Cultivating growth: This area has obvious charm for new businesses, but cities can't afford to be complacent, panel says Cultivating growth: This area has obvious charm for new businesses, but cities can't afford to be complacent, panel says (January 28, 2004)

By Rebecca Wallace

Almanac Staff Writer

With its penchant for innovation and location in a highly desirable region, the Menlo Park area has many elements to help pull it out of the recession, a panel of speakers recently told a crowd of about 125 city officials, residents and business people.

But even the finest gardens need tending. And it wouldn't hurt to be extra-nice to the worker bees every now and then.

For a city, the key to adding new jobs and recovering from the slump is enticing new businesses, the three speakers agreed.

Silicon Valley has traditionally been an excellent incubator of new enterprises, and is especially open to employees of existing companies going their own way to create spin-offs, Junfu Zhang, a research fellow with the Public Policy Institute of California, told the crowd, which was at the Stanford Park Hotel in Menlo Park on January 6 for a Menlo Park City Council "economic forecast" session.

It's typically easier to create spin-offs here than in other areas, he said, adding that people in Boston who start them are more likely to be sued by their former employers than those in Silicon Valley.

In addition, Mr. Zhang said that more than 40 percent of biotech firms are founded by university professors, so this area's proximity to Stanford University and the University of California at Berkeley, among other schools, is a boon.

In the midst of these advantages, though, city officials and residents must assure that the area remains just as welcoming, the speakers said.

Residents need to look beyond their own neighborhoods and realize that they are part of a city and region, said speaker Stephen Levy, director of the Center for Continuing Study of the California Economy.

People who are reluctant to allow development in their immediate area would do better to see growth as a balance, Mr. Levy said: one area takes some of the development, and another neighborhood absorbs other projects.

Unfortunately, though, residents and officials can nitpick over aspects of a new project and lose sight of how it could help the area's economy, he said.

"We'd rather fight over an extra story or two units because we don't understand how it's connected to economies," Mr. Levy said.

While preparing for growth, cities and regions also can't neglect basic, ongoing needs: roads, schools, public transit and particularly affordable housing, the speakers said.

The third speaker, Collaborative Economics president Doug Henton, pointed out that companies old and new need a diversified work force. For every executive there's an administrative assistant who can't foot the bill for a mansion, he said.

After the discussion, Kelly Fergusson, a member of Menlo Park's Planning Commission, said she felt encouraged by what she heard.

"We have the ingredients for economic recovery. We have a fabulous industrial area, and opportunities for companies," she said.

Menlo Park City Councilwoman Mickie Winkler said the message about making the city welcoming for businesses made one thing clear to her: that the city needs to streamline its permitting process.

Councilman Paul Collacchi, though, said larger economic trends tend to be more telling about the success of an area than what local policymakers do to make an area "hospitable."

Citing one example, he said that while Menlo Park has been very economically successful in the past, "We've always had a housing shortage."

The event was organized by David Johnson, who was hired last year as Menlo Park's business development manager. Several council members said they hoped he could help make the city more welcoming for businesses by serving as a liaison. Mr. Johnson has also been working on a "Shop Menlo" campaign in hopes of encouraging residents to spend dollars in town and boost sales tax revenues.

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