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5 Things Oakland Should Keep In Mind During the Tech Boom

Oakland Mayor Libby Schaaf penned a letter to Uber executives before they take over the Sears building in Downtown. In it, she urges the company to give back and understand the community.

(TNS) -- Oakland Mayor Libby Schaaf has been using a new word lately to describe her vision for the technology hub growing in her city: “Tech-quity.”

With Uber planning to open a 3,000-person office in the long-underutilized Sears Building in downtown Oakland, there is no turning back the tech tide rolling across the bay. Though only 3.1 percent of Oakland’s workforce is in the tech sector, that number is sure to grow as other companies follow Uber’s lead, seeking office space at a quarter of the cost of San Francisco.

The question is what kind of tech hub will Oakland become.

In a welcome-to-Oakland letter to Uber executives, Schaaf defined tech-quity as providing “equitable access to top-notch training and jobs for our residents and fostering our local technology sector’s growth so it leads to shared prosperity.”

It sounds like a noble goal, but it will be difficult to enforce.

In Uber’s case, the San Francisco ride-hailing company acquired the building in a private land deal, so it didn’t need government approval or tax incentives to buy the property. That left Oakland no leverage to enact a community benefit agreement, a strategy used in San Francisco’s Mid-Market neighborhood to compel tech companies to help out the community.

Instead of enforcing tech-quity through tax incentives or government mandates, Schaaf said, change will be more sustainable if companies “see it as the right thing to do.”

“Rather than thinking of it as enforcement, I’d rather see it institutionalized. The list of items in my letter was not a checklist of things for companies to do, but a menu. Ideas to stimulate the imagination. One size is not going to fit all,” Schaaf said.

Tech-quity will be the centerpiece of Schaaf’s state of the city address Wednesday, the next step in her bid to turn Oakland into a kinder, more inclusive tech hub.

That task will prove difficult, as Oakland’s leaders face a three-tiered challenge: They must simultaneously attract tech companies; minimize the displacement of longtime residents by a sudden influx of wealth; and find a way to make Oakland’s tech scene as diverse as the city itself.

Tech industry leaders, urban planners, activists and city officials suggest five techniques Oakland could adopt to achieve tech-quity:

1. Think outside the office

Unlike many tech companies its size, Pandora doesn’t have a cafeteria — on purpose. It wants its 1,000 employees to leave its downtown Oakland high-rise.

“There are no free meals at Pandora,” said co-founder Tim Westergren, whose streaming music company has been the core of Oakland’s tech sector for a decade. “The more amenities and things you provide around your office, the more it becomes this self-contained bubble and the less people interact organically with the community around them. And I think that’s very tempting for a lot of tech companies.”

To that end, Schaaf’s office has been introducing companies that want to serve food in their offices to local vendors.

Pandora employees also receive 40 hours a year in “volunteer time off” to donate to schools and nonprofits — another way to get into the community.

“It will behoove Uber to invest in the community,” Westergren said. “Use their resources and their voice and the podium they have to advance things that are important to Oakland.”

2. Exert leverage

As part of its “Twitter tax break,” San Francisco offered companies a temporary exemption from the city’s 1.5 percent payroll tax if they moved into the long-dreary Mid-Market neighborhood. The area has attracted commercial tenants, though the city lost $34 million in potential payroll taxes last year alone.

“The big danger is that Oakland has historically been so desperate for economic development that it may just give away all of its leverage in negotiating terms with new employers,” said Van Jones, a CNN commentator and founder of YesWeCode, an Oakland tech skills training program for low-opportunity young people.

Because of San Francisco’s tight commercial real estate market and Oakland’s growing appeal, companies may no longer need big tax breaks to come to the East Bay. But, Jones pointed out, businesses must often acquire permits and licenses from local government. Considering the tech industry’s general aversion to red tape, the city could find novel ways to offer incentives for certain behavior, he said.

“Government should have a fast track for companies that really want to be good neighbors,” Jones said. “And everybody else would get the normal, bureaucratic government treatment.”

