Barriers to overcome: Solano must jump hurdles to grow economically

Local business leaders got an earful of the same counsel they have heard for the past two years last week when a panel of real estate experts explained what barriers exist to economic development in Solano County. There are some policy issues to resolve and some physical hurdles to overcome.

There seems to be a solid supply of Bay Area firms looking to expand operations to the east, and that is where Solano's geographic advantage comes into play. Still, the desire will not manifest into new industry, new businesses, new jobs and new economic benefit if we do not address the critical impediments.

In addition to being right in the path of where growth will occur, Solano has an abundant work force that is well-trained and competent. But it also has some liabilities.

Four top real estate professionals spoke last Thursday at Solano Economic Development Corp.'s annual "Real Estate Round-Up" in Fairfield. They represented four sectors of that landscape: retail, industrial and commercial, residential and investment sectors.

Here, in their view, are the main obstacles to enhancing our communities' economic vitality:

•Traffic: First and foremost the interchange at Interstate 80 and I-680 must be fixed. And that, no doubt, will require a sales-tax increase to create matching funds to get federal and state money to do it.

•Housing: Cities need to provide places for workers to live.

•Red tape: Infill housing projects are often sidetracked by environmental reviews that are unnecessary or onerous.

•NIMBYs: Cities often allow capricious challenges where projects already comply with zoning laws and all city requirements.

•Ready-to-build sites: While most cities have identified land for industrial and commercial development, there remains too many obstacles for a company buying and building quickly. Streets, sewer and water supplies are not always available, and regulatory approvals take too long.

There are no surprises in that list. We have taken on these issues in this editorial space before.

But once again, our concerns have been validated by those who understand what stands between us and better times ahead.

State of the market: Real estate experts weigh in on county climate

By Tom Hall/Staff Writer

Solano business leaders got together Thursday morning to hear about the condition of real estate in the county.

What did they hear? Things are good, but could be better.

Veteran industrial and office property broker Brooks Pedder of Collier's International said Bay Area firms looking to expand operations are moving through Solano, having already saturated Benicia and Fairfield and are headed east.

"Dixon and Vacaville are positioned to capture that business," Pedder told several dozen area business leaders at the Solano Economic Development Corporation Real Estate Round-up in Fairfield.

He said a big barrier in Vacaville is a lack of improved sites ready for a business to move into. The biggest issue, though, is the Interstate 80-I-680 interchange.

"This has got to be No. 1 priority," Pedder said. "We've got to get this interchange resolved."

Jose McNeill, the portfolio manager for the California Public Employees Retirement System, was also on hand. He said the pension fund has been selling a lot of its real estate holdings - the opposite of what those in the private sector have been doing.

"That's the fun of CalPERS," McNeill said. "We're playing the biggest Monopoly game in the world with real estate."

McNeill said CalPERS has been working to diversify its holdings, shifting portions of its retail and industrial investment to international real estate and other areas.

McNeill also said that while the retail boom in Solano County is great, the effect on employees of those new businesses has to be looked at closely, citing rising home prices and a falling affordability index.

The portfolio manager also briefly addressed the "housing bubble," saying he didn't think it would burst, but admitting it's unlikely it will continue to expand.

Dave Dolter, the vice president of planning and entitlements for Centex Homes in Northern California, also warned the business leaders about the growing affordability gap.

Dolter gave statistics revealing that median home prices in all seven Solano cities increased more than 17 percent over the past year, including 20.8 percent in Vacaville and a whopping 30.5 percent in Fairfield.

With that growth in cost, the housing affordability index in Solano is at 30 percent - lower than it has been in decades, Dolter said.

Dolter said several things need to happen at the state level to address the area's housing shortage and the escalating prices, including a streamlined process for environmental approval on infill projects, restrictions to legal challenges made against permitted projects, enforced long-term planning for cities and making affordable housing a statewide responsibility.

"My buyers subsidize that, and that's not fair," Dolter said of affordable housing units.

Tom Hall can be reached at vacaville@thereporter.com.

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