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JANUARY 22, 2010 | SUPPLEMENT TO THE SACRAMENTO BUSINESS JOURNAL

Years of Business

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SHAREPOINT 2010 — • ASSESSMENTS • BUSINESS & TECHNOLOGY ROADMAPS • DEPLOYMENTS • TECHNICAL EDUNARSSM • DESIGN & BRANDING • DASHBOARDS • DEVELOPMENT & INTEGRATION • SECURITY

IN COOPERATION WITH: WWW.KIEFERCONSULTING.COM 916.357.6767 © American City Business Journals - Not for commercial use S-2 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010

25 events, people and companies Contents | from the past quarter-century

S-4 Publisher’s foreword S-30 Galleria at Roseville S-6 Sacramento Kings S-32 Elk Grove S-8 Joe Serna Jr. S-34 Raley Field S-10 Air base closures S-36 The state budget S-12 Angelo Tsakopoulos S-38 Gov. Arnold Schwarzenegger S-14 Tower Records S-40 Casinos S-16 Dan Crowley S-42 Housing on the march S-18 The Money Store S-44 Downtown hotels S-20 The Benvenuti family S-46 1984 S-22 Midtown S-47 Green biz S-24 Raley’s Inc. S-48 The McClatchy Co. S-26 Southwest Airlines S-50 Light rail S-28 Buzz Oates S-52 The Blueprint

■ 25 Years of Business is published by The Sacramento Business Journal. Copyright © 2010 by The Sacramento Business Journal, 1400 X Street, Sacramento, CA 95818 • 916-447-7661 • sacramento.bizjournals.com Publisher: Joanna Wessman • EDITORIAL: Editor: Ron Trujillo • Senior associate editor/ Julie Sherry • Marketplace manager: Judy Porter • Advertising coordinator: Chan Saelee 25 Years of Business designer: Jennifer Myers • Assistant managing editor: Gary Chazen • PRODUCTION: Art/Production director: Mike Grover • Graphic designer/Illustrator: Jeff • Associate editor: Suzanne Webb Jeter • Assistant associate editor: Beth Davis • Senior Byrd • Graphic designer: Heather Witzens • MARKETING AND SUBSCRIBER SERVICES: reporter: Kathy Robertson • Reporters: Mark Anderson, Kelly Johnson, Michael Shaw Circulation and marketing director: Delania Lustig • Marketing coordinator: Crystal and Melanie Turner • Senior research director: Sharon Havranek • Senior research Dillard • Circulation sales executives: Debra Roak and Robert Robinson • Outside sales assistant: Elizabeth Eccles • Research assistant: Mary Alice Coverdale • Photographer: executive: Lauren Edvalson • ADMINISTRATION: Business manager: Bea Franchetto • Dennis McCoy • ADVERTISING: Advertising director: Mike Gannon • Senior account Events marketing manager: Renee Siden • Administrative coordinator: Shannon Mok • executive: Carol Kracht • Account executives: Tiffany Carlson, Teri Gorman and Receptionist: Meuy Saechao • Cover design: Jeff Byrd, photo by Dennis McCoy The “Big Build” at the Sacramento International Airport is one of the many ongoing projects of WKA.

Corporate offices located Wallace-Kuhl & Associates, Inc. in West Sacramento A Firm Built on Strength and Reliability for 25 Years

Wallace-Kuhl and Associates (WKA) has been a commanding force in geotechnical and geologic engineering, environmental and ecological services, construction testing and inspection for 25 years. Since our company was founded in 1984, we have proudly employed the finest skilled engineers, geologists, environmental scientists, engineer technicians and construction inspectors. Over the years, WKA has expanded our facilities to be able to serve Northern California and Northern Nevada. WKA's reputation and strength is based on our philosophy of building long-term client relation- ships and providing practical, cost-effective solutions. © American City Business Journals - Not for commercial use As Wallace-Kuhl and Associates celebrate our 25th year anniversary, we would like to thank our loyal clients and congratulate the Sacramento Business Journal for 25 years of serving our business community.

3251 Beacon Blvd.

Suite 300 West Sacramento CA 95691 Voice: (916) 372-1434 Fax: (916) 372-2565 www.wallace-kuhl.com

GEOTECHNICAL ENGINEERING • ENGINEERING GEOLOGY • SOIL AND MATERIALS TESTING • CONSTRUCTION INSPECTION • ENVIRONMENTAL CONSULTING • REMEDIATION SERVICE S-4 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Foreword | 25 Years of Business

he story began 25 years ago, when a small, Do we havee a ccel-el- weekly business publication chain in Kansas ebration in ourur hohonornor TCity, Mo., decided to invest in a business jour- as we have inn tthehe papastst nal in Sacramento. or a publicationion rec- The general attitude initially: “This isn’t a busi- ognizing all ooff our ness town, what are you thinking?” accomplishmentsments We often become what we believe, but fortu- over a quarterer of nately a group of entrepreneurs chose to ignore a century? Afterfter the naysayers in this community and set out to much discus-- tell the stories — good, bad and sometimes boring. sion, we chosese They profiled the people and events and to acknowledgedge in doing so provided the business intel- and recognizeze ligence necessary to support a dynamic the business economy. community Fast forward a quarter-century for providingg (sounds much longer than 25 years, the stories huh?), and the Sacramento region has and demon- grown into a strong business community. strating the We’ve learned a lot along the way. And appreciation of PUBLISHER’S there is much more to learn. the newspaperer for tellintellingg FOREWORD Certainly, the past couple of years those stories tthroughhrough your rearead-d- presented us with the most challenging ership, advertisingti i andd partnershipst hi ffor JOANNA The cover of the economy we’ve ever faced. Hopefully, many years. WESSMAN May 5, 1985, it also presented us with lessons we’ll This is just the beginning of the story. Business Journal carry as we shape the next 25 years. There is much more to tell. And, as we announces Within this publication, our award-winning have in the past, we’ll be here to tell your Dan Kennedy newsroom, with input from our readers, chose 25 stories as you shape our next quarter-cen- as publisher. stories that have shaped the region. This certainly tury of business. is not all-inclusive, as I’m sure you know of many The information is being delivered in dif- more to be told. In fact, if you would like to share ferent — and more — ways than 25 years ago, but some of those stories, you can e-mail editor we’re committed to continue to report fairly and as Ron Trujillo at [email protected]. thoroughly as we have in the past. We struggled with how to recognize this I hope you will join me in believing the future is momentous occasion. bright. We have an opportunity to shape our next wave of prosperity. We’ll celebrate our accom- plishments and the lessons learned, and yet to be learned. And, we’ll be here to © American City Business Journals - Not for commercial usetell your stories.

In 25 years of covering business in Sacramento, photographer Dennis McCoy has documented the closure of McClellan Air Force base, the growth of Elk Grove, Rancho Seco, changes in the skyline, the birth and death of Tower Records and changes in Curtis Park (clockwise from top left). 8IFOZPVBSFJOWPMWFEJOBCVTJOFTTEJTQVUFUIFSFBSFNBOZPQUJPOTBWBJMBCMFPUIFSUIBOUSJBM

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5)&$-&"3$)0*$&8)&/3&46-54."55&3 NMPRCPQAMRR AMK S-6 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Team brought worldwide Sacramento Kings | recognition to region

hen the Sacramento Kings arrived 25 years ago, denizens real- Wized the capital region could be a major-league city, and not just in sports. “The Kings have helped give our region pride, swagger and a sense of self,” said Matt Mahood, president and chief executive officer of the Sacramento Metro Chamber. “It brings the entire community together for one cause,” said Gavin Ma- loof, Kings co-owner. Originally, Gregg Lukenbill and his partners thought they would bring major-league sports to Sacramento with professional baseball. They bought 435 acres of farmland in North Natomas, but the City Council and voters rejected the rezoning necessary for a ballpark. “Our biggest chal- Developer Gregg Lukenbill, right, seen here in 1986 with Rann Haight, who designed Arco STORY BY lenge: The people of Arena, helped bring the Kings to Sacramento — and housing to North Natomas. KELLY JOHNSON Sacramento could not believe we could PHOTO BY ever be a major- continually pans over the downtown, and pays about $1 million in property DENNIS McCOY league city,” said the Tower Bridge, the confluence of taxes. The company gave up its Sac- Greg Van Dusen, the Sacramento and American Rivers, ramento Monarchs women’s basket- who worked for Lukenbill and helped or the snow-capped Sierra Mountains ball franchise in November. The Mon- bring the Kings from Kansas City, Mo. — showing off some of the region’s archs were one of the WNBA’s original A National Basketball Association best physical eight teams in 1997, and won the league executive suggested Sacramento try for attributes.” championship in 2005 and the Western basketball instead. The team has ‘The Kings have Conference in 2006. The new owners of the Kansas City featured several helped give our The focus these days is whether the Kings brought the team to Sacramento all-star players Kings need a new place to play, where for the 1985-86 season. The Kings moved who were active- region pride, that new home would be and who would into the new Arco Arena for the 1988-89 ly involved in the pay for it. Cal Expo has been talking season. For years, the Kings have been community, such swagger and a with the NBA for two years about the known for their loyal fans, and until as Vlade Divac and sense of self.’ possibility of using a basketball arena last season, the team had an impressive Chris Webber. and commercial development to pay for string of sold-out games. The arena also Matt Mahood an overhaul of the fairgrounds. “The impact on the community has© American brought City Businessconcerts, Journalspresident - andNot CEO, for commercialIn the use fall, Mayor Kevin Johnson been rather amazing,” said Van Dusen, performances and Sacramento Metro Chamber formed a task force and sought develop- now CEO of Placer Valley Tourism. “We charity events that er proposals for a sports and entertain- learned we are a major-league city.” previously over- ment complex — with an open mind “We’ve had games around the globe,” looked Sacramento, Van Dusen said. about where it could be built and how Maloof noted. “It’s great publicity The arena hosts about 180 events a year. it could be funded. The seven proposals worldwide for the city.” Attendees buy gas, stay in hotels, eat submitted range from an arena at The The Kings, Mahood said, “have sin- in restaurants — all of which is good for Railyards to Westfield Downtown Plaza. glehandedly been one of the key drivers the local economy, Mahood said. The Kings, though, are about much that have helped to define and promote “None of this would have happened more than an arena. the region, not just around the country, without the Kings being here,” he “We forget,” Van Dusen said about but internationally.” said. “the quality of life, the family memo- When a city has a sports franchise in Maloof Sports & Entertainment em- ries. They’re so important to the fabric the playoffs, he said, “there is no bet- ploys about 1,300 people, has given of the community.” ter advertisement or promotion of a re- about $15 million in cash and in-kind gion than when the television camera services to charity over the past decade, [email protected] | 916-558-7860 The Employee Owners of MTA Inspired Workspaces Congratulate The Sacramento Business Journal On 25 Years of Business

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he Sheraton Grand Sacramento ho- companies and the Service Employees tel is bustling with union labor. The International Union during the Justice TSacramento Kings are still in town, for Janitors organizing campaign. new high-rise buildings dot the Sacra- Serna wanted action on a variety of mento skyline and millions have been fronts and was willing to play hardball spent to spiff up Franklin Boulevard. to get it. Former Sacramento Mayor Joe Ser- In 1996, he engineered election of a na Jr. would be pleased. hand-picked slate of community mem- The city’s first — and only — Latino bers to take charge of failing Sacra- mayor, Serna spent almost two decades mento public schools. as an elected official before he died in “His tireless fight to save Sacramen- office on Nov. 7, 1999, of kidney can- to’s schools hits home for me because it’s cer and complications from diabetes. something I have been passionate about He was elected to the Sacramento City for years,” Mayor Kevin Johnson said. Council in 1981 and served for 11 years Johnson applauds Serna as a pow- before his election as mayor in 1992. erful mayor willing to use the office to “He was fight hard for what he wanted. STORY BY a very “Serna’s ability to use the bully pul- KATHY ROBERTSON proactive pit to push major change is something PHOTO BY mayor, I respect immensely,” Johnson added. SIRLIN PHOTOGRAPHERS not one to Serna was mayor when the Sacra- sit back and homeownership of 1,053 single- mento Kings struck a deal for naming and wait family residences. rights for Arco Arena and accepted the for things to happen,” said Jimmie Yee, But Serna’s support for organized la- terms of a $70 million loan offered by who succeeded him as mayor and sits bor went far beyond farmworkers. the council to keep the team in town. on the City Council. “If he thought a He is credited with muscling support He wanted a headquarters company project was important, he’d court coun- on the council for the Sheraton Grand in Sacramento so badly that he once of- cil members. Whether that violated the instead of a proposed Marriott project fered the site of what’s now 621 Capitol Brown Act, I don’t know. He’d do what- because the Sheraton was pro-union Mall for $1 to any company that would ever it took to achieve his goals.” and the Marriott wasn’t. The hotel put its headquarters there. The son of migrant farmworkers, opened in 2001 with labor organized by He got no takers, but pushed the Serna was raised in labor camps near card check and employer neutrality. council to extend a $26 million car- Lodi. He worked in the fields with his “Long term, our ability to do it at a rot to bring Packard Bell Electronics family and became a lifelong supporter hotel that’s been highly successful and Inc. from Los Angeles. The compa- of César Chávez and organized labor. economically viable defeats the argu- ny, along with several thousand jobs, After Chávez died in 1993, Serna got ment that card check and union neu- moved here in 1994. But five years later the City Council to pass a law creating trality hurts the economy,” said Karl the firm, then known as Packard Bell a paid municipal holiday on Chávez’s Neubuerger, business representative NEC, closed its Sacramento operations March 31 birthday. In 1997, the City for Unite Here Local 49, which repre- and relocated to Mountain View. Council renamed the park in front© of American sents City hotel Business and restaurant Journals - employees. Not for commercialIn the use mid-1980s, when the Sac- City Hall César Chávez Plaza. Economic success at the Sheraton, ramento Union newspaper named “Joe had a very special relationship where 180 workers collect union wages, Franklin Boulevard the “ugliest street with César and the farmworker move- helped efforts to organize The Citizen in Sacramento,” Serna was so upset he ment going back to the early days,” Unit- hotel this year, Neubuerger added. pushed for the first Franklin Boule- ed Farm Workers president Arturo Ro- “Mayor Serna had a more direct and vard redevelopment district. At least $7 driquez said. “Both were Chicanos born proactive role in helping union people million has been spent on the district and raised in this country. They worked than anyone else in the history of Sac- over the years. in the fields, knew what it was like and ramento,” he said. “He kicked off the revitalization and developed a passion for making things But not everybody was pleased by rising of the phoenix at Franklin Bou- better for them.” Serna’s pro-labor stance. levard; we wouldn’t be where we are The Farmworker Housing Grant “It’s one more tactic to exert politi- today without Joe Serna,” said Frank Program established in 1978 was re- cal pressure on our company,” Som- Cable, a local pharmacist and founding named for Serna in 2000. Since Septem- ers Building Maintenance spokesman father of the district. ber 2000, the program has spent about Randy Schaber said in 1997 of Serna’s $440 million to fund 132 rental projects offer to mediate between janitorial [email protected] | 916-558-7869 © American City Business Journals - Not for commercial use S-10 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Redevelopment of former Air base closures | bases has revived employment

