Wanna start-up in Berkeley, CA?

[dasht]

I think I would like to convince the Berkeley, CA city council to make some zoning changes to attract YC-style start-ups. Maybe Berkeley could even aspire to be the location of a YC start-up school.

I need some help establishing whether there is realistic demand that would move into town if these zoning changes were made.

Downtown Berkeley has many vacant retail fronts, as do other retail corridors in Berkeley. These stores are hard to rent because they are "deep". They are narrow but go back from the storefront very far. They are like this because, back in the day, you'd store inventory in the back and have a storefront up front. Few need such spaces anymore, so the retail space is too expensive for retail.

I am proposing that tenants should be allowed a dual use: offices (such as hackerspaces suitable for a start-up) in the back -- and subleasing to artists, artisans, and other cultural uses up-front -- with no or limited partitioning between the two spaces. (Think, 3.5-walled start-ups opened up to cultural spaces on the main street of a vibrant university town.)

Is there demand for such start-up space in Berkeley? How can I be sure? How can I persuade council, if indeed there is such demand?

[channelmeter]

I don't think re-zoning will create demand for startup space. The last startup I worked for was located in the basement of a famous berkeley hotel along with a handful of other startups. There wasn't a high demand for that space. What matters is if a startup culture exists. Berkeley's startup culture is small compared to SF, Palo Alto, or the South Bay.

[dasht → channelmeter]

If true, that is the fatal bug. About this:

"small compared to SF, Palo Alto, or the South Bay"

That may be changing: http://berkeleystartupcluster.org/

Which reads, in part, "Launched in October 2010, the BSC's goal is to establish the area in downtown Berkeley -- that is walking distance to the Cal campus -- as a thriving destination for technology-oriented startups as well as tech-oriented established companies, investors, entrepreneurs and supporting businesses."

Since you know Berkeley you must know the "Power Bar Building," right? (One of the two high-rise office buildings in Berkeley.)

BSC has taken over the very top floor (gorgeous views) of the Power Bar building to create an incubator space.

My zoning idea would open up street level spaces for start-ups to grow into.

SF is very accessible from Berkeley, especially downtown Berkeley. BART is right there, for example, and by car the Bay Bridge is a quick hop down the road.

Palo Alto and the South Bay generally are less accessible. That's more of a trek either by public transportation or car. Here's the thing, though: across from the southern part of the peninsula (the traditional core of Silicon Valley) there is the south part of the east bay (e.g. Fremont) where high tech businesses locate. Between them is another traditional hub in San Jose. San Francisco has become more popular and has anchors like Twitter and a tight relation to Oracle. The bay is nearly encircled by hubs with the Berkeley / Oakland part being the laggards.

[channelmeter → dasht]

I hope it is changing. Berkeley offers some of the brightest talented people. The business plan competition and some of the engineering schools at Cal should foster the students to actually do the startup they're working on for class, thesis, etc. Most graduating students (undergrad, MBA, PhD) I know eventually end up taking jobs.

[stewie2]

Davis is better than Berkeley

[rprasad]

Office space and retail space share the same zoning in most cities (at least Berkeley did, while I lived there), so the problem is likely the landlords.

[dasht → rprasad]

In Berkeley, at least, that isn't the case. Retail store fronts are zoned for retail use. For example, suppose that a start-up wanted to take over a vacant retail space, put up curtains on the front windows and door, and not offer any retail products or services to people coming in the front door. This would not be permitted. It requires a different kind of use permit. Retail use in these areas is "by right" - the use permit is essentially permanently attached to the property. An office use would require a variance - possibly requiring a public hearing (and much expense).

Berkeley does this because they want the retail corridors to be destination spaces with lots of foot traffic. Concentrating retail use like that creates a network effect: while you're downtown buying some stationary, why not get a coffee next door, pick up a book at one of the last standing independent booksellers, pop in the game store to buy a present for your nephew etc. If retail is shut out by office uses, that network effect is threatened and there is less reason to go buy stationary in the first place.

The landlords (some, at least) are saying that part of the problem is the physical structure of this retail space. A lot of the buildings are quite old. The retail spaces are "deep" -- 50' back from the front of the store, much of which was intended for use as "the back room" where inventory would be kept. Few retailers need that much space. Modern supply chains reduce needs for extensive inventory. If a retailer only needs 15' deep of space, it's hard to convince them to pay the same square footage rate for the entire 50' depth. Additionally, there is less demand for traditional retail at all because more products are bought on-line or at big-box stores elsewhere.

My proposal addresses this. It addresses the lack of demand for retail at all by encouraging cultural use like galleries and artisan shops. It addresses the "too deep" problem by allowing for offices in the back, opening up to cultural use in the front.

I think this could be a good environment for start-ups. If a number of inexpensively sublet cultural up-front spaces were active, it makes for a stimulating and attractive environment for start-up workers. Meanwhile, the semi-open offices-in-the-back would be more comfortable and interesting than a sterile office-park type office.