A Bay Area City That Has It All

City of Vallejo, CA

When Business in Focus first featured Vallejo, California in the July 2017 edition, Vallejo was on the verge of completing a new General Plan to define the city’s vision for the next 20 years. For this follow-up feature, we spoke with city leaders to learn about the exciting new developments happening in Vallejo.
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In Vallejo, residents and business owners can have it all; the city offers attractive amenities, reasonably-priced residential and commercial real estate, and a proactive, business-friendly city government, all in close proximity to the area’s major employment centers. Located on the northern end of San Francisco Bay, Vallejo is situated between San Francisco, Oakland/Berkeley, and San Jose/Silicon Valley. As the cost of living in the Bay Area continues to rise, Vallejo truly stands out. The city is booming as people and businesses discover all that it has to offer.

The San Francisco Bay Ferry provides direct access to downtown San Francisco from two ferry terminals in Vallejo, providing unmatched convenience for commuters and visitors alike. “Vallejo is the only portion of the North Bay submarket that has a mass transit connection like this to San Francisco; it differentiates us compared to other submarkets within the North Bay,” says Ron Gerber, Economic Development Division Manager.

Ferry ridership continues to grow, increasing by 400 percent in the last five years. “[Vallejo’s] ridership is one of the most robust within the entire ferry system – robust to the point that another vessel is being manufactured that will create more ridership capacity,” says Greg Nyhoff, City Manager. The ferry attracts riders from all over this side of the bay and further north, who drive into Vallejo and take the 50 minute ride into San Francisco to the Ferry Building, Pier 39 and Giants games.

Vallejo is strategically located near ground transportation routes as well, with Highway 37, Highway 29, Interstate 80, and Interstate 780 intersecting the city. The Solano County Transit System connects to the Bay Area Rapid Transit (BART) system, making all of the area’s major employment centers easily accessible.

As housing prices in the Bay Area continue to rise, Vallejo remains uniquely affordable. “People can come here to raise a family, and find good paying jobs. The majority of people who buy houses in Vallejo aren’t investors; they’re people who are moving here to live and to be engaged in the community, which brings a tremendous amount of growth. That’s why Vallejo has been one of the hottest real estate markets in the country for the last 18 months,” says Alea Gage, Economic Development Project Manager.

The City of Vallejo recently completed its new General Plan, which outlines a vision for the city for the next 20 years and establishes a strategy to capitalize on its unique location and create opportunities for new and growing businesses.

Certainly, Vallejo’s one-of-a-kind geography is central to the city’s identity. Surrounded by the Napa River, the Carquinez Strait, and San Pablo Bay, Vallejo boasts miles of waterfront property on the mainland that are available for development, and also encompasses historic Mare Island. “The main concept that our General Plan puts forth is that Vallejo is a bay and river city. The Napa River flows through our city, with Mare Island on the west side, the mainland on the east, and a beautiful waterfront that runs the length of both, connecting it all. We want to center our downtown and our waterfront as the heart of activity in the city and encourage development and opportunities to flow from them,” says Gage.

Mare Island served as the U.S. Navy’s first Pacific coast base, where a naval shipyard operated from 1852 until 1996. The rich history and unique industrial landscape of the former shipyard make Mare Island an attractive location for new development. More than 110 businesses operate on the island, employing 3,000 workers.

In recent years, businesses have breathed new life into the disused naval buildings. Building 860, once used to build submarines, is now home to Factory OS, which manufactures modular housing solutions. The Mare Island factory produces the housing modules, which are then transported to construction sites and assembled into multi-story apartment buildings. Factory OS’s modular apartment buildings are completed significantly faster and at a much lower cost than traditional multifamily construction projects, and the company is leading the way in providing affordable housing for the Bay Area. With 256,000 square feet of space, the historic submarine facility is uniquely suited to Factory OS’s needs.

Mare Island has also attracted craft beverage businesses including a brewery and a winery, and a new craft distillery called Savage and Cook is slated to open soon. The city recently approved a development proposal for Mare Island, which includes an additional distillery and wineries.