For years, Oakland imposed fewer taxes and fees on developers or new businesses than neighboring cities. But as the flush times approach, it is considering an impact fee — a one-time payment from developers to get permission to build.

“This is a perfectly appropriate idea. But what is that number? And how will it be implemented?” said Egon Terplan, a regional planning director for SPUR, an urban planning think tank.

3. Expect public pressure

Media entrepreneur John Battelle expanded his NewCo festival — a sort of open studios for new tech businesses — from San Francisco to Oakland this year. Far more companies in the Oakland portion are “mission-driven,” he said, a reflection of the city’s long history of social activism. There, Battelle heard a constant refrain: “‘Keep Oakland Oakland.’ ‘Make tech in Oakland look like Oakland.’”

“If Uber had decided to move 3,000 employees into South San Francisco, there wouldn’t be a story about any of this,” Battelle said. “That in itself is a social pressure.”

Oakland is on the cutting edge of a cultural shift in which people increasingly want to work for a company “that is making things a little bit better rather than a little bit worse,” he said.

“Creating that expectation is what Oakland is doing right now by welcoming Uber in, but saying, ‘We have this expectation of you,’” Battelle said. “Now the question is, over the next 10 years, does Uber live up to that?”

If Uber or any company doesn’t live up to the city’s expectations, it should expect backlash. “This is still Oakland — one of the hotbeds of activism on planet Earth,” said Jones, previously a Bay Area street activist. “If they choose not to be good neighbors, Oaklanders will probably make them understand the folly of that course.”

Westergren’s Pandora has experienced some backlash — and it hasn’t scared him away.

“I like that our office windows have been broken once or twice,” he said. “That’s real life. The answer isn’t to build a big wall.”

4. Build atop parking lots

While it seems as if a trendy new restaurant opens in downtown Oakland every week, there are 40 acres of surface parking lots and vacant parcels there, according to a study by SPUR. That’s enough room for buildings that could house an additional 36,000 jobs and 19,000 residents without displacing any homes or businesses, according to the report.

Plus, the city can dangle this empty space as a carrot to big companies that want to move or expand in Oakland, said Oakland tech entrepreneur and philanthropist Freada Kapor Klein. She and her husband, Mitch Kapor, plan to spend $40 million over the next three years to help African Americans and Latinos get into the tech industry.

“The city could say to a company, you can build on that piece of land — if you build a coding camp there, for example,” Klein said. “We’re startup people. We like principles better than rules.”

5. Train locals

Oakland is among the most diverse cities in the country. The tech industry is under fire for its lack of diversity.

City leaders think they can bridge this divide by turning Oakland into something of an incubator for tech diversity.

The city “is trying to build a tech economy that people in Oakland can work in,” said Marisa Raya, a special project analyst with Oakland’s Economic and Workforce Development Department.

With the Kapor Center set to open next year — and Jones’ YesWeCode and similar organizations in town — that vision is taking root.

Last week at the Oakland Museum of California, YesWeCode brought together a dozen tech employers — including eBay, Lyft, Pinterest and Square — to form the YesWeCode Working Group, which is trying to diversify the technology workforce. The tech companies agreed to create 300 job-track apprenticeships over the next five years.

Such recruitment efforts are a way to make sure that Oakland’s tech scene doesn’t just poach skilled engineers already well-compensated in San Francisco.

“The basic trade of computer engineering is teachable in a relatively short period of time to people who have basic mathematical literacy,” Jones said.

In any other city in the country, the impending arrival of 3,000 high-paying tech jobs — and a potential of a boom yielding thousands more — would be met with unadulterated joy. But when Oakland leaders and merchants see how much of San Francisco has grown unaffordable, there is some trepidation.

Blue Bottle Coffee isn’t a tech company, but its supporters regularly laud it as a mission-driven, Oakland-grown success story. At the opening night of the NewCo conference in Oakland this month, Blue Bottle CEO James Freeman said he worries about how Oakland is changing.

“Most of our baristas live in Oakland,” Freeman said. “But how long is that going to last?”

©2015 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.