hen the federal government decided to close three military Wbases in the region, there was lots of “wringing of hands,” as thousands of jobs disappeared and the re- Below, gion’s military income dried up. McClellan’s The closures — Mather and McClel- developers lan air force bases in 1993 and 2001, paid $3 million respectively, and the Sacramento Ar- to develop my Depot in 1995 — left vacant land, a courtyard runways and gaping buildings. Today, outside those involved in the closures say the the park’s conversions to public and private uses headquarters. have paid off. “When you look at (the former mili- Services and Sacramento County Gen- tary bases) ... from a standpoint of jobs, eral Services. I think we’ve crossed over,” said Rob The closure of McClellan created Leonard, economic development chief an estimated $1.2 billion loss to the re- for Sacramento gion’s economy. At the time of the clo- STORY BY County. sure, McClellan had a work force of MELANIE TURNER “They’ve come 13,500 — or about half of the 30,000 jobs 360 degrees,” said PHOTOS BY at its peak, said Alan Hersh, senior DENNIS McCOY Barbara Hayes, vice president at McClellan Business executive director Park LLC. Today, McClellan has 15,000 of the Sacramen- people — a combination of employees to Area Commerce & Trade Organiza- and business-related visitors — daily. tion. “They are among the largest job- The jobs generate about $525 million in generating engines in the region.” annual payroll, compared to a payroll The city and county of Sacramen- of $200 million when the base closed. to realized early on that partnerships “We’re on a path to just bust through with private developers would be key the jobs and revenue income that was to redevelopment, Hayes said. in the county in the height of the base All three former bases are either in operation,” Hersh said. redevelopment areas or enterprise McClellan has 750 acres — or about zones, which give developers tax incen- one-fourth of the 3,000 total acres — Electronics Inc. for its headquarters. tives or benefits. The incentives, which and 8.5 million square feet of buildings. The computer company brought sever- help with building renovations, have McClellan has an occupancy rate of 65 al thousand employees to Sacramento, been “a gift to this region,” Hayes said. percent. and at one time employed about 5,000 Many other cities where military At the 5,700-acre former Mather air here. But in 1999 the firm, then known bases closed were left with “a bunch© American of base, City which Business includes Journals a 2,900-acre - Not for air- commercialas Packard use Bell NEC, shut down its old concrete buildings and a runway,” port, there are now 4,000 jobs, more Sacramento operations and moved its said Robert Fountain, a consultant than when the base closed in 1993. headquarters to Mountain View. with Regional Economics Consultant In addition to the airport, Mather In 2000, the depot was taken over by in Benicia. has more than 1 million square feet of Seattle-based developer Dick Fischer. Fountain said the base closures were new buildings completed by a hand- Now, Depot Park is one of the largest “absolutely shocking to the region” at ful of developers. The county does not secured business parks in Northern the time. What has benefited the for- track what percentage of the build- California. The park has about 3 mil- mer bases is a diverse job base, Leon- ings are leased. The county also is in lion square feet of buildings. About 80 ard said. At McClellan, some of the negotiations with a group of devel- percent of the space is leased. tenants include Lions Gate Hotel, Cali- opers to build a mixed-use industri- “I’d say the project has really been a fornia Aerospace Museum, Northrop al and recreational project on about success,” said Fischer, who owns U.S. Grumman Corp., SureWest Communi- 1,800 acres at Mather. National Leasing. The company owns cations and Sacramento Container. At When the Sacramento Army Depot Depot Park. Mather, tenants include BloodSource, closed, the city leased about 370 acres California Office of Emergency of the 485-acre depot to Packard Bell [email protected] | 916-558-7859 © American City Business Journals - Not for commercial use S-12 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Region’s largest land Angelo Tsakopoulos | developer gains influence

n any and every direction from the and Tsakopoulos actively recruited Capitol, invariably along the re- Apple Inc. to come to Elk Grove and Igion’s highways, you can see the build a facility on Tsakopoulos’ land. mark of Angelo Tsakopoulos and his “He knows how to make a deal,” AKT Development Corp. Gianini said. “He instinctively knew A Greek immigrant who came to what (Apple) meant for the rest of his the U.S. with little more than a dream, property there.” Tsakopoulos has become by a wide The family created The Tsakopoulos margin the region’s largest land de- Hellenic Collection at California State veloper. He is also one of its most in- University Sacramento, it donated fluential political contributors, a phi- $2 million to Stanford University to lanthropist and often a target for envi- create a chair of Greek studies, and it ronmentalists and others opposed to has offered land for universities and his development plans. medical facilities in the hopes of win- Tsakopoulos doesn’t talk much ning development rights. about how vast his land holdings are, Maintaining position but observers es- as the top land devel- STORY BY timate they to- opment firm has fallen MICHAEL SHAW tal almost 28,000 to Tsakopoulos’ chil- PHOTO BY acres, about twice dren, first to daughter the size of the Eleni and now to son DENNIS MCCOY city of Rancho Kyriakos. Cordova. The success has come Angelo The vast tracts include about 4,000 AKT Development is owner of the Meridian largely from a standard Taskopoulos acres scattered among several areas Plaza, among other office buildings. suburban model of de- in south Placer County, a large por- velopment, but the firm tion south of Highway 50 near Folsom what some say is a reward for their might have to rethink the model. where he and others are seeking ap- loyalty to the Democrats, Angelo’s “I think there’s going to be a lot proval for residential and commercial daughter Eleni Tsakopoulos-Kounal- more infill development in the future development, farmland near Wheat- akis is set to become ambassador to than we have had in the past,” said land that the company once proposed Hungary. Mike McKeever, executive director of could provide 11,500 homes, and many The family al- ‘He went from the Sacramento Area Council of Gov- other areas around the region. so has been one ernments. “We will also have subur- AKT Development is also a part- of the region’s humble beginnings ban development, but it will be a dif- owner of the Esquire Building on the top philanthro- to one of the most ferent kind than in the past.” K Street mall and owns The Meridian pists and often is McKeever said AKT has embraced Plaza office building across from the the first stop for influential people this new model with one of its pro- Capitol. fundraisers. posed developments: Greenbriar in Tsakopoulos, along with his late Al Gianini, a in the region.’ North Natomas. brother George who died in 2009,© Americanformer City executive Business Journals - Not for commercialThe use development is planned around started humbly in real estate and par- director of the Al Gianini a future light-rail line, with homes layed profits into larger and more suc- Sacramento Ar- former executive director, and businesses located within the cessful ventures. AKT has expanded ea Commerce & Sacramento Area Commerce neighborhood to curb traffic. and Trade Organization into commercial real estate and con- Trade Organiza- McKeever said he believes the Tsako- tinues to run farming and ranching tion, noted that poulos family understands the chang- operations while also developing land Tsakopoulos contributed the most ing forces of development and the re- for homes and commercial properties. money of any individual to SACTO gion’s Blueprint for Smart Growth (see Along the way to prominence, Ange- during Gianini’s tenure there. story, page S-52). lo Tsakopoulos became a Democratic “He went from humble beginnings “I’ve certainly had some differenc- power broker as well. In 2008, he do- to one of the most influential people es with Angelo,” McKeever said. “By nated more than $100,000 to political in the region,” Gianini said. “He was and large, he has really embraced the campaigns, according to Campaign- very involved in our organization and Blueprint plan and Greenbriar is a money.com. was the major financial contributor.” good example of that.” The Tsakopoulos family has host- What was good for Sacramento of- ed the Clintons in their home and in ten was good for AKT Development, [email protected] | 916-558-7861 Celebrating over years in business in Northern 35 California

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f video killed the radio star, then the Web plunged a dagger deep into ITower Records. The company that grew to be Tower Records — with locations in New York City, Tokyo and London — started next to the soda fountain inside a Sacra- mento pharmacy on Broadway in the late 1940s. Tower Records’ evolution mirrored that of the music industry, and it rode the growth spurt of rock ’n’ roll with the baby boomers, from The Beatles and Rolling Stones to Michael Jackson and U2. But the home-grown company col- lapsed three years ago as the music industry’s decades-old retail model ceased to work, overwhelmed by the convergence of massive changes in retailing, the music industry and Tower Records closed in 2006 with blowout sales, including one at the Watt Avenue store. technology. But what a ride More than just a retailer, Tower cul- immediately, and for free. STORY BY it was. tivated an attitude and a following But Solomon — and Tower — contin- MARK ANDERSON The former cor- for being “the” insider in the music ued the store expansion, adding a doz- PHOTO BY porate parent of business. en stores between 1998 and 2000, and DENNIS MCCOY Tower Records, It featured in-store performances at taking on $80 million of debt. MTS Inc., even- many of its locations, and its Sunset Debt pushed Tower to its first bank- tually expand- Strip store in Hollywood was famous ruptcy reorganization in 2004. The ed around the world and into selling for impromptu parking-lot perfor- company tried to manage its troubled books, videos and art. mances from acts as diverse as Adam debts, but the music landscape had For almost 60 years, Tower founder and the Ants, Duran Duran and Guns been permanently altered by the rapid Russ Solomon was able to sell music to N’ Roses. rise of the Internet and retailers such music lovers. One of Tower’s hallmarks was its ex- as Wal-Mart, Target and Best Buy, Solomon started selling records out of cellent store locations. By the time the which sold records as a loss leader. An- his father’s pharmacy in what’s now the company was liquidated in its second other blow came from peer-to-peer file Tower Theater building on Broadway. bankruptcy, it had leases for 81 retail sharing. At first, he sold the used 45s that had locations with 1.3 million square feet in The music ended for Tower in 2006 been played on juke boxes. The business 17 states and the District of Columbia. as the highly leveraged company was grew and by 1960 Solomon opened© his American About City Businesshalf the storesJournals were - Not in forCali- commercialleft with use no options but liquidation. first record store on Watt Avenue. More fornia, with nine locations in the Sac- The 2,700-employee company was dis- stores followed, including high-profile ramento area, including Tower Re- mantled to pay off creditors. The in- locations in San Francisco, Hollywood, cords, Tower Video and Tower Books ternational store brand was sold off Westwood and Sherman Oaks. in Roseville, Citrus Heights, Sacra- and continues to operate. The Web site At its peak, Tower had 89 stores na- mento and Davis. also was sold off and continues to sell tionwide and 144 stores licensed in The company also had a music. nine countries. It had a Web site, Tow- 128,850-square-foot headquarters and And octogenarian Solomon climbed er.com, and a music magazine titled distribution center in West Sacramen- back into the retail business in the Pulse. to, with several hundred employees. wake of the bankruptcy. Two years And the company made money. Tow- In the late 1990s, Tower expanded ago, he opened R5 Records on Broad- er reported a $17.3 million profit in 1994, into Asia. The move created huge debt way, across the street from the former but that quickly declined to $3.5 million for the company and coincided with pharmacy where he originally started in 1997. Two years later, the company the rise of technology that eroded selling records. started losing money, according to a Se- the traditional music business. Sud- curities & Exchange Commission filing. denly almost any music could be had [email protected] | 916-558-7874 With our variety of specialists, personalized service and the latest technology, it’s easy to why we’re the best seechoice for your eye-care needs.

