North Bay CEOs: Collective action can help save jobs during crises

Amid the human toll of the pandemic, North Bay business leaders have learned how collective action and innovative problem solving could help protect workers and save jobs.

Speaking at the 29th annual North Bay Business Journal Economic Outlook Conference at Sonoma State University on Wednesday, chief executives of business groups in Napa and Marin counties, a Santa Rosa roofing company, and a cannabis dispensary and delivery operation revealed how they’ve navigated shocks from public health restrictions and from growing pains in a fledgling legal industry.

Marin and Napa counties have been able to recover more quickly than California as a whole from the sharp job losses when virus went pandemic two years ago. Marin benefited from having a high proportion of high-earning residents who were largely able to work remotely, but the struggles of workers who couldn’t helped to expose further the disparities in the county’s workforce, according to Mike Blakeley, CEO of Marin Economic Forum.

“What the pandemic did for us is help us better understand what all of our community was going through and what needs to happen for different segments of our economy…,” Blakeley told the audience .

His organization is a few years into crafting the county’s first economic development strategic plan. Its goals include looking at building a workforce that includes a number who have to commute from out of the county because of high local housing prices and rents. Blakeley said that what convinces him that this effort won’t just become a study gathering dust on a shelf is the wide range of stakeholders that are being brought in to contribute and champion the initiatives.

Like Marin, Napa County doesn’t have a central economic development agency, but it did have one before the Great Recession. So when state and county public health orders forced the closure of much of winery tasting room, bar, restaurant and hotel business, Napa Valley took a deep hit in two of its leading economic drivers.

That led the five city chambers of commerce and the local Hispanic chamber to form the Napa Valley Chamber Coalition in the opening weeks of the pandemic, working first with local businesses on drafting COVID-19 safety protocols that meet the health guidelines, according to Whitney Diver McEvoy, president and CEO of the Yountville Chamber of Commerce. Some of those operating standards are still in place today.

“We didn't have a voice for all of business at the countywide level,” she said. “We have our wine industry represented very, very well. … But what about our restaurants … hotels, manufacturing? They need a voice of the county as well.”

The coalition is also embarking on bringing that voice to other vexing issues in the valley: fire prevention and mitigation, traffic, workforce housing and economic vitality and diversity.

The construction industry in the North Bay had been suffering from a workforce development problem for years before the 2017 fires that destroyed several thousand homes in the region that needed to be rebuilt and before the pandemic had many homeowners working remotely and eyeing remodel projects, said Letita Hanke, who started ARS Roofing, Gutters and Solar in 2004.

And though home construction was considered an essential job allowed to continue throughout the pandemic, the company’s president and CEO has had to juggle sicknesses and quarantine on job crews that can lead to problems with construction time tables.

Her story of working up from 19-year-old receptionist at a roofing company to owning one of her own helped convince her to start NextGen Trades Academy, which introduces high schoolers to 24 construction trades as a way to convince them of such a career choice and teach them how to be a desirable employee.

And one thing they learn is that the career of a plumber isn’t a joke punchline.

“These plumbers are making $250,000 to $350,000 or more a year, some of them as much as doctors,” Hanke said. “They didn't go to college. They just started working for a plumbing company and worked their way up, just like I did in roofing.”

Erich Pearson, CEO and chairman of SPARC, which operates cannabis dispensaries in San Francisco and Sonoma County, revealed to the conference audience the promise of California’s legalization of recreational cannabis, effective in 2018, has turned into a dire situation for businesses that try to abide by the maze of state and local regulations and taxes.

He pointed to the fixed costs of taxes on cultivators — $100,000 an acre in Sonoma County, $160 a pound statewide — regardless of how much the businesses actually sell.

“Most farmers lost money this year,” Pearson said. “They're still required to pay that tax.”

There have been efforts in Sonoma County and Sacramento on cannabis business tax reform since late last year.

A major challenge that California cannabis operators, and soon those in New York, has been a focus on regulating legal operations without a serious effort to crack down hard on illegal distribution, from inside the state or from outside, particularly in liberal-policy Oregon, Pearson said.

He was asked if the legal cannabis business in California was still profitable.

“No, not right now,” he said.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.