Petaluma leads Sonoma County in economic development
As his lease expired and Aseem Das was forced to move World Centric, the company he founded, from its Palo Alto location in 2013, he considered where to go.
“You could go to the East Bay, where you would get office space but not a very good quality of life,” said Das, whose business makes compostable plates, cups and utensils. “It’s just kind of strip malls and tract houses.”
A few employees lived in Sonoma County, and they encouraged Das to explore the option even though he didn’t know anything about the area. He liked what he found in Petaluma, especially because it offered affordable commercial office space compared to other places around the Bay Area and had enough industrial acreage to be able to set up manufacturing in the future. But that wasn’t what sealed the deal.
“It was a great quality of life,” he said. “And there are lots of like-minded businesses in Sonoma County which are organic, food-related - and a great sense of community. And all those things would be a good fit for World Centric and its mission and values.”
His decision was one example of many in recent years that have made Petaluma the leader in economic development in Sonoma County. It has one of the lowest unemployment rates in the county - ?4.1 percent in March - and the second highest median household income, at $75,655 in 2015.
The business activity has rapidly reversed the fortunes of this city of almost 60,000, which was hit with a one-two punch at the turn of the millennium - fallout from the telecom bust of the early 2000s and the real estate crash some six years later. At its low point, commercial office vacancy rates were 40 percent.
Petaluma has now turned a corner. The office vacancy rate is down to 13 percent. Its sales tax receipts increased 8 percent to $12.4 million in fiscal 2015.
It has a revitalized downtown, soon to have a beer garden and food trucks, that is attracting businesses and workers in a wide range of fields including but going beyond the agriculture and food production industry that historically has driven the local economy. The top private employers include such companies as Lagunitas Brewing, Petaluma Poultry Processors and Clover Stornetta Farms.
The clusters of new and growing firms range from mortgage lending to bicycle designers, high-tech businesses to financial services firms. They have joined a diverse community that also includes the women’s yoga clothing producer Athleta Inc., outdoor equipment maker CamelBak Products and Ciena’s Blue Planet division, a telecom software provider.
“I think Petaluma is becoming a magnet for talent,” said Ingrid Alverde, economic development manager for the city.
A list of recent tenant activity by developer Basin Street Properties offers a vivid snapshot of the diversifying business climate. In 2015, digital ticket firm Vendini Inc. and financial tech provider FIS Mobile both arrived from San Francisco to open new satellite offices. First California Mortgage expanded its operations. East Bay restaurant Sauced BBQ & Spirits opened a popular location downtown and two longtime food stalwarts, Amy’s Kitchen and Clover Stornetta, both expanded.
This year, a mortgage lender, Premier Lending, opened a new office at Theatre Square, Summit Funding expanded into larger offices at Petaluma Marina Business Center, Headlands Asset Management moved north from San Rafael into a larger space and Golden State Wealth Management opened a new branch.
A major driving factor? “It really does come down to location, location, location,” said Ben Stone, executive director of the Sonoma County Economic Development Board.
Petaluma is able to take advantage of its location less than 35 miles from San Francisco. Local traffic congestion and housing costs are less. Executives and personnel can readily get to the city as well as major airports and highways.
For example, Revive Kombucha has seen benefits in its move from Windsor to Petaluma late last year, especially as it has now expanded into 20 states. Sean Lovett, owner and CEO of the beverage company, said that freight providers did not want to come pick up products in Windsor and would charge extra to do so.
“It was strategically close to the highway. It saved us money and hassle,” Lovett said of the move to Petaluma.
The other benefit is that its commercial rents are much cheaper, especially compared to Marin County. For instance, top-end office space in Petaluma is going for $2.01 per square foot compared to $4.32 in Mill Valley, according to Cushman and Wakefield, a real estate brokerage firm.
There also is a variety of acreage available, such as a healthy offering of industrial space. That was an attraction for Labcon to move from San Rafael to Petaluma in 1994, especially as it wanted to use solar electric panels to aid in its manufacturing of pipette tips, the pointed, slender devices used in medical research and lab facilities.