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hen Daniel Crowley took the Foundation posted Sacramento political consulting firm helm at Foundation Health net income of $11.1 Townsend Raimundo Besler & Usher WCorp. in 1989, the company was million for the follow- did some consulting for Crowley years in default on $41 million in bank loans. ing fiscal year ended ago but that relationship soured, too. Seven years later, Foundation be- June 30, 1990. Seven “A tenacious and ruthless business- came Sacramento’s one-and-only For- years later, Founda- man, proud of his characterization tune 500 company, boasting annual tion’s $3 billion merg- as a turnaround artist, he viewed his revenue of almost $2.5 billion. er with Health Sys- responsibility to the board to make By the time Crowley stepped down Dan Crowley tems International money at all costs,” Townsend said. as chairman in 1997, he had orchestrat- Inc. in Woodland Hills “He was very aggressive — to the point ed 63 deals to expand the company, in- created the fourth- he makes Gordon Gekko look like cluding the merger that took the head- largest publicly traded managed-care Mother Teresa,” he added, referring quarters to Southern California and company in the nation, with 5 million to the fictional character from the 1987 eventually changed its name to Health members in 16 states. film “Wall Street,” starring Michael Net Inc. “There’s no question that Sacramen- Douglas. Crowley has won accolades for busi- to, during the time Dan was at Founda- The ride at ‘He was very ness acumen and dislike for ruthless- tion, became the managed-care capital Foundation ness, but nobody disputes his contri- of California. That’s part of his lega- made Crowley aggressive — bution to the cy,” Hays said. wealthy. His sev- to the point he STORY BY Sacramen- “He brought a certain discipline to erance package KATHY ROBERTSON to econo- health care in River City,” he added. was estimated makes Gordon my. Health “Was it fun? No, it was not,” he said. at more than $21 Net remains “Evidence-based medicine talked million. And his Gekko look like a strong local employer with a about today? Dan brought that to Sac- golden touch work force of about 2,500 in Rancho ramento 20 years ago.” didn’t end there. Mother Teresa.’ Cordova. The relationship between Sutter and Big money David Townsend “The company was really sliding Foundation quickly soured and Sutter loves a turn- consultant, Townsend toward an abyss and Dan turned it pulled out. around guy, Raimundo Besler & Usher around,” said Pat Hays, the former Sut- “It was probably one of the most ill- and in the three ter Health executive who chaired the advised strategic decisions I made at months after search committee that hired Crowley. Sutter,” Hays said of the partnership. Crowley left Foundation, investors Sutter was an “But it was one of the most advanta- staked more than $1 billion on his repu- investor in the geous financially.” tation. He took the money and started ‘He brought a company at the Sutter paid $25 million to get in and a venture capital firm on Capitol Mall certain discipline time. got $60 million when it got out. now called Dynamic Ventures. Formerly a Crowley declined to be interviewed Crowley did a turnaround of sorts to health care troubleshooter for this story. as CEO at Coram Healthcare Corp., a for Blue Cross/ “He is a very smart businessman. home infusion therapy company based in River City.’ Blue Shield of You can’t take that away from him, but in Denver. Crushing debt propelled Ohio, Crowley© American his roughnessCity Business and Journals toughness - Not some- for commercialCoram use into bankruptcy reorganiza- Pat Hays accepted the top times rankles folks,” said Steve Tough, tion, but it was cash-flow positive when former executive, job at Founda- a former Foundation executive who Crowley left in 2003 and returned to Sac- Sutter Health tion on May 17, worked with Crowley and now is presi- ramento more or less full time. 1989, the same dent of Health Net Federal Services, By 2006, Crowley was ready to ride day the state ordered the company’s which employs 900 of Health Net’s local again. He became CEO of U.S. Health- health maintenance organization to workers. Works Inc., an occupational health “cease and desist” from giving mon- Many doctors are among the company based in Georgia, with 123 ey to the parent firm because it was in rankled. clinics, five in the Sacramento region. technical default on its bank loans. “He stopped paying people long Plans to move the headquarters to Hard-charging Crowley turned ev- enough to get the cash flow up,” said Sacramento fizzled, but the company ery aspect of the company upside down Bill Sandberg, executive director of the has added 10 centers since Crowley to find out what worked — and didn’t. Sierra Sacramento Valley Medical So- took the helm with the same aggressive Discipline and efficiency ruled. Prices ciety. “His relationship with the medi- roll-up strategy he used at Foundation. went up. Payments slowed for breath- cal community was toxic.” ing room. David Townsend from the [email protected] | 916-558-7869 Appellate When choosing legal counsel… Banking/Finance Bankruptcy make sure you run the numbers. Business Climate Change Construction Corporate Creditors’ Rights Distressed Assets Employment Environmental Estate Planning/Probate Government Contracts Health Care Integrated Project Delivery Intellectual Property Land Use Litigation M&A Mediation/Arbitration Law360 Survey— Nonproﬁt Most Female Best Shareholders in Nationwide 12 listed as Public Law Lawyers in America® Law Firm Survey Public-Private Partnerships Real Estate National Law Journal’s Inaugural Top 20 Midsize Law Firm “Hotlist” Redevelopment Sustainable Development 2nd largest law 8th in Sacramento for Tax ﬁrm in Sacramento © American City Business corporateJournals - Not forphilanthropy commercial use Water

See how McDonough’s numbers stack up — www.mhalaw.com/mha/numbers 800.403.3900 S-18 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 The region’s largest public The Money Store | company left its mark

he Money Store was the Sacra- mento region’s largest publicly T traded company in the 1990s, em- ploying 3,200 people and building a head-turning headquarters. The company also was well-known to consumers with its nationwide TV advertising campaign, as The Money Store connected with homeowners looking to tap their homes for cash. The company’s beginnings were a bit more humble, starting in New Jersey in the 1960s. But the founder’s son, Marc Turtle- taub, liked Sacramento, so the company created a dual headquarters in the region. The fast- STORY BY growing company MARK ANDERSON was expanding its home-equity busi- PHOTO BY ness and became DENNIS MCCOY the nation’s lead- ing Small Busi- The Money Store built the Ziggurat in West Sacramento to consolidate its operations in the ness Administration lender. region. The building remains a landmark, though The Money Store was bought in 1998. The firm established its local pres- ence in a renovated midtown Victo- The company approved home-equi- When First Plus Financial, First rian in the early 1990s. A few years ty loans at a phenomenal pace, bun- Alliance Corp., Green Tree Financial later, The Money Store had employ- dling them into securities to be sold on and others got into the same business ees in a former East Sacramento the secondary markets. It was a quick at the end of the 1990s, they started re- cannery as well as 16 other offic- turnaround from approving the home- financing each others’ best customers, es in downtown, midtown and East equity loans to selling the debt and including many high-risk loans. Sacramento. generating more money for homeown- And the better and lower-risk loans Money Store executives wanted to ers — and profit for the appropriate- left the portfolio after a few years and combine the offices and meet the fast- ly named Money Store. The company never reached maturity, leaving home- paced demand for its services, so the was originating more than $1 billion in equity lenders with shaky borrowers. company constructed the Ziggurat loans every quarter. Anticipated future earnings went away building along the Sacramento River Just as The Money Store peaked, and credit quality grew dismal, creat- in West Sacramento for its headquar- First Union Bank bought the company ing a mess for The Money Store and its ters. The company also bought land in summer 1998 for $2.1 billion, one of many rivals. and had plans for a 20-acre campus© inAmerican the Citylargest-ever Business acquisitions Journals - Not connected for commercial The use company crashed as part of Folsom. to the Sacramento region. First Union Bank at a hefty cost of The company’s growth — and suc- Investors clamored for the compa- $4 billion — or almost double the cess — was simple: Americans carry a ny’s securitized paper that paid a high- purchase price. lot of costly credit card debt, said Tur- er yield because of the higher-risk, The legacy of the company local- tletaub, then-president of The Money subprime borrowers. The Money Store ly is its gold pyramid towering over Store. But a home-equity loan is lower- kept one-tenth of the securitized pa- the steady current of the Sacramento cost debt and possibly tax-deductible, per, which it would collect after five to River, now home to the state Depart- and a better option. seven years. The practice allowed The ment of General Services. After sell- The concept caught on with con- Money Store to enjoy better returns ing the company, Turtletaub moved sumers, especially as home prices in- because many borrowers had bad to Hawaii and stared producing mov- creased, establishing a sort of available credit and likely couldn’t get refinanc- ies, including the award-winning “Lit- ATM with their real estate. ing to pay the debt off. tle Miss Sunshine” and “Everything And The Money Store made it But the company’s business model is Illuminated.” easy to access the home equity in the and success also created a hard-to-es- mid-1990s. cape problem — copycat competitors. [email protected] | 916-558-7874 Quest Salutes the Business Journal's 25 years in business.

Contact Quest 800.326.4220 questsys.com Quest is a trademark of Quest Media & Supplies, Inc. S-20 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Father and sons built The Benvenuti family | much of Natomas

envenuti is one of the best-known names in the Sacramento region. B The family has changed the community, from bringing a major sports franchise to the region to developing an arena for the team, downtown high-rises and North Natomas. Joseph Benvenuti arrived in Sacra- mento in 1949, with an eighth-grade education and some experience in the wholesale grocery business. Benvenuti, a World War II veteran, started buying houses and duplexes. Soon, he was buying land and moved to much-larger projects. He partnered with Marvin “Buzz” Oates, building many STORY BY of the warehouses — GARY CHAZEN also known as “Buzz boxes” — in the re- PHOTO BY gion. The money- DENNIS MCCOY making partnership Richard Benvenuti, along with his father, Joseph, developed much of North Natomas as well lasted into the 1970s as the Renaissance Tower, in background, downtown. (see story, page S-28). Benvenuti and Oates — along with operations of JB Co., said the construc- continuously published newspaper grocery-store chain heiress Joyce Raley tion of Arco Arena and the surround- west of the Mississippi River, The Sac- Teel — were listed as billionaires until ing infrastructure was the key to de- ramento Union. By 1994, the paper was recently due to the recession, according veloping Natomas beyond warehouses. out of business, and he and business to Forbes magazine. Until the arena was built, the Kings’ partner David Kassis later sold the But it was a long road from Buzz boxes home court was in a Benvenuti-owned property. to billions for Benvenuti and his family. warehouse — with only 10,300 seats, Danny Benvenuti and Kassis also sold In between there were business easily the smallest venue in the Nation- 1325 J St. for $60 million in 1997. Danny parks, high-rises, land deals, lawsuits al Basketball Association. Benvenuti owns the downtown Grey- and the Sacramento Kings. The 1980s were a busy time for father hound station property, which he even- Through the years Benvenuti and his and son, as they ventured into major tually hopes to develop. The city bought oldest son Richard bought large chunks developments downtown. The most no- Greyhound’s lease in 2008 and will of land at the edges of Sacramento and table project was the Emerald Tower, move the station to Richards Boulevard. Roseville. Together, they were major an 18-story building at 300 Capitol Mall, Today, JB Co. owns 14 million square players in the development of North completed in 1983. Six years later, they feet of property in California, Illinois, Natomas, which sits on a floodplain© Americanopened City the Business Renaissance Journals Tower, - Not the for commercialIndiana, use Michigan, Missouri and Ohio. and is now covered with thousands of 28-story building on K Street some call Gately runs the day-to-day operations, homes, offices and retail centers, all the “Darth Vader” building for its strik- but the elder Benvenuti is “still involved protected by extensive levees. ing — some say ominous — features. quite a bit,” Demetre said, especially in “He basically created the whole Nato- Richard Benvenuti also spent much the bigger deals, where “he still makes mas area,” said Mark Demetre, senior of the ’80s in court battling lawsuits, the decisions.” vice president of Colliers International, sometimes against family. In one, his The company sold its last parcel in who has worked with Benvenuti’s com- sisters Lynda and Nancy sued for $3 Natomas last year, Gately said. pany, JB Co., for 18 years. “I’d say he’s million. In another, he and his brother Demetre describes Joseph Benvenu- responsible for 80 percent of the devel- Gary “Bud” Benvenuti sued their cous- ti as “a maverick, a deal-maker, honest, opment in North Natomas.” in Daniel J. “Danny” Benvenuti Jr. tough and at the end of the day, real fair.” The elder Benvenuti also partnered The latter has also made a name for Gately, who has worked for Benvenuti with developer Gregg Lukenbill to himself in Sacramento. Danny Ben- for 30 years, goes farther: “Joe’s like a bring the Kansas City Kings to North venuti bought a valuable piece of prop- father to me. It’s that close.” Natomas in 1985 (see story, page S-6). erty in 1989 — 301 Capitol Mall. The Jim Gately, vice president of building, and deal, included the oldest [email protected] | 916-558-7865 © American City Business Journals - Not for commercial use S-22 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010

