Speech was given on May 12, 2016 at Leadership Contra Costa 2016 Graduation Ceremonies, Walnut Creek by Jeffrey S. Weil, Executive Vice President, Colliers International.
Linda, Marcie, Jay and especially all of the 2016 Leadership Contra Costa graduating class, thank you for inviting me to speak a few words to you today. As John Quincy Adams once said, “If your actions inspire others to dream more, learn more and become more, you are a leader.”
We are going to spend a few minutes discussing some of the larger challenges Contra Costa leaders face now and over the next 10 to 20 years. We will touch on specific members of this graduation class as possible future changes might affect your industry and what you do.
Lastly, we will talk about some of the opportunities facing us in Contra Costa and some of these opportunities I think you will agree are very, very exciting.
Brian Tracy, a famous motivational speaker once said, “Leaders think and talk about the solutions. Followers think and talk about the problems.”
Several of the biggest challenges we face, this class spent today hearing from the County experts, so we will just briefly touch on these.
Housing – a huge shortage, not enough of most housing types, way way too expensive – just the cost of a permit to build a house can cost $75 to $125,000 and that is not including land, other soft costs or the actual construction costs. There are many states in the U.S. where the average price of a decent house is $150 to $200,000, yet, here in the Bay Area – forget it! Apartment rents have skyrocketed, we are tens and tens of thousands of housing units behind and with Not In My Backyard mentality, the years of approval processes needed, the high price of land, our leaders have a challenging task ahead.
Hand-in-hand with this is transportation. Just imagine if we all stepped into a time machine, and it is now the year 2036. The sun is shining, we have Bart going out to Brentwood and down the I-680 Corridor all the way to San Jose. We have two more Bart tubes built underneath the Bay – guess what, these are all 20 year projects and the only way this can happen by 2036 is if we start these projects today.
Tolerating longer and longer commutes – it seems there are almost daily big rigs that overturn somewhere on our Bay Area highway system to totally screw things up. Gas may go back to $4 or 5 a gallon, so commuting will get way more expensive as well.
Complaining about long commutes is an interesting phenomena. Way back in 1982 I represented AT&T in the relocation of their regional offices out of San Francisco to a million square feet in Pleasanton. They had employees living at the time in Pleasanton who when they found out about the move, went to the San Joaquin area and bought three times the house size and kept their 45-minute commute. We choose where we work and where we live, not the government. Out here on the I-680 corridor we have over 3 million feet of vacant Class A office space at rents half or one-third what San Francisco is charging, and we barely get any Transbay relocations. Want to lower your commute, let me move your company to Walnut Creek, Concord or San Ramon or heck, if you live in Oakley, let’s move it out there!
Water – We got lucky this year, what about the next dry cycle, what reservoir expansion plans are underway, and unless population stops growing, which it won’t, how do we keep up?
Pensions – Just our State of California pension system is $180 billion dollars under water, $1.3 trillion nationally for just the State system and we are only the #16 worst state. Add to that cities and counties and we are leaving our children and grandchildren a whooper of a problem that we keep just sweeping under the rug.
Downtown Walnut Creek now has a half dozen residential over retail developments under construction, and the national trend is live, work, play, and not drive. Many millennials in San Francisco don’t even own a car and take Muni, Bart or Uber. But we in Walnut Creek do drive and our parking lots are five years behind demand.
Downtown Antioch could use 2,000 nice residential units right on the delta which might start to turn around that City.
As General Dwight D. Eisenhower once said, “Leadership is the art of getting someone else to do something you want done because he wants to do it.”
“Those people who think they know everything are a great annoyance to those of us who do.” Isaac Asimov.
I’d like to spend a few minutes on some of our graduating class, what they do and how the future might impact them.
For the shopping center executives with Taubman Company, one of the industry leaders in shopping centers.
Today 50% of all retail purchases are influenced by information consumers find online. There is a convergence of physical and digital retailing, search online, buy offline, search offline, buy online.
Bill Taubman, COO of Taubman Centers, notes that the tenant pool is shrinking in general, but the tenant pool for restaurant is growing at a lightning speed.
One day facial recognition and Bluetooth will personalize the shopper experience the consumer will be linked to the stores and vice versa with customized specials, popping up on your smart phone while you shop.
