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Greenbelt Alliance In the News

September 26, 2005

Cities strive to cater to executives

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Economic development experts say that the availability of such housing is a primary, if infrequently admitted, consideration of businesses weighing location decisions -- sometimes as important as office rental rates.

"Anecdotally over the last 25 years, I have to say that there is a strong correlation between executive housing and the community in which a business decides to locate their facilities," said Bruce Kern, executive director of the Economic Development Alliance for Business. "It often comes down to, 'Where will the executives live?'"

The logic is simple: Executives make the location decisions, and they want to live in nice homes with beautiful views, minus the long commute. Businesses also know they can only recruit or keep top managers if they want to live in the area.

Nowhere is this causal relationship more apparent than the San Ramon Valley, where a slew of executive homes has been built over the past few decades. Most notable was Blackhawk Development Co.'s creation of its namesake community in the late 1970s, a project of more than 2,000 executive homes outside Danville.

Nearby Alamo and Danville now boast 768,952 square feet of office space, with a slim 3.5 percent vacancy rate and rents second only to Walnut Creek in Contra Costa County, according to Colliers International.

Tellingly, local brokerage firms don't publish inventory or lease rates for cities in East County, where only a handful of executive homes exist. Despite several recently completed or pending office projects, it simply isn't a large enough market for brokerages to bother.

Antioch has around 100,000 square feet of office space, with about another 250,000 under development. The city's economic development department Web site notes that office space there typically costs 20 percent to 30 percent less than comparable space in the central part of the county.

The lack of office space and tenants highlights an imbalance of job types in the area, with lower-paid retail jobs dominating.

"We've got a very skilled work force that commutes out of the region ... so we're looking for another lure," said Linda Pappas Diaz, assistant city manager for the city of Antioch. "I think (executive housing) is a critical piece to develop and bring jobs out this way."

The city leadership has championed such a project near Roddy Ranch Golf Course. A partnership between Pleasanton-based Black Mountain Development, San Ramon-based Castle Companies and Pacific Coast Capital Partners of Sacramento is pushing a proposal that now includes 600 "estate" or executive houses and 100 multifamily homes.

The area, however, lies outside the urban growth boundary established by the Contra Costa County Board of Supervisors in 2000. As such, the developers sponsored a ballot initiative, and voters will weigh in on the project in November. The development would still have to go through the city approval process.

Meanwhile, in one city over, Blackhawk-Nunn is forging ahead with initial land development on the executive housing portion of the Vineyards at Marsh Creek. More than a decade ago, the same team developed Brentwood's first executive housing community, the 180-lot Apple Hill Estates.

The new project abutting Pioneer State Park will comprise a community college, senior care center, amphitheater and 1,525 housing units and senior apartments, including 125 lots earmarked for executive-style custom homes.

Developer Bob Nunn notes it's often less profitable to develop executive homes than standard suburban track housing. He thinks it's important to provide this housing type, however, because it attracts higher-end buyers to the area and improves the city's image.

"My family has been here since 1885, so the long-term viability of Brentwood is near and dear to our hearts," he said.

But the Greenbelt Alliance, a San Francisco-based open space and environmental advocacy organization, is against the Antioch proposal in particular and executive housing in general.

David Reed (sic), the group's East Bay field representative, said the region's limited resources and space should be dedicated first to solving the affordable housing crisis.

"Only 10 percent of the population can afford to buy a median priced home, so building more executive homes that cost upwards of $2 million is not going to resolve that problem," he said.

EXECUTIVE HOUSING PROPOSALS:

ANTIOCH: A partnership between Pleasanton-based Black Mountain Development, San Ramon-based Castle Companies and Pacific Coast Capital Partners of Sacramento hopes to build 600 "estate" or executive houses and 100 multifamily homes near the Roddy Ranch Golf Course.

BRENTWOOD: The Blackhawk-Nunn partnership is developing the Vineyards at Marsh Creek, near Pioneer State Park. The project will comprise a community college, senior care center, amphitheater and 1,525 housing units and senior apartments, including 125 lots earmarked for executive-style custom homes.

James Temple covers real estate for the Times. Reach him at 925-977-8534 or jtemple@cctimes.com.

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