RalMidtown |

all it the midtown paradox. Businesses and consumers are Cdrawn to the central city neighborhood by the same quirks that make On Second it hard to stay in business. Saturday, when Midtown — loosely defined by the people stroll borders of Alhambra to 16th streets among midtown and the Southern Pacific levee to galleries, “it’s Broadway — has seen steady prog- pretty evident ress in the past 25 years, with more the blocks restaurants, residents and retailers that still need moving in. infill and “A lot of what happens in midtown retail draws,” is because we’ve reached a critical longtime mass,” said Rob Kerth, executive di- midtown rector of the Midtown Business Asso- employer ciation. “Folks can come with no par- Bob Beyn said. ticular plan ex- STORY BY cept to see what’s “We were on both sides, and then we Saturday art walks, when galleries JENNIFER MYERS going on and have moved right into the middle of it all,” and restaurants stay open late and PHOTO BY dinner. And they Beyn said. tens of thousands of residents wander can find that.” The neighborhood was quieter then, and mingle. DENNIS MCCOY But, Kerth Beyn added. But Second Saturdays also highlight noted, “if we lose “It had already shown signs of life in how far the neighborhood has to go. critical mass, we’re in a lot of trouble.” the ’90s, so it wasn’t like we were put- “There are still blocks that need to It’s a reasonable concern — the ting ourselves in harm’s way,” he said. get filled in to have a draw,” Beyn said. same types of small, creative business- “The proportion of homeless to shop- “On Second Saturday you could stroll es that are drawn to midtown are also pers is much better today than it was from Memorial Auditorium to El Cen- those that have trouble getting, and when we first moved in. I think there’s tro (at 28th and J streets) and it’s pret- staying, open. still as many homeless, there are just ty evident the blocks that still need in- “The economy is having an effect,” more shoppers.” fill and retail draws.” said Bob Beyn, partner in Seraphein Safety is a priority for the midtown And businesses are paying a premi- Beyn advertising agency in midtown. association, which is working on im- um for that retail. Lease rates in mid- “Most of the shops are mom-and-pop, proving the public spaces, Kerth said. town were $1.90 per square foot in the so it’s been tough. We’ve seen a lot of “We’ve also got some bread-and- third quarter, up from the 50 cents to turnover in the storefronts.” butter issues like street lighting, side- $1 per square foot asking price in 1985, The Midtown Business Association walks, a program to improve parking according to CB Richard Ellis. was formed in 1983 to help business- availability,” he said. The neighborhood has 1.95 million es keep their doors open and combat Those cosmetic improvements fol- leasable square feet, compared to 1.15 problems that still exist today: park-© Americanlow City the improvementBusiness Journals of many - Not mid- for commercialmillion use in 1985, but the vacancy rate ing, homelessness and neighborhood town homes in the mid- to late-’90s. has held steady at 18.1 percent. relations. “They all depend on each other,” So how does Kerth plan to fill that “Until you learn about midtown, it’s Kerth said. “The art community space? hard to find a place to park,” Kerth moved to midtown in the early- to “Midtown, more than other parts, said. “There are several things we’re mid-’90s, and that sort of got people depends on the great neighborhoods doing to make that easier.” on the ground and they began to buy we have,” he said. “There’s a com- Beyn agrees that parking is a major and fix the houses up … and since mon misperception that when busi- concern. they live here, they want things ness does well, neighborhoods suffer, “Anyone that is opening a restau- to do here and that generated the so we have a number of initiatives to rant knows you have to have a certain hospitality industry, which in turn see the neighborhood get better with amount of parking to even open,” he attracts small, creative businesses. the business community. We need to said. Art was in a big way the impetus, it keep finding creative people to bring Seraphein Beyn had offices at 24th got things running.” down here.” and C streets and 17th and W streets Midtown’s connection to art is before moving to 2319 J St. in 1995. on display at the monthly Second [email protected] | 916-558-7867 Celebrating our ﬁrst 100 years! Together we’ve bought homes, started careers and businesses, sent our children to college, saved for retirement and worked togethertogethe to build lives here in the greater Sacramento region.regi And we’re still going strong after 100 years.

Together we share our successes, and together we weather the storms. As we celebrate this milestone, we look forward to new opportunities, great achievements and 100 mmore years together.

WWe extend a big “thank you” to our loyal customers. And, we are excited about the prospects of welcoming new customers who will join us in saying, “First Northern...

Strength. Stability. Security. Since 1910. www.thatsmybank.com

Auburn Davis Dixon Fairfield Roseville Sacramento Vacaville West Sacramento Winters Woodland S-24 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Grocer challenges national chains Raley’s Inc. | with its forward-thinking strategies

aley’s Inc. is a leader in employment, philanthropy and customer Rservice in the Sacramento region. The 75-year-old local grocery chain also has been a pioneer in efforts to go green, in choosing West Sacramento as its headquarters even before the city in- corporated, and in anticipating industry-specific trends. The family-owned company main- tains the largest market share of any grocer in the four-county region, and has seen other independents and national players, such as Albertson’s and Ralphs, come and go. “They’ve really set the pace for grocery,” said Garrick Brown, research director at Colliers International. Grocers that are PHOTO COURTESY OF RALEY’S INC. STORY BY considering en- Raley’s first store opened in 1935 in Placerville. Today the chain has 134 stores. KELLY JOHNSON tering the market have to look at The grocer places high on several of with the big guys for the long term. how they could compete with Raley’s, the Business Journal Top 25 lists, for its Ironically, Brown noted, it has been the especially considering Raley’s “huge corporate direct giving — No. 1 — and large chains that have struggled. local brand loyalty,” Brown said. its employment levels in each of the As a private company, Raley’s is quiet “Raley’s visionary leadership in four counties, coming in fifth-largest about its finances and business strate- their industry is legendary,” said in Yolo County to 21st-largest in Placer gy, and declined to discuss future plans. Denice Seals, chief executive officer County. But observers think Raley’s is in “pretty of the West Sacramento Chamber of Raley’s also has some firsts in terms decent fiscal shape,” Brown said. Con- Commerce. of environmentally friendly efforts. In sidering the economy, that says a lot. Raley’s, with revenue of $3.4 billion 1997, Raley’s launched the nation’s first Over the years, Raley’s has made in 2008, is one of only a few big-name fleet of liquefied natural gas-powered some successful acquisitions — par- retailers based in the region, and trucks, and in 2008 became the first re- ticularly Bel Air and Nob Hill Foods. outlasted another West Sacramento- tailer in the state to use a new diesel Raley’s hasn’t avoided all missteps. The based retailer — Tower Records (see truck filtration system that reduced company eventually sold off its Las Ve- story, page S-14). Raley’s is the sec- emissions by more than 80 percent, gas and New Mexico stores acquired as ond-largest privately owned compa- even though its truck fleet already met part of a 27-store package deal in 1999 ny based in the region, behind Sutter air emission requirements at the time. when Albertson’s and American Stores Health’s $8.3 billion in revenue. In 2009, Raley’s was the first retailer needed to shed some stores as part of Founded by Tom Raley in Placerville© American in California City Business and onlyJournals the second - Not for in thecommercial their usemerger. in 1935, Raley’s operates 134 stores in country to earn the highest designation A big question remains about what four formats in Northern California from the U.S. Environmental Protec- the future holds for Raley’s, given that and Nevada. Of those, 50 stores oper- tion Agency’s GreenChill Partnership owner Joyce Raley Teel is in her late ate in the region. With 13,500 employees for its innovative green refrigeration 70s. But much of that speculation was companywide and about 3,000 full- and technology. resolved Jan. 6 when Michael Teel, 3,500 part-time employees in the region, Despite the recession, Raley’s was Teel’s son and the founder’s grandson, Raley’s pumps many dollars into the able to open two stores each in 2008 and returned to run the company and said region through payroll and the goods in 2009, with a new supermarket in Pet- he intends to keep Raley’s private. and services it buys. aluma in April last year and one in Tra- “This is a special company,” he said. “It would be difficult to overstate cy in November. “We are unique in how our employees their significance to this community,” For years, rumors have abounded offer service to our customers. I value Seals said. “The economic development whether Raley’s would sell to some na- that strength, and see it as essential to boost provided by their corporate head- tional chain, with the common think- who we are.” quarters is a cornerstone of our city’s ing, at least until recently, that regional growth.” retailers of any type couldn’t compete [email protected] | 916-558-7860 8GIFL;KI8;@K@FEF=:FDG8JJ@FE%

Nowadays, the topic of healthcare is on many people’s minds. The challenges of providing quality care for all have changed quite a bit in the 150 years since Mercy established its healthcare ministry in Sacramento. We have never wavered, however, in our mission to do just that. To this day, Mercy leads by example, delivering compassionate care, clinical excellence and advanced healing to the communities© American we City serve. Business Journals - Not for commercial use

MERCY GENERAL HOSPITAL MERCY HOSPITAL OF FOLSOM MERCY SAN JUAN MEDICAL CENTER METHODIST HOSPITAL OF SACRAMENTO mercysacramento.org S-26 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Discounter’s arrival Southwest Airlines | meant changes at airport

iscount fares, cattle-call seating, plenty of peanuts and a straight- Dtalking chairman changed the landscape for Sacramento travelers. One cheap ticket at a time. When Southwest Airlines arrived in the capital region — and in Termi- nal B at the Sacramento airport — on Southwest June 17, 1991, the carrier caused some Airlines, which eyebrow-raising by the big-name play- offers discount ers and created a lower-priced option fares and free for travelers. bag checks, Southwest’s “approach was com- is the largest pletely different,” Sacramento Inter- carrier at national Airport spokeswoman Gina Sacramento Swankie said. “It changed the whole International scheme of things.” Airport. Indeed, national airlines often charged a hefty 0Xa[X]T_PbbT]VTa[TeT[b industry from Texas. “They’re the STORY BY price flying to and BPRaP\T]c^8]cTa]PcX^]P[0Xa_âc price setter.” RON TRUJILLO from the Sacra- 9d[hcWa^dVW=êT\QTa Before, airlines charged as much to mento airport. PHOTO BY travel from Sacramento to San Fran- But Southwest, B^dcWfTbc ((\X[[X^] cisco as Southwest does to Phoenix. DENNIS MCCOY which debuted 0Xa[X]Tb “The competition in Sacramento with in-state one- D]XcTS !&% !" is very ferocious, and (other airlines) way fares of less than $20, provided 0Xa[X]Tb have to match. It forces them to lower much-needed competition, industry DB !# '$ prices,” said Parsons, who has used the leaders say. 0XafPhb Sacramento airport via Southwest. Southwest had a “tremendous im- “Southwest has been the best bless- 3T[cP %'%# C^cP[UâP[[ pact,” said Jerry Miyamoto, owner of 0Xa[X]Tb R^\\TaRXP[PXa[X]Tb) ing” for budget-conscious business and Miyamoto Travel Services at 15th and "'"\X[[X^] leisure travelers nationwide and in 0[PbZP $( '& X streets. “It created a lot of turmoil.” 0Xa[X]Tb Sacramento, he said. Basically, Southwest connected Miyamoto agrees, adding that the Californians to the capital, and $ \X[[X^] $\X[[X^] !\X[[X^] discount airline — which has faced Sacramentans to much of the state, B^daRT)BPRaP\T]c^8]cTa]PcX^]P[0Xa_âc competition from several now-defunct for a low price. carriers — has become even more criti- “Being the state’s capital made it a Southwest, which has 258 employees cal for cash-strapped consumers look- promising location, a really attractive in Sacramento, has become the ma- ing to escape the charge-whatever-you- spot on our network,” said Southwest jor airline in the region. It has 81 daily can, financially strapped carriers. On spokeswoman Beth Harbin, who said© American flights, City or Business about one Journals of every - Not two for arriv- commercialSouthwest, use two checked bags fly free. the Dallas-based airline tiptoed into ing and departing at the Sacramento “The luggage, that is the big deal” re- the California market, first with ser- airport. cently, Miyamoto said. “Now, more and vice in Los Angeles and San Diego in Southwest handled about 53 percent more businesspeople are leaving with 1982. The airline arrived at the Oak- of the airport’s 3.83 million passengers what they can carry on.” land airport in 1989, followed by Bur- from July through November, easily And more Sacramento-area passen- bank — and, finally, Sacramento. The exceeding second-place United Air- gers are looking to Southwest. city was the 31st to join the Southwest lines at 7.2 percent for the same period, “Sacramento is an important city service lineup. “Southwest was active- according to airport statistics. to a lot of the airlines,” said Parsons, ly growing, but we had to be very selec- But the airline’s arrival and impor- referring to its power as the capital. tive and careful.” tance to the community are about “And you’ve got an airline that is very Careful but far from idle. more than passenger levels; price and aggressive and still profitable. You’re In Sacramento, the company has options also come into play. one of those lucky cities that have grown from one gate to eight — and 74 “Southwest calls the shots,” said Southwest.” flights to 11 cities nonstop, from Bur- BestFares.com publisher Tom Par- bank to Seattle. sons, an airfares guru who tracks the [email protected] | 916-558-7862 © American City Business Journals - Not for commercial use S-28 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 With a conservative, simple approach, Oates Buzz Oates | has built an empire out of Sacramento

eal estate mogul Buzz Oates once told a reporter: “You don’t ever get Ryourself out on a limb. You never know when your lending institutions might suddenly close in, call notes due or not lend you any more money.” Oates said that more than 10 years ago when the economy was hum- ming along, so the strategy seems especially prescient in today’s environ- ment where credit is tight, real estate values have plunged and commercial real estate developers who overlever- aged their property are now feeling the pinch from lenders. That type of business savvy has kept Oates and his companies running strong for more than four decades, through sev- STORY BY eral recessions, Buzz Oates, shown here in 1987, has been developing “Buzz boxes” for more than 40 years. MICHAEL SHAW with no sign of slowing. In that PHOTO BY time, Marvin L. Despite his success, Oates retains a million in local development projects in DENNIS MCCOY “Buzz” Oates, down-to-earth sensibility, Ramos said. 2008 and has more than 1,600 acres of 86, has gone Oates, who was not available to com- land in the development pipeline. from a simple key maker to one of the ment, is a World War II bomber crew The companies manage about 18 mil- most successful real estate developers member who once had to clear a live lion square feet of commercial real es- in the Sacramento region and one of bomb that failed to dislodge properly tate (including the 7,500-square-foot of- the nation’s wealthiest. from the B-29 he was flying in. fice for the Business Journal). His personal wealth has been mea- Practicality always has been a main- Oates was also a founder of Ameri- sured at $900 million by Forbes maga- stay for him. He has said that while can River Bank in 1983, and chaired its zine, where Oates has appeared as one other kids wanted to be policemen and board in the 1980s. of the 400 wealthiest Americans. That firemen, he wanted to make keys. Af- He and Ramos met years ago at the figure might have taken a hit given the ter the war, he followed that childhood Ram restaurant on Fair Oaks Boule- global plunge of commercial property dream and opened a key-making and vard, where businessmen would often but that’s unlikely to derail The Buzz locksmith business. But he found that convene after work in the 1960s. Oates Group of Cos., where the philoso- with each successive store he opened, They launched Five Star Bank after phy is often to bank income rather than he made more money by renting out discussing it over a meal. Ramos said leverage it. the old building than he was making Oates called him shortly after saying he The conservative approach has ©been American from City his Businesscore business. Journals Soon, - Not he forwas commercial a couldn’t use stop thinking about forming coupled with simplicity. Oates has full-time real estate developer. a subchapter S corporation bank. The built countless “Buzz boxes” — simple The Buzz Oates Group of Cos. pro- bank now has $345 million in assets. warehouses that attract tenants look- vides a multitude of services, includ- Ramos also shared a more personal ing for competitive rent rates — and his ing construction, commercial real side of Oates, who is “still active” in the companies, which have a combined 120 estate brokerage, management and management of his business following employees, continue to pursue similar development. That cuts down on cost. a health scare about a year ago. Oates deals. He has built structures for clients Oates said he can compete better than had most of his pancreas removed but including AT&T Inc., ConAgra Foods others because he takes no profit from his health has steadily improved since and the University of California Davis. the construction side and doesn’t then, Ramos said. “He’s got a great reputation, he’s borrow. “He was back home and ready to go an honest person and his word is his While construction of commercial about four days later,” Ramos said. bond,” longtime friend and business properties has slowed dramatically in “And I was happy about that because partner Frank Ramos said. “We’ve the past year, the operation developed he’s just a person you like to be around.” been in business for a long time, and about 1 million square feet in 2009. The there is a good reason for that.” Buzz Oates Group of Cos. completed $30 [email protected] | 916-558-7861 © American City Business Journals - Not for commercial use S-30 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Prestigious tenants made Galleria at Roseville | suburb ‘the place to be’