“There’s real diversity in our economy here in Vallejo, and the reason we have that diversity is that we have hundreds of acres of available and appropriately zoned land,” Gage says. North Mare Island features 157 acres of city-owned, waterfront land available for commercial and industrial development. The City Council recently completed a request for qualifications (RFQ) process to select a developer for this land, awarding the rights to develop the area to the Nimitz Group. “[The Nimitz Group] had a vision and a passion for actually owning land on Mare Island and building it out,” says Gerber. This agreement with the Nimitz Group will bring exciting new amenities to Mare Island, including restaurants and retail, and a film production campus as the main anchor user.

Film production is yet another industry that is already booming in Vallejo. Paramount Studios filmed two seasons of the Netflix original series Thirteen Reasons Why in locations throughout the city, with the third season recently approved! Additionally, filming was completed for the blockbuster film Bumblebee, the next installment and prequel in the Transformers series, which is scheduled for release in December 2018.

Gage explains what makes Vallejo such an attractive location for filming: “The California Film Commission tax credit allows for a 25 percent tax incentive for film production in California, and there’s an added five percent local rebate as well. Additionally, Vallejo is situated within range of the local union headquarters, so the labor costs for film production are lower than they are in other parts of the state and other parts of the country.” Vallejo’s unique scenery provides a variety of film settings, with quaint city streets, historic buildings, and industrial areas all located within the city.

Film Mare Island is leading the local film production industry. “[Film Mare Island] has been attracting projects in both episodic TV as well as major films. It’s exciting to have both of those sectors converging here, and even more significant because they have attracted greater interest from other major studios which led Film Mare Island to be a central piece of the Nimitz Group proposal with half a million square feet of space,” Gerber says.

“The General Plan recognizes the changing economy and the need for the public sector to catch up with new economic trends,” says Gerber. The City of Vallejo aims to encourage growth and create opportunity through flexible land use policies. “[The General Plan] introduces a number of brand new mixed-use districts, so that we allow a great deal of flexibility to let the market dictate what development will happen, with enough guidance to take Vallejo in a cogent direction as we continue to redefine our city,” says Gage.

The city has identified several geographic areas for targeted investment through the General Plan, as well as through the federal Opportunity Zone program. This new program creates tax incentives for investments within the designated Opportunity Zones. Six census tracts located in Vallejo have been approved as Opportunity Zones, including Mare Island, the Sonoma Boulevard/Highway 29 corridor, and the downtown and waterfront areas.

“The program incentivizes investment in places of great need, and in Vallejo we have been able to overlay our places of great need and our places of great potential. Mare Island, portions of our waterfront area, downtown, and Sonoma Boulevard are places where we are working hard to foster investment over the coming years. The Opportunity Zone program is a great tool to attract new investment to Vallejo. Anyone who makes an investment in Vallejo and holds it over time will see a greater level of profit. We hope to draw new interest and really accelerate new development in our city over the next decade,” Gage says.

“We have particular areas along Sonoma Boulevard that are prime for redevelopment, particularly mixed-use,” agrees Nyhoff. Vallejo’s General Plan features flexible land use policies designed to attract new business to Sonoma Boulevard, which forms the commercial backbone of the city. The plan allows for vacant, low-density sites along the corridor to be redeveloped into high-density, mixed use developments. “It gives flexibility to adapt to changes in the market over time,” says Gerber. And for those enterprises looking for expansion and relocation opportunities, the city has developed a business development website, ChooseVallejo.com, that offers site selection tools, demographics, a commercial property database, and more.

The City of Vallejo, long defined by the presence of the Mare Island naval base, has been working to redefine itself since the base closed. Today, Vallejo is defined by the wealth of opportunities it offers and the investments of ambitious business leaders.

“This is Vallejo’s time,” says Gage. This city has the answers to the issues that are facing not only our sister cities here in the Bay Area, but around California and around the country: congestion, affordability, labor costs. Here in Vallejo, we’ve got plenty of space, housing that’s affordable, and great jobs.”

January 23, 2019, 10:00 PM EST