SJ mayor unveils unemployment proposals

January 26, 2010 6:32:09 PM PST
The mayor of San Jose intends to position his city for when the recession ends. He outlined a plan to create jobs, and at its core are fees and tax breaks to companies that add workers.

San Jose's unemployment rate is stuck at 12.5 percent. Its office vacancy rate is over 23 percent, so Mayor Chuck Reed says it's time to do something locally.

San Jose's mayor and three of its City Council members see a window of opportunity. As the economy improves, it wants to put out the welcome mat to attract new businesses that will create jobs.

"We know that as the recession turns, we need to be in position to work at the speed of business. We need to look at the cost of doing business. We need to reduce the fees, make it easier and cheaper for businesses to get started in San Jose," Reed said.

Those are the kinds of words that business owners like to hear. Harmonic is a Sunnyvale company that makes video delivery technology.

Its 475 Silicon Valley employees will be moving from Sunnyvale to San Jose in late summer. Architects already are designing the interior space for an existing building on North First Street.

San Jose hopes to attract more companies like Harmonic by waiving fees that can free up capital for company expansion.

Harmonic's president and CEO said he sees incentives from Israel and Hong Kong, where the company also has facilities. Why not here?

"It's part of a larger equation about where it makes the most sense to do business. Silicon Valley is a great place because of the workforce, the spirit of innovation, and to the extent that local cities can make it more affordable to do business here, I think, is just another thing that goes in the favor of funding a new program here as opposed to somewhere else," Patrick Harshman, Ph.D. said.

San Jose hasn't started a cost benefit analysis yet. Instinctively, it knows that job creation leads to more local spending by employees.

The city expects to target high-growth companies in technology for incentives. Reed also knows that San Jose needs to act fast and as the saying goes, the big dog eats first.

"Lots of cities are thinking about things that they can do. We're ahead of the curve. We want to stay there," he said.

San Jose's City Council will start analyzing the incentive plan, along with other ideas, at a study session in two weeks.