant.

Gregory told TheDCNF that San Leandro’s business initiatives are part of an overall effort to attract graduates from Stanford and Berkeley who cannot get the space they want or a place they can afford in San Francisco, but need high speed internet and the amenities of a big city.

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