he opening of the Galleria mall in 2000 has pumped millions of Tsales-tax dollars into Roseville and created numerous jobs, and also has boosted the city’s identity in Northern California and nationwide. The four-county region’s largest mall since a major expansion in late- 2008, Westfield Galleria at Roseville has the prestige, size and demograph- ics to attract the likes of Tiffany & Co., Louis Vuitton and Burberry, and to have spurred Macy’s and JCPenney to add 40,000 square feet each. The Galle- ria is about 30 percent larger than the Sunrise Mall and Arden Fair. The 1.5 million-square-foot mall draws more than 16 million people a year, and is 95 percent occupied, mall marketing di- STORY BY rector Stepha- KELLY JOHNSON nie Ringey said. The 1.5 million-square-foot Westfield Galleria at Roseville draws more than 16 million people PHOTO BY That’s even a year. The mall was expanded by 400,000 square feet in 2008 for $260 million. after adding DENNIS MCCOY 400,000 square for Creekside Town Center across is coming from Roseville — “they’re feet in 2008 in a Galleria Boulevard. Then, because marketing (the city of Roseville) for $260 million expansion. Creekside claimed many of the big-box us,” Burrows said. In November, new tenant arriv- chains, plans for what would eventu- And every time Westfield Galleria at als included Sephora, Brooks Broth- ally become Fountains at Roseville, Roseville promotes itself, “that’s an ad ers, Caché, Forever 21 and Johnston & another mall neighbor, were elevat- I didn’t pay for,” given “Roseville” is in Murphy. ed. So, the city the mall’s name, she added. The mall enjoyed double-digit sales got an upscale ‘We were famous Before the Galleria opened, the increases in mid-December compared lifestyle center threat of the new center attracting cus- to a year ago, mall officials said, but instead of what for cars. Now, tomers, stores and sales-tax dollars would not be more specific. was going to be prompted Citrus Heights to establish a As of June 30, the most recent data another big-box (the mall) brought business improvement district around available, the Galleria had generated shopping center Sunrise Mall. $26.1 million in sales-tax revenue to across from the general retail “However, we were surprised that the city since it opened, said Julia Bur- Galleria. to the city.’ we did not see the drop we thought we rows, deputy city manager and eco-© AmericanThe City Galleria Business — Journals - Not for commercialwould,” use said Kathilynn Carpenter, ex- nomic development director. and Highway 65 Julia Burrows ecutive director of the Sunrise Market- The Galleria is the city’s second- — also sold other deputy city manager, Place business improvement district. largest sales-tax generator, behind the stores, hotels Roseville Now, almost a decade later, the Rose ville Automall, which first put the and businesses Galleria demonstrates the effective- city on the retail map. on the area. The ness of public-private partnerships, “We were famous for cars,” Burrows mall became a destination for visitors, Burrows said. said. “Now, (the mall) brought general whether they’re in town for business The mall’s developer paid $27 million retail to the city.” or a sports tournament. for water and sewer lines and other Back when Urban Retail Properties The Galleria also enticed a profes- public infrastructure improvements at Co., the mall’s previous owner, chose sional sports team — the Sacramento the Galleria property, with a guarantee the site and Nordstrom signed on as an Capitals tennis team — to play in its the city would repay the money. The anchor in 1997, “that instantly made parking lot every summer. city has until 2017, but it has paid back the four corners the place to be for fu- Every time the Capitals’ matches are most of the debt, Burrows said. ture tenants,” she said. advertised or aired on national TV — Soon after, tenants were announced with announcers noting that the action [email protected] | 916-558-7860 Lea Received the GIFT of TIME

Lea Spencer was just 36 years old and a married mother of two when she received a devastating diagnosis: cancer. Determined to beat the odds, she entered a clinical trial for a promising new treatment at UC Davis Cancer Center. Almost two decades and four grandchildren later, Lea says, “That clinical trial was the difference between life and death.” Now active in several health care causes, Lea gives others the gift of her time.

At UC Davis Health System, our next medical breakthrough just may have your name on it.

Drs. Fred Meyers and Kit Lam are among the many UC Davis physicians and researchers advancing new and more effective cancer therapies.

A gift for advancing health. S-32 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 The southern suburb’s population almost Elk Grove | doubled this decade, but jobs are needed

hen Rita Velasquez moved two decades ago to Elk Grove, the Wcommunity was like many others in the Valley: small neighborhoods nestled by farmland, a quaint downtown that served as the central core Laguna and quiet streets. Boulevard “Actually, I felt like I went back in is the main time,” said Velasquez, who moved thoroughfare there from Woodland in 1988. “Wood- in Elk Grove, land had a larger population than Elk and also Grove.” home to Apple But how fast things can change. Inc.’s 1,800- employee In July 2000, Elk Grove became the operation. state’s first community to incorporate in the 21st centu- centers, with major retailers such as Elk Grove has about 34,000 jobs, with STORY BY ry. And with new Best Buy, Home Depot and Target. more than one-third in retail. The RON TRUJILLO affordable homes The activity boosted property and abundance of commuters — and state in master-planned sales tax for the city, which built a City workers — increases the average annu- PHOTO BY neighborhoods that Hall and aquatic center and estab- al income to $83,000, one of the highest DENNIS MCCOY attracted families lished a police department. in the region. and young profes- “We had to provide urban services,” “We’re trying to make Elk Grove at- sionals, Elk Grove became one of the said City Councilman Gary Davis, a tractive to business,” said Davis, who fastest-growing cities in the nation. Sacramento-area native who moved to talked about possible incentives by the The city — about a dozen miles south Elk Grove six years ago. city to lure employers, from covering of the Capitol — had about 75,600 resi- But with the boom came challenges. moving costs to helping purchase fur- dents in 2001. That number almost “Elk Grove certainly has some grow- niture. “Our reputation is changing, doubled to 141,400 in 2008. ing pains,” Davis admitted, citing a but these things take time.” The city’s breakneck seven-year huge imbalance of jobs — about one The city has attracted a handful of population increase included adding job for every four residents in the work high-profile companies, including all 23,000 residents in 2004, a 27.3 percent force. of the major health care systems in gain from 2003. That hard-to-match The lack of jobs is most apparent the region and Apple Inc. The tech gi- growth made Elk Grove the nation’s during the early-morning and evening ant — developer and maker of Macs, fastest-growing city, with a 12 per- commutes, when tens of thousands iPods and the popular iPhone — has cent increase from July 1, 2004, to June of residents leave Elk Grove for other about 1,800 employees at its Laguna 30, 2005, according to the U.S. Census communities in the region for work. Boulevard operation, just east of In- Bureau. “The No. 1 issue is the imbalance be- terstate 5. The boom has affected everything, tween rooftops and jobs,” said Steve “Apple is really a sleeping giant” in from city parks and services to schools. Czarnecki, executive director of the Elk Grove, said Czarnecki, adding that For example, Elk Grove Unified© AmericanElk CityGrove Business Economic Journals Development - Not for commercialthe company use owns land around its fa- School District’s enrollment expanded Corp. “It was really a bedroom commu- cility. “The hope is that the company from 47,000 students in 2000 to 62,000 in nity; that was the genesis of Elk Grove. looks to grow and expand.” 2009 — which gives the city more stu- We want to keep more people and more The Economic Development Corp. dents than there are people in all but dollars in the community during the has a goal of creating 1,500 jobs by 2015 three cities in the Sacramento region. day.” in Elk Grove. “It just went crazy,” said Velasquez, It’s a battle that tops almost every- “That’s a modest goal,” said interim executive director of the Elk one’s agenda, from the City Council to Czarnecki, who is focusing on white- Grove Chamber of Commerce. the chamber’s Velasquez. Two decades collar positions. “It’s clean-tech, it’s City leaders cite numerous reasons ago, Elk Grove was a small community. medical, it’s professional services.” for the growth, but most agree that the Now, the city is the second-largest in “People would like to see a thriv- development of the master-planned the four-county region. It’s more than ing, independent atmosphere,” Da- community of Laguna was the major double the cities of Davis and Rock- vis said. “We have to build a complete draw. Laguna featured new homes — lin, and has 30,000 more people than community.” from entry-level to gated residences Roseville. — new schools, parks and shopping But the city desperately needs jobs. [email protected] | 916-558-7865 qualityality construction

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Justice Facilities Telecommunications

Educational Facilities Health Care Facilities quality construction since 1959 institutional commercial industrial Airports Power Facilities www.roebbelen.com | 915.939.4000 S-34 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Return of baseball to the region has paid off Raley Field | for West Sacramento and the riverfront

minor-league ballpark has been a big-time hit, with a major eco- A nomic effect in West Sacramento. Raley Field — home of the Triple-A Sacramento River Cats — has become the centerpiece of an evolving neigh- Raley Field borhood and a fast-growing city, while is home to also bringing professional baseball baseball games, back to the Sacramento region. concerts The $30 million ballpark has “sparked and events. an entire riverfront development,” said The ballpark Denice Seals, chief executive officer in West for the West Sacramento Chamber of Sacramento Commerce. “Because of Raley Field, has helped we have conversations about street cars spur riverfront and the downtown core.” development. Indeed, the ballpark is much more than a 14,414-seat stadium. Raley Field developments along with commercial league baseball the past 10 seasons. makes a pitch for plans, has received state funds and “The stadium is new, and there is STORY BY a new West Sacra- continues to evolve, albeit slowly with a honeymoon period — and ours has RON TRUJILLO mento, city lead- the recession. lasted more than most,” said Gabe ers say. West Sacramento attracted the ball- Ross, vice president of media for the PHOTO BY Raley Field and club with affordable land and assisted River Cats. DENNIS MCCOY the Ziggurat, for- with financing for the privately fund- Now, the ballclub, and the stadium, mer headquarters ed stadium, while expediting the 14- have entered a second decade in the of The Money Store (see story, page month construction effort. region. And, like most marriages after S-18) and now occupied by the state It was an attractive package for River 10 years, the ballclub must continue to Department of General Services, are Cats majority owner Art Savage, who communicate and connect with fans. the first projects of the $300 million of bought the Vancouver Canadians in “The challenge for us is being cre- public and private investment planned 1998 and moved the Triple-A World ative,” Ross said. “We want to reach to redevelop the waterfront, said West Series champions to Raley Field two more people.” Sacramento Mayor Christopher Ca- years later. Savage died in November. Winning teams — including two baldon, who held the city’s top-elected The River Cats arrival brought pro- stints of back-to-back PCL champi- position when the ballpark opened. fessional baseball to the region after a onships in 2003 and 2004, and again The ballpark and the River Cats “re- 24-year absence. The Sacramento So- in 2007 and 2008 — have helped, along placed the somewhat tarnished image lons, one of the original Pacific Coast with top-notch talent, including former of West Sacramento with a new brand League teams, played off-and-on from Cy Young Award winner Barry Zito that has made our town emerge as one 1903 to 1976 in Sacramento. and 2004 American League Rookie of of the region’s most popular places to The region’s baseball fans were the Year shortstop Bobby Crosby. live, work and play,” Cabaldon said.© Americanready. City Business Journals - Not for commercialRaley use Field handles about 175 events “And, in some ways, most important- Raley Field sold out opening night a year, from 72 River Cats home games ly, the David-versus-Goliath ... win to May 15, 2000, including a few thousand to nonprofit fundraisers. Corporate build the nation’s most successful Tri- enjoying the new stadium from the meetings and concerts also are sched- ple-A ballpark and team fundamental- grassy berms in left and right fields. uled at the stadium during the year. ly changed our own level of aspiration The ballpark and the River Cats, the But the biggest benefit from the ball- and expectation as a community.” affiliate of the Oakland A’s, have been park could go beyond the outfield fence Seals agrees, adding the ballpark is a hit since. and the stands, Seals said. the cornerstone for development in The River Cats attracted 861,808 fans “The economic impact (the ball- the Bridge District, the riverfront — during the inaugural season, and in- park has) is to inspire future growth and West Sacramento. The Califor- creased to a record 901,214 in 2001. The in the community ... the businesses nia State Teachers’ Retirement Sys- ballpark’s attendance dropped to 657,095 yet to come,” she said. “The opportu- tem headquarters is near the stadium, last season. Despite the decline, about nity to change the perception of the and several high-profile projects are 200,000 fewer fans than its peak season, community.” planned for the riverfront. The Bridge the River Cats continue to dominate District, complete with new-home with the largest attendance in minor- [email protected] | 916-558-7862 BROWN CONSTRUCTION celebrating over years 4 5 in the Sacramento region

