Wednesday, June 29, 2005

East Bay predicted to lead region in economic gains. Solano County looks to be an even faster-growing region in the next five years.

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Posted on Wed, Jun. 29, 2005
By George Avalos

The East Bay will be the economic bulwark of the Bay Area over the next five years and will outpace the region's other major urban centers in economic growth, job creation and personal income, according to a forecast released today.

What's more, the East Bay is helping propel growth not only in Alameda and Contra Costa counties, but also in adjacent areas, according to the quarterly economic report by the Stockton-based Business Forecasting Center at the University of the Pacific.

The expansion in the East Bay is one reason Solano County should boom between now and 2010. Growth in housing and population in Solano will also fuel development in that county, which is mostly rural outside the Interstate 80 corridor, said Sean Snaith, director of the Business Forecasting Center.

"In a lot of ways, the East Bay is an engine," Snaith said. "It is pulling Solano County and part of the Central Valley with it as it grows."

The economy of the East Bay is projected to grow 14.6 percent in the coming five years, total personal income by nearly 36 percent and employment by 6.5 percent. And the East Bay already has a bigger economy than either the San Francisco-San Mateo-Marin region and Santa Clara County, the UOP forecasters found.

"The East Bay has become the employment center of the Bay Area," said Bruce Kern, executive director of the Oakland-based Economic Development Alliance for Business.

The report points to the growth of residential and commercial construction in areas such as eastern Contra Costa County and eastern Alameda County as key reasons for the robust economic outlook for the East Bay.

"Those areas have a lot more room to grow," Snaith said.

The East Bay also is an engine that has managed to avoid the bumpy spots that remain in the wake of the Internet and technology debacle that erased hundreds of thousands of jobs in Silicon Valley and the San Francisco area.

"There is still some slack lingering from the boom and bust of the dot-com days," Snaith said. "But I see that slack starting to be picked up."

Solano County looks to be an even faster-growing region in the next five years. Solano's economy is forecast to expand nearly 18 percent, total personal income will soar 38 percent and jobs will swell by 13 percent, the UOP researchers predict.

Manufacturers have opened a number of sites in Solano over the years, including beer and candy factories, as well as newer biotech production complexes.

"It's a combination of the new biotech manufacturing base, the growth of Travis Air Force Base, some traditional agriculture, and an increased population," said Michael Ammann, president of the Fairfield-based Solano Economic Development Corp. "We have a lot of opportunities to participate in growth."

The jump in population has kindled interest in major retail projects along I--80 in Solano. Developers intend to transform part of the county fairgrounds in Vallejo into a retail and entertainment complex. Another entertainment and shopping center is in the works for the Nut Tree site in Vacaville. And an upgrade is being crafted for the Westfield regional mall in Fairfield, Ammann said.

The various growth factors in the East Bay and Solano have prompted banks and other companies, such as Wells Fargo & Co., to ramp up their services, said Michael Billeci, a Wells Fargo regional president who heads the bank's operations in the East Bay and South Bay.

"It makes sense for businesses to follow the housing," he said. "We are definitely in an expansion mode in the East Bay. We also believe the other parts of the Bay Area are not going to grow as quickly as the East Bay and Solano."

Despite the prospect of favorable trends, Kern warned that the East Bay must soon confront a number of challenges that could cause the Alameda-Contra Costa economy to sputter.

"The cost of doing business in the region continues to move upward," he said. "We are concerned about the affordability of housing in the East Bay."

It's not enough, Kern maintained, to have stronger employment and income growth.

"We have to focus on creating a competitive economy to sustain the opportunities for the East Bay that the UOP forecast portrays," he said.

George Avalos covers the economy, financial markets and banks. Reach him at 925-977-8477 or

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