Fulfilling the Vision of Years
A lot of positive feedback from the "Multiplier" of rebuilding Altadena
Since I moved to Pasadena, the Economic Development “vision” has been to create this Stanford-like ecosystem for new businesses around the cornerstones, the NASA Jet Propulsion Laboratory (JPL), Cal Tech, USC, UCLA, and so forth. The story is told so often, I roll my eyes when I hear it. It is a talking point that never happened. We had the vision but the timing never lined up.
The vision was born around the micro-ecosystem which was here in the late 1990s, a unique economic time, around a few dot.coms and support businesses including Earthlink if any of you remember them. Yahoo bought the major innovation of that age (Overture), which formed the cadre of successful entrepreneurs here trying to rekindle the magic from that win.
It is hard to make a “second album” as my very good friend likes to say. They did make the second and even third album, but never like the first.
That group is now in its mid-50s or older. The dot.com boom ended over 25 years ago. We have never had that “Silicon Valley redux” occur here. No Snap and its Evan Spiegel like the West Side got ever emerged, with his prominent position in the community. No new billionaires to replace Bill Gross and the successes he had. We have a vision but there are a lot who can tell you why it has not been able to happen.
I remember having a conversation with someone back about 15 years ago about all this and how I felt defense was an area we should look at to rebuild here.
We needed good paying, scalable employment. It is likely my nostalgia for the original founding economic driver of the area (defense) back post-war when Cal Tech’s innovations really did drive the economy. I felt there was a way to rejuvenate the local economy if we could just find the missing ingredient everyone was talking about.
Being a government contract guy, I always use contracting as my entry point for examining questions like Economic Development. As Pasadena’s own Bill Gross said in a TED Talk, you have to have three ingredients to be successful. The first is the idea. The second is the team. The third is timing. You can control the first two. You cannot control the third. Politics is very similar by the way. So is Economic Development. Sometimes you put the plan in the drawer, waiting for that perfect moment.
Perhaps we are at the point where the timing is finally lining up.
NASA is looking to expand its mission, Cal Tech and other universities are looking to new revenue sources with the funding shifts in Washington, we had a devastating fire allowing us the mechanism to bring in funds via CRA for 36 months to bring businesses into Altadena and invest in those here, Altadena has proximity to all these entities and can leverage the ecosystem that exists, as well as the fact Aerospace and Defense is a core component of the State’s Economic Plan. There is another ingredient too, the Community Development Corporation (CDC) which can tie all these pieces together in a way never envisioned. The pieces are already on the books, so the plan requires almost nothing other than guidance from government. As much as it would be great to see AB 797 come together, we could do it without a bill.
If it was ever going to happen, if we were ever going to rekindle the pieces here, it would be now.
Oh, and most important, we have a model to do it without needing tax payer dollars or tax incentives.
We have a different approach to Economic Development.
The CDC allows us to leverage innovation for government contracts. Ownership through the CDC allows us to keep the businesses in Altadena without the need for incentive tax credits used typically to bring in and keep businesses, rather, we can contribute taxes to the town. In fact, we can attract funding for opportunities because of the regulations in place with CRA for the CDC. The CDC also allows us to have multiple entities under ownership obtain Small Business Innovation Research (SBIR) Grants, the lifeblood of commercialized innovation. the CDC allows us to own the commercialization and have a “liquidity event” to fund the mission of driving Economic Development in our area, serving those needing it the most. We can do it. We have the tools and the ingredients to get where we want.
Think about it, it is the perfect convergence.
We need to start talking about it.
It is a win for the State (they get the development without having to commit funds), it is a win for the federal government (we can do the recovery Economic Development and help shift some of the burden from NASA innovation to an unappropriated funding source), it is a win for Altadena (we can build an enduring economic tax base), and it is a win for Pasadena (we have a built in hub for jobs, innovation, and structure to do something no other area in the nation has). Am I missing something?
California has always been about leading the nation through innovation. We talk about it too like we do here in Altadena. We have the assets. We now have the chance to bring all the pieces together like this.
There is a coming change in the critical aerospace and defense supplier base, moreover, where older generations are leaving companies and the younger generation will not take them over. Those companies make crucial parts and services to meet missions for systems for Original Equipment Manufacturers (or Defense Primes). If we lose those businesses, do we lose our competitiveness as an area, as a State, and as a nation?
We have a model to solve that problem too, and we can start it here in Altadena. I know the problem very well. I am one of those generational shifts with our family tool company. We recognized the situation and utilized the company to pioneer the concepts here.
It can be done. I should be done. It is the future of Altadena.