George Sim Community Center, Sacramento

MULTI-FAMILY I MIXED-USE I COMMERCIAL I INSTITUTIONAL I RETAIL I INDUSTRIAL S-36 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Always complicated, California’s The state budget | process grows contentious 2P[XUâ]XP]bPaT]^bcaP]VTabc^[PcTQdSVTcb B^fWPc½bPWTPS.º2P[XUâ]XPXb BcPcTT\_[^h\T]caXbTbêTaP[[ QdcfWT]cWT;TVXb[PcdaTfPb' SPhb[PcT ]^c^dcÛcWTf^^SbP]Sf^]½c X]_PbbX]VcWT! '! ( "#QX[[X^] QTUâb^\TcX\T»9TP]A^bbTgTRdcXeT STR[X]Tb[^RP[[h QdSVTc_PRZPVTPaTRâSfPbbTcCWT SXaTRcâÛcWT2P[XUâ]XP1dSVTc?a^YTRc C^cP[bcPcTT\_[^hTTbX]cW^dbP]Sb bPXSX]=êT\QTa \^]cWb[^]VST[Phbc^__TS_Ph\T]cb # CWT]d\QTaÛbcPcTT\_[^hTTb c^bcPcTeT]SâbP]S "%" bT]cR^d]cXTb BRWfPaiT]TVVTa½bQdSVTc_a^_^bP[fPb "$ WPbX]RaTPbTS$%_TaRT]c "!"% " "& "$'& bRaP\Q[X]Vc^_PbbcWTXa^f]QdSVTcbPUcTa Tg_TRcTSX]TPa[h9P]dPahP]S\âT X]cWT_Pbc!$hTPab " !& " bTTX]VfWTaTbcPcTRdcbf^d[SWXccWT\ RdcbWPeTQTT]UâTRPbc8]UPRc]^^]T !% % !$ 1dcTeT]PbXV]TSQdSVTcSXS]½cbc^_cWT_PX] Xb^_cX\XbcXR ! !!(% 1hcWTT]SÛ! 'VT]TaP[Ud]SaTeT]dTfPb º8cXbd][XZT[hcWPccWT;TVXb[PcdaTRP] '" \X[[X^]QT[^fTbcX\PcTbP]S2^]ca^[[Ta PSSaTbbP[[ÛcWTbcPcT½b\PbbXeT ½'$ ½'& ½'( ½( ½(" ½($ ½(& ½(( ½ ½ " ½ $ ½ & ½ ( 9^W]2WXP]VfPa]TScWTbcPcTfPbad]]X]V ^]V^X]VQdSVTc_a^Q[T\bfXcW C^cP[bcPcTT\_[^hTTb_TaRP_XcP ^dcÛRPbWB^cWT;TVXb[PcdaTP]S6ê _Ta\P]T]c^]V^X]Vb^[dcX^]bX]cWT]Tgc "%" 0a]^[SBRWfPaiT]TVVTafT]cQPRZc^cWT hTPa»UUXRTbPXSCWPcP\^d]cR^d[SR[X\QPbcWT ½ ' ' ½ ( '( êTaaPXSbÛ bcPcTUXVWcb[PfbdXcb # ' ! R^d]chUd]SbP]S5da[^dVW5aXSPhb¹ 5XbRP[hTPaQTVX]b^]9d[h 8]=êT\QTaÛTPRWhTPa fWXRWP\^d]cc^P $_TaRT]c_PhRdc B^daRT)2P[XUâ]XP4\_[^h\T]c UâcT]bÛcW^dbP]SbÛbcPcTfâZTab 3TeT[^_\T]c3T_Pac\T]c

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Total 18,969 square feet (916) 852-6488 Yuba City, California Completed April 2009 sislerandsisler.com S-38 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Gov. a “mixed bag” Arnold Schwarzenegger | for business

hen Gov. Arnold Schwarzeneg- businesses, but small is a mixed bag,” Kabateck said. “He’s ger booted Gray Davis out of of- businesses that will done things to help small business, but Wfice in 2003 in the first guberna- harness their entre- there’s still much unfinished business torial recall election in California his- preneurial spirit to in terms of progress for Main Street.” tory, the state faced a budget shortfall help us achieve our Part of the problem is a Legislature of at least $21.1 billion. climate goals.” controlled by Democrats that stop Re- The Terminator — easily the most Policy develop- publican, pro-business bills from get- high-profile of the state’s 38 gover- ments like this cre- ting out of commit- nors — buried a $60 billion budget gap ated an instant mar- tee, he said. last summer and is looking down the Arnold ket for business, said Organized la- ‘He is not a king sights of another projected deficit of Schwarzenegger Barbara Hayes, exec- bor isn’t pleased, or an emperor almost $21 billion by July 2011. utive director of the either. Voted into office by business inter- Sacramento Area Commerce & Trade “This governor —he has to ests anxious about the economy, the Organization. has been a tremen- charismatic governor created a buzz in “It’s allowed us in the Sacramento dous disappoint- work with the Sacramento but has delivered a mixed region to use it as an asset as we try to ment for what he bag of goods so far. get companies to relocate here. That hasn’t done for Legislature.’ It’s been a celebrity-crazed ride alone has been huge,” she said. “But working people in Allan Zaremberg highlighted by gaffes like the gov- there’s been missed opportunities. The California,” said president and CEO, ernor’s quip state hasn’t followed up with the cre- Steve Smith, a CalChamber STORY BY about “girlie ation of programs to encourage com- spokesman for the KATHY ROBERTSON men” — legisla- panies to locate in California.” California Labor tors who balked Business reaction to the mandate is Federation. “He’s at his 2004 bud- mixed, however. shown no leadership on jobs, and budget plan — and outrage from nurses “We did not want California to be get cuts have hurt workers.” when Schwarzenegger called them the only state in the country to adopt He also lost the butt-kicking fight “special interests,” angry because it,” Zaremberg said. “It means higher with California nurses over relaxing “I kick their butt.” energy costs, and green jobs are going staffing ratios in hospitals. Yet comprehensive workers’ com- elsewhere.” “I believe it sets a precedent for op- pensation reform in 2004, touted by Not all of them. The Sacramento re- position in California that there isn’t a some as Schwarzenegger’s first major gion led the state in green job growth sacred cow — you can take on some- accomplishment, has saved businesses between 1995 and 2008, according to body with the popularity he enjoys if piles of money. a study by Next 10 and Collaborative you fight hard for the right cause, “ “I don’t think there’s any question Economics. Green jobs in the region California Nurses Association presi- the economy has benefited from bil- grew by 87 percent, to more than 13,100 dent Deborah Burger said. lions of dollars in savings in workers’ over the 13-year period. Schwarzenegger tried and failed comp since he’s been in office,” said Sacramento tourism has benefited to get health care reform in Califor- Allan Zaremberg, president and chief from a stable tenant at the Hyatt — nia two years before President Obama executive officer at CalChamber. Schwarzenegger’s home away from launched his effort. Some of the provi- He also has vetoed just about every© American home City — Businessand a constant Journals parade - Not offor commercialsions use are similar, and the state attract- one of the chamber’s so-called job-kill- movie stars and other visitors. ed a lot of attention with its effort. er bills lobbed on his desk by Demo- “We’ve had more dignitaries and “The difference between California crats that control the state Legislature. more events in Sacramento because and the federal situation is in Sacra- “I can’t imagine how much higher Arnold Schwarzenegger is still a ce- mento, you can’t print money like you employer costs and regulations would lebrity, as well as the governor,” Za- can in Washington,” Zaremberg said. be without a governor willing to veto remberg said. Schwarzenegger can’t print money those,” Zaremberg added. Small businesses have gotten more to balance the state budget, either. No- Of course, there are exceptions, such attention since the governor appoint- body likes the program cuts that filled as landmark legislation in 2006 to re- ed Marty Keller as the state’s small- the hole, but not all fingers point to the duce greenhouse gas emissions. business advocate in 2007, said John governor. “Some challenged whether Assem- Kabateck, a former Schwarzenegger “He is not a king or emperor — he bly Bill 32 is good for business,” the staffer who leads the California office has to work with the Legislature,” governor said in a signing ceremony. of the National Federation of Indepen- Zaremberg said. “Unquestionably, it is good for busi- dent Business. ness. Not only large, well-established “Overall, (Schwarzenegger’s) record [email protected] | 916-558-7869 © American City Business Journals - Not for commercial use S-40 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Overcoming federal regulations, neighbors Casinos | and traffic concerns, tribes cash in on gaming

rom just barely scraping by financially a couple decades ago, three Flocal Native American tribes have become powerful players in the region, creating good-paying jobs and establishing financial pacts with county governments. The Native American rancherias — basically small, rural reservations in the state — had rich cultural tradi- tions for generations, but they struggled with poverty until they found gaming. The local tribes have followed different paths to gaming and operating multimillion-dollar, Las Vegas-style casinos that are major tourist destina- STORY BY tions, with live en- MARK ANDERSON tertainment and a variety of restau- PHOTO BY rants in what oth- DENNIS MCCOY erwise have been Red Hawk built in 2008, is the region’s newest casino. It employs 1,650 people. remote areas. “They grow more sophisticated over of assimilation in the last century, construction allowed the 1,650-employ- time,” said Alan Meister of Nathan As- the government tried to break up ee casino to open in June 2003. The casi- sociates Inc., adding that tribes often rancherias. no quickly generated a hefty $6 million are seen as revenue sources for county The Rancheria Act of 1953 allowed profit every week after it opened. governments. “The thing people forget the federal government to end its trust In El Dorado County, the Shingle is that the primary beneficiary of trib- responsibility to tribes. In Auburn, the Springs Band of Miwok operated a al gaming is supposed to be the tribe.” rancheria trust of the United Auburn casino on its land in 1996 and 1997, The tribes also have emerged as ma- Indian Community was terminated in but it was shut down by neighbors jor campaign contributors, especially 1967, with the idea that members could who would not let cars pass over their when gaming issues are on the ballot. buy their own land. But few could private road. It was a long-standing But it has been a long — and often afford it. problem for the tribe, which had been painful — road. The action to end rancherias was a land-locked since Highway 50 opened The Yocha Dehe Wintun Nation was disaster, and the federal government in the 1960s. the first locally to start gaming in 1984, acknowledged that in 1972. After years of suits with neighbors with a 1,200-seat bingo parlor on its In 1988, the Indian Gaming Regula- and the county, the tribe prevailed and Rumsey Rancheria. tory Act was approved. The United Au- constructed its $200 million Red Hawk The rancheria expanded bingo hours© American burn City Indian Business Community Journals then - Not sought for commercial Casino use in 2008, which included a $45 and days, and then featured bingo-style restoration of its federal recognition, million freeway on- and off-ramp. slot machines and 24-hour operations. which it received in 1994. With the pending arrival of the Through the 1990s, as one expan- The tribe in 1997 negotiated a memo- 1,650-employee Red Hawk Casino, oth- sion was completed, it was followed by randum of understanding with Placer er casinos, first Cache Creek and then another. By the late 1990s, the casino County, paving the way for a proposed Thunder Valley, announced massive started looking more like a Las Vegas casino just outside of Roseville. expansions in 2007. But as the economy operation. It later became the center- Lawsuits from the cities of Rock- declined in late 2008, the expansion of piece of an elaborate resort, featuring lin and Roseville to block the casino Thunder Valley was greatly reduced. a golf course, equestrian center, luxu- worked their way through the courts And as negotiations with Yolo Coun- ry hotel, spa and seven restaurants. for years, but eventually were rejected ty officials bogged down, Yocha Dehe In contrast, before it could even con- by a federal court in September 2002. canceled its expansion plans for the sider gaming, the United Auburn In- In October, the tribe and its partner, 2,400-employee Cache Creek Casino in dian Community had to struggle just Station Casinos Inc. of Las Vegas, be- October 2009. to get recognized by the federal govern- gan building a 200,000-square-foot, ment. As part of the federal program $215 million casino. Round-the-clock [email protected] | 916-558-7874 BOMABOMACornerstone of the Commercial Real Estate Industry