To the law librarians, 30 years ago when I represented major law firms like McCutheon Doyle, the law library was a significant element of the facility, sometimes a work of art with bookshelves lining the walls – Now the Millennial barely knows what a book is, everything is digital, and more and more functions in law firms are outsourced, like IT, legal research and accounting.
For the business and real estate attorneys – Out in the suburbs, change has come slowly, but law firms in major cities have one or two office sizes, smaller offices, associates sharing offices, contract attorneys benching, and now powerful computer software that can do 70% of estate planning, other legal elements with the human attorney completing the clients’ work.
To the bankers – branches are changing, many millennials never go into a bank anymore and do their banking on their phone. Wells Fargo, for example, has shipped millions of square feet of banking jobs offshore to Indonesia and elsewhere. However, Capital One is opening up a new branch in Downtown Walnut Creek and F&M Bank will be building a beautiful branch at the Target Garden Center.
To the recycling coordinators, we will be needing you more than ever, our World’s population went from 1 billion 200 years ago to 7.4 billion today. We need to recycle way more than we are currently doing and I’d love to see what your industry predicts for 10 and 20 years from now.
For the CPAs – my mother Lillian Weil was a past CPA East Bay Chapter president, and I remember 45 years ago when she brought home her first calculator, she had paid $250 for it. It did addition, subtraction, multiplication and division, and that was it, but boy, she was excited. We outsource to India and elsewhere a great percentage of tax return preparation and computers are doing more and more thinking, but my mom always thanked the U.S. Congress for keeping the tax code complicated and ever-changing.
To the corporate security professionals. Wow! Bluetooth and technology has so increased security monitoring, residential and commercial, your phone can scan the cameras, be alerted for any intrusion. Not sure when Robocop will be a reality, but it is only a matter of time.
“Always remember that you are absolutely unique. Just like everyone else.” Margaret Mead.
Before I get into some of the opportunities we have here in Contra Costa, did you know that the most unobstructed view in entire North America is not Mt. Whitney or any of the great Sierras, but from the top of Mt. Diablo because without other mountains in the way on a clear day you can see for hundreds of miles.
We have the Concord Naval Weapons Station development, with 5,028 acres, 12,272 housing units planned, over 6 million feet of commercial space and 2,700 acres going to The East Bay Regional Park District.
In Richmond, UC Berkeley has a 40-year plan, starting soon on 300 to 400,000 square feet, but it will total over 5 million square feet of world-class laboratories and research facilities.
In San Ramon, Bishop Ranch is building San Ramon City Center, with 2.1 million square feet on 39 acres. 635,000 square feet of new retail, a 110,000 square foot City Hall and library now are under construction, a 169 room hotel, 488 residential units, 682,000 square feet of new office buildings and it will include a new movie theater complex and 100,000 square feet of restaurant space.
The 33 acre former Chevron Concord office complex will be torn down to make way for 375,000 square feet of retail, with 50 tenants including a movie theater, supermarket, restaurants and retail shops.
What other opportunities? Within ten years expect self-driving cars, but there will be years of transition while human driver cars interface, like when the Model T completed for road space with the horse-drawn buggies.
We are almost out of developable land in Contra Costa, so expect more conversions of obsolete older buildings to make way for new development. In Lafayette they will be tearing down a number of old wooden office buildings for new residential and this will be a reoccurring trend throughout the County for decades to come. Like Mark Twain and Will Rogers once said, “Buy Land. – They’re Not Making It Anymore.”
Drone deliveries are coming soon, order in the morning, on your doorstep that afternoon. UPS is already rolling out drone service in Rawanda.
Tech workers in their 20’s and early 30’s in San Francisco who love to go out to restaurants and party every night, spend all their money on rent and fun, will fall in love in their 30’s and 40’s, want to have kids and actually buy a house and settle down. Expect thousands of them to migrate to Contra Costa, some of them bringing their companies along with them.
We already are seeing net zero energy commercial buildings, during the next 10 to 20 years expect most new housing and commercial buildings to be energy-producers, not just zero net. They have window glass now that collects solar, and paint will also be giant solar collectors.
John F. Kennedy once said, “Leadership and learning are indispensable to each other.”
You have sacrificed time and other endeavors to be a part of Leadership Contra Costa. We applaud, congratulate and say thank you!