Local, state officials rally to help growing company relocate in San Rafael
CORTE MADERA — After 17 years of making environmentally and health- conscious personal care products in Marin County, EO Products seriously considered the better economics of taking the 40-person company to the East Bay, but the manufacturer is choosing to stay in Marin after an opportunity arose to convert a former Industrial Light & Magic sound stage to a much larger production plant plus local and regional economic boosters and a state legislator jumped in to help navigate permit processes.
EO Products (415-945-1900, eoproducts.com) in mid-May signed a 10-year lease for a 40,000-square-foot industrial building at 90 Windward Way in San Rafael. It’s double the size of the existing plant in Corte Madera. Pending the go-ahead from the San Rafael Sanitation District and Marin Municipal Water District, EO Products plans to move this fall.
About a year ago, EO Products started scouting the Bay Area for a new location after it learned the lease for its headquarters and manufacturing plant at 15A Koch Rd. in Corte Madera would not be renewed when it expires in November. The company was leaning toward a move across the Richmond-San Rafael Bridge to tax incentive–backed enterprise zones in Richmond or Berkeley.
“It was compelling to drive over the bridge, because the cost of doing business there is cheaper,” said Steve Fox, chief financial officer. “Doing business in Marin is very expensive.”
Yet the company has deep ties to Marin and wanted to stay. Many of the workers live in the county. More than 5.5 million bottles of soap, lotion, shampoo and conditioner shipped around the world in the past three years with “made in Marin” on the label.
Founders Brad Black and Susan Griffin-Black secured certification for manufacturing with organic ingredients, became one of the county’s first benefit corporations, incorporated expensive essential oils in amounts deemed of health-enhancing value, pushed for advances in recycled packaging — a patent is pending on a blister-pack replacement — and reductions in company net waste to zero, and fought financial pressures to outsource production as much as possible.
“It’s very much a Marin ethos type of company,” Mr. Fox said.
Company sales have been growing rapidly and are projected to continued on that path. From around $10 million in annual sales now, EO Products is forecasting 20 percent growth in the next five years. Sales got a boost in 2009 when its hand-sanitizing gel brought widespread attention to the EO brand amid concern over the H1N1 flu variant.
Among several products launched in recent years, the larger-sized, lower-priced Everyone by EO brand extension — $10 for 32-ounce containers — started hitting the shelves of Whole Foods Market, Safeway and other chains in January.
But the founders’ goals of taking their products to the masses met challenges in reducing cost per unit by producing in larger batches. Because facility lease terms didn’t allow for significant capital investment, high-volume production of sanitizing wipes had to be outsourced to Southern California and of antiseptic gels and sprays to the East Bay, according to Mr. Fox. The expansion project would allow those processes to come back to Marin, he said.
As EO Products considered East Bay options, the company’s real estate agents — Trevor Buck and Brian Foster in Cassidy Turley’s San Rafael office — approached San Rafael-based Universal Portolio Ltd., owner of 90 Windward Way, a number of other east San Rafael industrial buildings and Keller Estate Winery southeast of Petaluma. The building wasn’t on the market, but agents tried reaching out to the owner after the shuttering of startup movie model maker Kerner Optical there last year, according to Mr. Foster.
Universal Portfolio agreed to a long-term lease at lower rental rates, but EO Products would have to fund the improvement themselves. Owners eager to attract tenants often offer to cover some of those costs. In the first quarter, just 5.9 percent of San Rafael’s 3 million square feet of industrial space was available for lease, according to brokerage Keegan & Coppin.
With potential for local expansion space, EO Products sought help in getting necessary local-agency approvals. Mr. Fox contacted the Marin office of Assemblymember Jared Huffman, D-San Rafael, San Rafael interim Economic Development Director Stephanie Lovette and Robert Eyler, a Sonoma State University economist and head of the Marin Economic Forum. They pulled together staff from city planning, building and fire departments and the sanitation and water districts to consider the least time-consuming and costly options for the new plant.
“We’re always delighted to get manufacturing and industrial into our industrial areas,” Ms. Lovette said. Because of zoning there, EO Products would need just building permits from the city, after the sewer and water approvals are in hand. She had talked with the company a while ago but didn’t have available space.
The company’s new five-year goal is to become a net zero waste producer, and key to that is cutting its heavy water use. Three-quarters of the content of its products is water, but 80 percent of company water use is chilled water circulated around industrial kettles to emulsify the batches and washing out the kettles afterward. Part of the U.S. Small Business Administration financing EO Products is seeking for the expansion is for technology that will allow reuse of 80 percent of water taken into the plant and prepare the remainder for greywater recycling for irrigation, potentially in a planned community garden near the new facility.
Ms. Lovette connected the company with Redwood Empire Small Business Development Center’s industrial consultant Robert Toering on the water- and cost-saving process design, which is being planned by The Fifth Resource Group of Cotati.
Key to Ms. Lovette’s and Dr. Eyler’s involvement in EO’s meetings with the districts was explaining how the company uses water and how it plans to drastically cut water use.
“We are looking at how the water district plays a roll in economic development,” Dr. Eyler said.
Assemblymember Huffman said he is grateful public officials and company executives have been able to cooperate on the plant expansion plan. He plans to present the company with a district Small Business of the Year award in June.
“One of California’s competitive advantages is the growth of green companies like EO Products that are dedicated to environmentally responsible business practices,” Mr. Huffman said. “These companies are vital to California’s recovery, providing quality jobs for skilled workers, and stimulating growth in other sectors of the economy.”
In addition to the new plant, EO Products plans to open a small retail store in central Corte Madera this fall. Designed by Cass Smith of San Francisco, the store will have a Soap Bar to promote bulk purchases of soap in reusable containers and education. Also planned is a bulk sales program for lower-income consumers.
The manufacturing plant project team currently includes Wright Architecture Studio, a San Rafael firm recently formed by Robert Wright, a former principal of TWM Architects and Planners; The Fifth Resource Group; and likely general contractor McDevitt & McDevitt Construction, a Petaluma company that built 90 Windward.
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