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BOMA Sacramento aims to promote the highest professional standards for our industry by providing resources, education, business relationship opportunities, legislative advocacy, and regulatory representation. Join BOMA Sacramento Today! 916.443.9092 www.bomasacramento.org S-42 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Cities spring up Housing on the march | as suburbia grows CWTBPRaP\T]c^PaTP½b_^_d[PcX^]Tg_[^STSX]TPa]TbcX]cWT_Pbc`dPacTaRT]cdahRaTPcX]V %$ PQ^^\UâW^\TQdX[STabT\_[^hTTbP]ST\_[^hTab>]cWTS^f]bXSTXcP[b^RaTPcTS\PbbXeT ;8=2>;= (" X]RaTPbTbX]caPUUXR^]cWTWXVWfPhb3daX]VcWPccX\T]TfRXcXTbX]Râ_âPcTS)FTbcBPRaP\T]c^ %$ ' X] ('&2Xcadb7TXVWcbX] ((&4[Z6aêTX]! P]SAP]RW^2âSêPX]! "8]cWTUXabcWP[U ?;024A2>D=CH #( ÛcWT_PbcSTRPST4[Z6aêTP]S;X]R^[]fTaTP\^]VcWTUPbcTbcVa^fX]VRXcXTbX]cWT A>2:;8= (" A>B4E8;;4 4;3>A03>2>D=CH ]PcX^]¹;X]R^[]UâTgP\_[TVaTfUa^\&#'#aTbXST]cbX] (( c^#! !%X]! & ?;024AE8;;4 P]X]RaTPbTÛ#%"_TaRT]c1dcfWT]cWTTR^]^\hb[^fTScW^bTcf^RXcXTbfTaT 28CADB 4;3>A03> $ ' 74867CB 5>;B>< 78;;B P[b^P\^]VcWT[TPSTabX]W^\TUâTR[^bdaTb ' $ #( " H>;>2>D=CH ' B02A0<4=C> A0=27> F4BC 2>A3>E0 =TfbX]V[TUP\X[hW^dbX]Vd]Xcb 30E8B ' B02A0<4=C> % BPRaP\T]c^2^d]ch $ (( # #& B02A0<4=C>2>D=CH # 2Xch C^cP[Va^fcW 4;:6A>E4 2Xcadb7TXVWcb'$ "% $ 4[Z6aêT #"" " 5^[b^\ !#($ AP]RW^2âSêP "&"# ?TPZW^dacaPUUXR ! BPRaP\T]c^$%% " %"" 5aTTfPh !#" X]cTaRWP]VT ETWXR[Tb_TaW^da 7XVWfPh$ && %$ %$cWBc ½( ½(! ½(# ½(% ½(' ½ ½ ! ½ # ½ % ½ ' (' 3PcPQTVX]bX]hTPaÛX]Râ_âPcX^]TgRT_c4[Z6aêTfWXRWQTVX]bcWTU^[[^fX]VhTPa FPcc0eT ### ?[PRTa2^d]ch %% $ IX]UP]ST[3a 2Xch C^cP[Va^fcW "# " ;X]R^[] "('# !%'( $ (( 5^[b^\1[eS A^RZ[X] !(% !" '" ! A^bTeX[[T!!#"% ! ' BR^ccA^PS $ '% & 7XVWfPh%$ 8' ! 7XVWfPh%$X]?[PRTa2^d]chbPf ½( ½(! ½(# ½(% ½(' ½ ½ ! ½ # ½ % ½ ' ' cWT[PaVTbcX]RaTPbT)!'%_TaRT]c BcP]UâS ( PccWT ' X]cTaRWP]VTP]S H^[^2^d]ch !'(_TaRT]cPcBcP]UâSAP]RWA^PS 2Xch C^cP[Va^fcW AP]RWA^PS &# ! 3PeXb ##"$ FTbcBPRaP\T]c^ $('$ 8]cTabcPcT' #" '$ 1dbX]Tbb' $ " © American City Business Journals2P_XcP[2Xch5fh - Not for commercial use ! & # 0]cT[^_TA^PS ½( ½(! ½(# ½(% ½(' ½ ½ ! ½ # ½ % ½ ' "" (' B^daRT)2^]bcadRcX^]8]SdbcahATbTPaRW1^PaS 3^dV[Pb1[eS "" 8]cTabcPcT(( 4\_[^h\T]c 4[Z6aêT1[eS #" % $(%& '$ 8]cW^dbP]Sb #($' ;PVd]P1[eS $$ # (( ! ( " $( 2P[eX]TA^PS ! $(( # ' '$" '$' % & %%& '$

© American City Business Journals - Not for commercial use S-44 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 City’s commitment to growth Downtown hotels | showed up as subsidies

or the past two decades, the city of a first-class hotel to downtown,” Tom Sacramento has made a commit- Lee, acting director of SHRA, told the Fment to draw new hotels into the Business Journal in 1995. “We’re now central city and away from the suburbs over that hurdle, and we want to keep by offering land, money and tax defer- moving forward.” ments to willing developers. The next year, Sacramento and Mu- “Hotels are a part of your growth,” tual Life came to an agreement to end said Tom Friery, city treasurer from the subsidy, and the Hyatt was sold to 1978 to 2007 who helped develop financ- HCV Pacific Partners. ing for the projects. “The leisure, enter- The city sifted through competing tainment, convention business is what offers for what eventually became the grows a city without taxing the resi- Sheraton Grand Sacramento. dents. It brings people to town.” “The Sheraton is the deal that The city’s efforts to subsidize and worked best for the city,” Friery said. partner with downtown hotels largely The financing deal was the first of its have paid off for the major players — kind in the city, and maybe the state, he the developers, said. “We literally financed 100 percent STORY BY the city and the of the project. There was intense de- JENNIFER MYERS convention center. bate. That thing died a million deaths PHOTO BY But that doesn’t before it finally worked.” mean it was easy. In the end, the city and developer Da- DENNIS MCCOY “I can’t believe vid Taylor sold $91 million in 30-year the hours and the revenue bonds in 1999. The city kicked lawyers that were involved,” Friery in a 700-space parking garage and $8 said of the efforts to develop the Hyatt The Hyatt Regency was Sacramento’s first million in cash, while Taylor and his Regency, Sacramento’s first high-end high-end hotel in the downtown core. partners contributed the historic Sac- downtown hotel. ramento Public Market building at The Hyatt opened in 1988, the result draw conventions to town. 13th and J streets. The Sheraton was of a complicated public-private part- The city spent $81 million expand- owned by Sacramento Hotel Corp., nership between the Sacramento Hous- ing the Sacramento Convention Center which also administered the bonds. ing and Redevelopment Agency and in order to hold larger events and con- The 503-room hotel opened in 1999. It influential developers Gregg Lukenbill, ventions. The expansion, completed in was sold in 2008 for $130 million — leav- Joe Benvenuti and Bob Cook. 1996, tripled the size of the largest meet- ing the city with a profit of $44 million, The agency put $13 million toward the ing venues in the convention center. half of which was set aside for Taylor hotel, and also commited $1.5 million That capacity also increased the and his partner CIM Group for future every year for 75 years. The city owned need for hotel rooms. redevelopment on J, K or L streets. the land the hotel sits on and about half “Some of these organizations that “Those people that were naysay- of the Hyatt’s parking garage. put on trade shows, they might have ers back in the day, they couldn’t have The hotel was an immediate suc- 1,000 people, and if you didn’t have the missed it any worse than they did,” cess, boasting an occupancy rate above© American rooms, City they Business were Journalsgoing to pass- Not you for commercialsaid Steve use Hammond, president of 70 percent even in the recession of the over to go to another community,” Fri- the Sacramento Convention and Visi- early 1990s and generating about $2.4 ery said. “We have the Legislature and tor Bureau. “The hotel has given us a million a year in taxes for the city in its the Capitol, we have the rivers, we have great opportunity to book more and first seven years. history with Sutter’s Fort. Those ame- larger conventions, and at the same But by 1992, developers Lukenbill nities will attract people. But if they time when the hotel was purchased and Benvenuti were heavily involved have 800 to 1,000 people and you can’t back, the city realized a significant re- in developing North Natomas, and handle them, you lose them. Then ho- turn” on its investment. cash-flow problems led to the Hyatt’s tels get hurt, taxi cabs get hurt, movie The huge up-front cost of develop- primary lender, Mutual Life Insurance theaters get hurt.” ing a hotel means public money is al- Co. of New York, foreclosing on the To handle more visitors, the city most always needed, Friery said. But, property. The city continued its $1.5 looked to get out of its Hyatt deal and he added, because hotels are such an million-a-year payment to Mutual Life, put money into a hotel closer to the economic engine, the public will get its which hampered its ability to subsidize convention center. money back. another hotel — an option that cap- “The Hyatt deal was originally set tured the interest of officials seeking to up to get over the hurdle of bringing [email protected] | 916--558-7867 This searchable version of the Sacra- Searchable Enhanced Data Searchable by company, by executive mento Business Journal’s Book of Lists and by business ranking is a new resource to help you build 24/7 Updates business. You can use this tool for sales Updated information on company prospecting, career networking and proﬁ les, contacts and news business research. ©Start American growing City sales Business Journals - Not for commercialCompany Alerts use Identifying updates on “favorite” now by going to our website. companies that you choose

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Visit our website for more information: http://sacramentobusinessjournal.com/ibookoﬂ ists/ S-46 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 The 1980s brought high-tech giants Hewlett-Packard 1984 | and Intel, sparking growth in Folsom and Roseville

ooking across the Sacramento-area’s high-tech landscape, many of Lthe big names are here: Intel Corp., Hewlett-Packard Co. and Apple Inc. NEC Corp., Oracle Corp. and hundreds of smaller, lesser-known companies also operate in the region. But it wasn’t always so. When H-P — driven by the desire to set up manufacturing operations close to its Silicon Valley headquarters and lured by cheap land — opened in rural Roseville in 1979, its transplanted employees must have felt a bit out of place. The city at the STORY BY time had about 25,000 GARY CHAZEN residents. But other compa- PHOTO BY nies soon followed DENNIS MCCOY H-P, including Intel. “They were coming pretty fast and furious there for a while,” said Al Gianini, who worked for the California Office of Business and Intel opened in the region in 1984, and now employs 5,500 people at its Folsom campus. Industrial Development at the time and was later director of the Sacramento H-P would hire another 2,000 in the with 8,800 residents. It’s now approach- Area Commerce & Trade Organiza- next year, culling talent from Califor- ing 70,000 residents and, like Roseville, tion. “It was like one a year, world-class nia State University Sacramento and is home to a bevy of tech companies manufacturers, so everybody got fo- the University of California Davis, and and places to shop and eat. cused on high-tech. Everyone was say- also from nearby University of Nevada Sacramento certainly enjoyed the ing ‘bring in another Intel,’ like it was Reno and Chico State. tech boom as well, with Objective Sys- easy.” “We had reached critical mass,” said tems Integrators Inc. and Level One In 1983, NEC moved in across the Larson, now an independent consul- Communications. The latter was even- street from H-P, where it would soon tant. H-P, and later Intel, was in a posi- tually bought by Intel for $2.2 billion, employ more than 600, and lesser- tion to play up its new role as a com- which created more local companies. known Silicon Valley telecom firm munity leader and major employer. At the moment, many of the large Avantek arrived in Folsom and quickly Larson said H-P general manager Al companies that first ignited the re- ramped up to 700 employees. Seely called the company “a spark plug gion appear to be retrenching, with But arguably one of the best-known for the community” with outreach H-P about half its size at its peak in tech companies opened in the region© American and City philanthropy. Business Journals “He worked - Not closely for commercial Roseville use and NEC poised to shut in 1984. Intel — the fast-growing chip- with the United Way. He took it very down one of its two production lines in maker and a favorite of investors — seriously.” March. had 1,200 employees at its Folsom cam- The arrival of the tech companies “We will never see those size com- pus three years later. Today, the com- had another effect. panies coming into the area again, at pany has about 5,500 employees in Fol- “Roseville was a nice community least from the high-tech manufactur- som, and is the second-largest private before H-P got there, and it’s still nice, ing arena,” Gianini said. “Those types employer in the region. and Folsom is, too,” Gianini said. “But of jobs are going offshore.” And H-P wasn’t sitting still either, in H-P and Intel changed the demograph- But their arrival will continue to 1984. ics of both of those communities.” have a long-lasting effect on the region. “1984 was a big year for us,” said Ken The city’s population certainly “This area has enough of a high-tech Larson, H-P public affairs manager for took off. Roseville now has more than base so we can say we have a high-tech Sacramento from 1984 through 2000. 110,000 residents and is the region’s re- base,” he said. “It certainly transferred The company opened its second large tail leader, with the largest shopping from those companies.” building and expanded to 1,500 employ- mall and auto mall. ees in Roseville. In 1980, Folsom was a blip on the map [email protected] | 916-558-7865 JANUARY 22, 2010 | SACRAMENTO BUSINESS JOURNAL 25 YEARS OF BUSINESS | S-47 Region collaborates among schools, utilities Green biz | and nonprofits in hopes of creating a hub

lean-tech is a relatively small sector of the region’s economy, Cbut the fast-growing industry has Premier Power many hoping it will attract enough Renewable innovation and jobs to be considered Energy Inc., a hub. based in Some say the seeds that are helping El Dorado Hills, designs, to spawn successes today were planted engineers decades ago by utilities — primarily and builds the Sacramento Municipal Utility Dis- solar power trict — and the University of Califor- systems for nia Davis. commercial, SMUD has promoted energy effi- government ciency and renewable energy for de- and utility cades. UC Davis markets in the STORY BY has long been a United States, MELANIE TURNER leader in cutting- Spain and Italy. edge transporta- PHOTO BY tion technologies, toward a $308 million smart-grid in- development and grants at SARTA. DENNIS MCCOY as well as many frastructure investment. The funds There were 29 known clean-tech aspects of envi- will support efforts by members of a companies in the region in 2005, he ronmental research. joint venture among SMUD, Califor- said. Today there are close to 100. A few homegrown companies are nia State University Sacramento, the “Because of the momentum we have spinoffs of UC Davis, including West state Department of General Services here, there seems to be broad accep- Sacramento’s Bloo Solar Inc. and Fol- and the Los Rios Community College tance that we have the potential to grow som’s SynapSense Corp., which uses District to expand smart-grid technol- this into a significant business sector,” technology developed at the university ogy. Smart grids use digital technology he said. to reduce energy consumption in data to improve electrical power efficiency Much of this sector’s current growth centers. and reliability. is tied to efforts made over the years “I think one of the most significant Last year , the Los Rios Communi- by the region’s utilities to promote en- things about the clean-energy sector ty College District received a $2 mil- ergy efficiency and renewable energy, for the Sacramento region is that it lion federal grant to provide educa- Stack said. Utilities turned their focus has really united economic develop- tion and training in clean energy and toward energy efficiency after the 1973 ment partners across the region,” said technology. oil crisis, he said. Kristine Mazzei, managing partner of Clean-tech also has created thou- Last year, SMUD’s 1-megawatt so- Valley Vision, a nonprofit focused on sands of jobs, with local officials hop- lar energy plant at Rancho Seco — its regional concerns. “We’re all speak- ing the industry lives up to the promise first utility-scale solar power plant ing with one voice and focusing on one high-tech showed in the 1990s. — celebrated 25 years of service. PV1 initiative.” The Sacramento region led the state supplied about 800 homes with elec- Among those rallying around the© Americanwith City 87 percent Business clean-tech Journals job- Not growth for commercial tricity use when it began producing pow- sector are colleges and universities, between 1995 and 2008, from 7,019 jobs er in 1984. At the time, it was one of Sacramento Metro Chamber, Sacra- to 13,102 jobs in 2008, according to a the largest photovoltaic plants in the mento Area Commerce & Trade Orga- Next 10 and Collaborative Economics world. nization and Sacramento Area Region- report. SMUD now operates six photovoltaic al Technology Alliance. The Sacramento region is not alone plants at the site, with a combined ca- “It’s really pretty exciting,” Mazzei in its pursuit to establish a solid clean- pacity of 3.2 megawatts. said, adding that outsiders are tech sector. Worldwide interest in clean The utility is on track to receive “wowed” by the level of partnership energy has grown as communities 20 percent of its energy from renew- and shared commitment to clean work to address climate change. able sources — and would be the first energy. But locally, the expansion of clean- major California utility to do so. The This collaboration has helped attract tech has been recent. utility plans to increase that to 23 state and federal grant dollars, she said. “We’ve seen pretty remarkable percent by next year and 37 percent SMUD, for example, was recent- growth in our clean-energy busi- by 2020. ly awarded $127.5 million in federal ness sector in the last four years,” economic stimulus funds that will go said J.D. Stack, director of program [email protected] | 916-558-7859 S-48 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Family-owned newspaper The McClatchy Co. | chain joins Fortune 1000

family-owned company built on headlines has grabbed many of A its own during the past quarter- century, with a buying binge — and a walk on Wall Street. It’s a story about the evolution of a midsize newspaper chain that became arguably one of the most influential in the industry. The McClatchy Co. — best known to many as owner of The Sacramento The McClatchy Bee — enjoyed an initial public offering Co. has in 1988, generating a hefty payday that aggressively paved the way for buying more newspa- cut costs, pers, increasing revenue and luring in- including laying vestors, including many in the region. off workers at The Sacramento-based company The Sacramento bought two large newspapers, The Bee, to remain News & Observer profitable. STORY BY in Raleigh, N.C., MELANIE TURNER and the Star Tri- financial hangover from the Knight Rid- community through charitable contri- bune in Minne- PHOTOS BY der purchase. It also created about $3.3 butions,” Saltzman said. DENNIS McCOY apolis, that almost billion in debt, which has been whittled The company is a major donor to doubled its size in to $1.95 billion the past three years. philanthropic efforts, contributing the mid-1990s. The And analysts have criticized the com- “tens of millions of dollars” over the acquisitions helped McClatchy pass pany, including a couple of rants from years, Pruitt said. the $1 billion revenue mark in 1999, CNBC’s “Mad Money” host Jim Cra- “All of us should do as much as we making it the largest publicly traded mer, as the company endures financial can to support them and help them company in the Central Valley. losses and shares tumble to less than succeed,” Tsakopoulos said. Then, McClatchy made a head- $4, including a lengthy period as a pen- Advertising and circulation have turning, though some argue a head- ny stock. been more of a struggle than a success scratching, move: a $4.5 billion deal for Aggressive cost-cutting efforts have for McClatchy in recent years. Knight Ridder Inc. in 2006, easily the eliminated about one of every three For example, The Bee’s average largest-ever by a Sacramento-based jobs, including hundreds at The Bee, weekday circulation dropped 14.1 per- company. through buyouts and first-ever com- cent to 217,545, about 90,000 less than Barbara Hayes, executive director panywide layoffs. The company’s one- a year ago, according to the Audit Bu- of the Sacramento Area Commerce & time peak of 15,000 employees has reau of Circulations. It’s an about-face Trade Organization, said McClatchy shrunk to 8,600, with about 900 at The from the 20 consecutive years of circu- brings “tremendous value” to the re- Bee and McClatchy headquarters at lation reached in 2004, a record for the gion as the nation’s third-largest news-© American21st City and BusinessQ streets. Journals - Not for commercialnewspaper use industry. paper chain — and its only Fortune But even a hard-hit McClatchy is The company has also endured dou- 1000 company. larger and more significant than most ble-digit declines in revenue, including “Having a major corporation such as others in the region. a 28 percent drop to $266 million in the that is definitely a benefit to our com- “On a daily basis we have a big foot- third quarter. But the company is prof- munity,” said Angelo Tsakopoulos, print” with The Bee and its online op- itable, with third-quarter income of chairman of AKT Development Corp. erations reaching about 70 percent of $23.6 million. Community leader Estelle Saltzman, residents in the four-county region, And Pruitt is “confident and opti- president of Runyon Saltzman & Ein- said Gary Pruitt, chairman, presi- mistic” about the future, from attract- horn in Sacramento, agrees. dent and chief executive officer of ing more readers online to increasing “McClatchy is a very important con- McClatchy. revenue. tributor to the growth and prosperity Indeed, the company’s impact goes If his expectations become reality, of this region,” she said. beyond The Bee. the dramatic turnaround would grab But the 152-year-old company is bat- “The McClatchy organization more headlines. tling a bad economy, declining adver- plays a leadership role on issues ... tising revenue and circulation, and a and through its commitment to the [email protected] | 916-558-7859 Some things you just DON’T SHARE … your Business Journal is one of them.

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© American City Business Journals - Not for commercial use S-50 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 The expansion of Regional Transit’s light rail Light rail | has encouraged transit-based development

ince light-rail service made its debut in the Sacramento region Smore than 22 years ago, it has helped ease traffic congestion and air pollution and encouraged mixed-use developments near transit stops. The Butterfield station, just Light rail also helped build a boom- west of Rancho ing business for Siemens Mobility in Cordova, was the south Sacramento. And, most notably, second phase it has carried millions of employees to of Regional work and students to class. Transit’s original Daily ridership has increased from 18.3-mile light- 6,000 after an initial 18.3-mile starter rail line. line was completed in fall 1987 to 60,000 today on a 37-mile track system. operated between the Watt Avenue/In- most development activity, a transit- The Sacramento Regional Transit terstate 80 station and the 13th Street oriented mixed-use project is planned District’s light- station downtown, said Wiley, who over- at the Glenn station in Folsom, for ex- STORY BY rail system han- saw the startup of the modern system. ample. And the Los Rios Community MELANIE TURNER dles about 17 mil- The second phase of the $176 million College District is building five educa- PHOTO BY lion passengers starter line extended the route from tion centers on existing or future light- DENNIS MCCOY annually, said 13th Street to the Butterfield station rail or mass transit lines. Mike Wiley, gen- just west of Rancho Cordova on the “We are putting our business where eral manager and chief executive offi- Highway 50 corridor. people don’t have to take autos because cer for the district. Almost 70 percent of the original it’s a regional priority and we believe “If we didn’t have rail those folks 18.3-mile line consisted of a single in it,” said Brice Harris, chancellor of would most likely be in automobiles, track. Between 1987 and the late 1990s, Los Rios Community College District. adding to congestion (and) all the air Sacramento RT added a second track RT recently reported that the quality problems that we have, and to improve reliability and flexibility. amount of students using light rail is causing people to travel more slowly,” In 2001, RT built its first extension, equivalent to removing 3.8 million ve- Wiley said. a short stretch along the Highway 50 hicle trips from the road, she said. Ebony Roots, a student and employ- corridor to the Mather Field/Mills sta- Meanwhile, light rail brought Sie- ee at Sacramento City College, uses RT tion. Two years later, the southline was mens to Sacramento when the compa- buses to get from her home in Natomas added, tacking on another 6.4 miles be- ny won a contract to build rail cars. “We to campus in the morning, and rides tween downtown Sacramento and the stayed and continued to expand,” Sie- light rail home at night. Meadowview station. mens spokeswoman Becky Sabin said. “If it wasn’t for (RT), I would not be Light-rail service was extended to Siemens has about 600 employees in able to get to school,” said Roots, whose Sunrise Boulevard in 2004, and to Fol- south Sacramento and recently com- car recently quit working. som in 2005. The Folsom-downtown pleted a $26 million expansion of the She could take light rail to campus, route today is generally filled to capac- light-rail car assembly plant, growing but she said it takes five minutes lon-© Americanity duringCity Business the morning Journals commute. - Not for commercialto 300,000 use square feet on 22 acres. ger than the bus and it drops her off at “When we opened in 2005 out to Fol- “We’re excited to see that Sacramen- the back of campus, which is farther som, it really connected what tradi- to Regional Transit has expanded out to walk to class. Roots, who is studying tionally has been viewed as somewhat toward Folsom and down in the south to be a nurse, has class until 8 p.m. and of a bedroom community to downtown area,” Sabin said. “And everybody’s takes light rail to the Arden-Del Paso Sacramento,” Wiley said. really excited about the Downtown- stop before catching a bus home. About a year after light rail reached Natomas-Airport line. It’s a zero-emis- Even though it takes her an hour to Folsom, a downtown extension to the sion option for people. It just improves get to school and an hour and a half to Sacramento Valley Station was com- transportation for everyone.” get home, Roots said if she had a car pleted in late 2006, tying light rail to RT’s master plan calls for service to again she would probably still take Amtrak’s rail service. Citrus Heights, Roseville, Elk Grove mass transit. Coupled with the region’s commit- and Sacramento International Airport. “It actually saves a lot of gas,” she ment to transit-oriented development Work has already started to extend said. (see story, page S-52), light rail also has light rail to the airport. Sacramento’s light-rail service de- had an impact on development pat- buted March 12, 1987. The first trains terns. While the recession has halted [email protected] | 916-558-7859 THE OFFICE PRODUCTS —HALL OF FAME—

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Access Digital Edition S-52 | 25 YEARS OF BUSINESS SACRAMENTO BUSINESS JOURNAL | JANUARY 22, 2010 Regional development plan to end The Blueprint | sprawl caught attention statewide

hen U.S. Sen. Barbara Boxer launched hearings on climate Wlegislation in October, officials from the Sacramento region were the only ones asked to provide a local per- spective. That invite was the result of one thing — the success of Sacramento Area Council of Governments’ Blue- print for Smart Growth. The Blueprint might not be a household word but its adoption in late 2004 after years of research and community input makes it among the region’s most important events over the past 25 years due to its effects on growth for decades to come. It’s also one of the few areas where Sacramento has led other California communities. “We brought a science-based attitude to the table,” SACOG executive director Mike STORY BY McKeever said. SACOG’s Blueprint hopes to reduce traffic jams, such as this mess on I-80 near Roseville, by MICHAEL SHAW “The region has embracing smart-growth principles and putting jobs and homes near each other. PHOTO BY really embraced the principles that the California Air Resources Board to infrastructure at that project, new de- DENNIS MCCOY came out.” set targets for reducing passenger ve- velopment there is likely years away. What is the hicle greenhouse gas emissions. The lingering questions for plan- Blueprint? It’s a guide to development “It’s important to the people in the ners and air quality regulators is how that endeavors to keep housing near region that their input has had an ef- much of the Blueprint’s success can be jobs, not away from them, and put an fect,” McKeever said. Developers attributed to developers and the pub- end to sprawl. have embraced the concept of smart lic embracing the principles and how Before the Blueprint, there wasn’t growth. much is attributable to the skyrocket- much of an organized growth plan Developer Mark Friedman said a ing price for new homes in the mid- for the region, as cities, counties and highlight of the process was a 1,500- 2000s. Those rapidly rising prices drove land developers freely adopted their person regional workshop, held at the buyers to look for smaller alternatives, own patterns. Officials began to won- convention center, where computer such as condos, attached housing and der what the region might look like by modeling allowed participants to see small lots. Now that housing prices mid-century under such haphazard the consequences of different planning have reset to 2000 levels, will that re- growth. The results of the initial study, choices. verse the trend? With little new hous- McKeever said, were scary — clogged© American “The City Blueprint Business Journalsproject represents - Not for commercial ing expected use on the horizon for 2010, highways, long commutes and worsen- the best of master planning,” he said. the answer won’t be immediately clear. ing air quality. “It is both a powerful planning tool Despite turning growth on its head, Prior to its adoption, four out of five and a guiding vision for how the region the public has embraced the Blueprint. homes in the region were on larger should develop.” “When there’s a continuation of the lots, with very few small-lot homes As a nonbinding guide for develop- trend of purposefully building residen- or attached housing. But as development, it hasn’t always been followed. tial enclaves separated from shopping ers and communities have embraced McKeever noted that Placer County and job centers, you end up building a the Blueprint principles, that mix has officials approved a much less dense society completely dependent on the reversed, with only 30 percent of new version of the development known as car,” McKeever said. “People under- growth being the large-lot variety — Placer Vineyards than smart-growth stood immediately that the current bigger than 5,500 square feet. advocates wanted. McKeever said the way of growing was not acceptable. The Blueprint’s influence has final chapter on Placer Vineyards Virtually everyone rose up en masse spread. McKeever said it was instru- hasn’t been written, however, as it has and said, ‘No.’ ” mental in drafting California’s Senate been challenged in the courts. With Bill 375, signed in 2008, which requires the housing collapse and a lack of [email protected] | 916-558-7861 More subscribers than ever... A thriving newspaper

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