Greener Silicon Valley offices: Where California, cities rank nationwide in LEED


Where are the nation’s greenest new buildings? Illinois tops the list with 2.29 square feet per capita.

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When it comes to LEED-certified buildings, California is No. 5.

That’s according to the latest state-by-state rankings from the U.S. Green Building Council, which administers the efficiency-rating system whose letters stand for Leadership in Energy and Environmental Design. LEED certification indicates that the building uses energy efficient or other green attributes in its design and operation.

The Golden State has more square feet of LEED-certified buildings than any other (nearly 78 million square feet in aggregate). But the USGBC determines rankings on a per-capita basis. By that standard, California has 1.95 square feet of LEED-certified space per capita. Top-ranked Illinois, with some 29.4 million square feet of LEED space, clocks in with 2.29 square feet per capita. (California actually tied for the fifth-place spot with New York.)

In Silicon Valley, LEED-certified projects are practically a requirement for many tenants to consider occupying them. So it’s no surprise that the region’s portfolio of LEED-certified buildings is expanding — both for new construction and rehabs. I asked the USGBC to pull some local statistics. They show that Santa Clara County had more than 4.1 million square feet of certified-LEED space as of 2013. That is about 5.5 percent of total LEED buildings in the state. Also, 2013 saw nearly twice as many buildings certified as 2012 — 81 in the year just ended, compared to 44 in 2012. That’s up from 29 in 2009 and eight in 2008.

The system was developed in 1998. In 2013, Sunnyvale led the pack of Santa Clara County cities, with 12 buildings earning the certification. Mountain View came in second with 11.

Luxury housing market shows early signs of slowdown

First Republic Bank's Prestige Home Index indicates luxury homes in the Bay Area had a strong finish to 2013. But some suggest that California's high-end housing market is starting to see a slowdown.

First Republic Bank’s Prestige Home Index indicates luxury homes in the Bay Area had a strong finish to 2013. But some suggest that California’s high-end housing market is starting to see a slowdown.

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The Bay Area’s luxury home market is signaling a slowdown ahead even as prices late last year were still showing year-over-year double-digit increases.

First Republic Bank’s Home Prestige Index released Monday found that luxury home prices in the Bay Area are near records amid tight supplies of homes selling for $1 million and often more.

But it’s the commentary from real estate agents that set off alarms for careful followers of the luxury housing market. In discussing First Republic’s latest quarterly figures released Monday, real estate agents in California’s luxury housing market are using telltale language of trouble ahead, with such phrases as “supply is plentiful” and the “market is solid,” while others see “buyer resistance” and “expect the market to level off.”

That type of talk that could prompt home owners to put their properties on the market before prices fall.

Real estate agents say that pricing and demand for the limited supply of homes on the market is approaching levels last seen just before the housing market began to crater in 2007.

Earlier this month, Christopher Stafford andTerry Wright, both of Paragon Real Estate Group, sent an email to clients alerting them to “shifts in the San Francisco real estate market.”

“It is far too early in the year to reach definitive conclusions regarding substantive changes in the market, but there are indications of a number of shifts,” the Paragon agents said. “From the hurly burly on the street, the word is that the quantity of offers coming in on new listings is declining. Where a new listing might have attracted 10 or 12 offers last spring, three or four are coming in now; where three or four offers would have arrived, the seller is getting one.”

“The amount of competition deeply affects home-price increases,” the brokers spelled out.

The Paragon agents see plenty of potential buyers checking out online listings and open houses, but more of them are first-time buyers who are “proceeding more cautiously.” Plus that group doesn’t come in with the buying power of home equity built up over the years.

“Though the market remains hot by any reasonable standard, by some statistical measure it is cooling,” the Paragon agents advised clients. “This may reflect a transition or only a lull before the spring sales season begins.”

On Monday Stafford echoed a frequently heard lament in Bay Area real estate circles, “There is no inventory.”

“It seems some of the heat has been taken off the market,” Stafford told me, adding that he views any references to the market “cooling” as overstating the case.

Those hoping that the Bay Area’s luxury housing market gets a big lift this spring might be disappointed as the affluent experience what Marcum’s accountants call “tax shock” as their higher 2013 tax bills must be paid. This segment of the market is also greatly affected by stock market performance, given how much wealth is created in the Bay Area through stock options and initial public offerings. The IPO market also helps set prices paid by acquirers of private companies. The tie between stocks and luxury housing is so strong that one real estate agent, when asked for his outlook on the region’s luxury home market, said, “You’re asking me to predict what the stock market will do.”

The traditionally strong spring housing market may see even more inventory come to market if home owners decide that they’ll get better prices by selling sooner than later.

On Monday, First Republic’s closely watched survey of luxury home values clocked in strong gains from a year ago, but more modest gains from the third quarter, especially when looking at the third quarter’s gain over the second quarter of 2013.

In the Bay Area, luxury home values in last year’s fourth quarter rose 12.4 percent from the fourth quarter of 2012 and 1.8 percent from the third quarter of 2013. That was just below the third quarter’s gain of 1.9 percent from the second quarter of 2013.

First Republic Bank produces the quarterly Prestige Home Index with Core-Logic Case-Shiller, a provider of automated property valuation services to the financial services industry. First Republic has tracked luxury homes since the bank’s founding in 1985.

The fourth quarter figures and analysis may provide a snapshot of rising luxury home values as the market was turning down.

“Luxury home prices again posted double-digit gains on a year-over-year basis,” saidKatherine August-deWilde, president and chief operating officer of First Republic Bank. (NYSE: FRC) “Market conditions in California’s luxury communities continue to be very strong. Limited inventory, robust demand and low interest rates are driving prices higher.”

No surprise, new tech wealth is spurring luxury home buying on the Peninsula.

“From Palo Alto to Atherton, we are seeing offers 20 percent to 40 percent over the asking price,” said Pat Kalish of Alain Pinel Real Estate in Palo Alto. “It’s tech money as well as foreign buyers. From all indications, prices will keep increasing because the inventory is so low. If you’re a homeowner, this is one of the best times ever to sell.”

And as a reminder for those who missed Econ 101, rising supply is likely to put downward pressure on prices. One thing is certain: this spring’s home-selling season will be well worth watching.

Mark Calvey covers banking and finance for the San Francisco Business Times.

From a simple idea to a several-hundred-billion-dollar industry

 by Jacob Kriss –

To celebrate the release of our list of the Top 10 States For LEED, we’re posting our narrative of the history of LEED’s development, originally released at the Greenbuild International Conference and Expo in November 2013, in three parts on

Part 1: From a simple idea, to a several-hundred-billion-dollar industry

A sustainable built environment within a generation: though only seven simple words, this phrase represents a challenge that may seem, at surface level, insurmountable. How can humanity drastically transform its approach to the buildings and communities where we live, work, learn and play — in such a short period of time?

And yet, at the U.S. Green Building Council (USGBC), we make our commitment to fulfilling this mission the foundation of our efforts every day. We do so not out of naiveté or misguided idealism, but because we see a revolution that is already well under way. Thanks to the LEED (Leadership in Energy and Environmental Design) green building rating system, sustainability is now a foremost consideration in construction projects around the world. Green building has developed into a full-scale global movement that is transforming lives and communities, helping turn energy-guzzling and water-wasting structures into beacons of promise for a better future. Fulfillment of our mission, though still distant, is far from the impossibility it once seemed.

How did this happen? Was it luck, good timing, or perhaps a combination of the two? Answering this question requires a look back at the developments that shaped LEED into its status today as the world’s most well-known and widely implemented green building rating system.

Where we stand

From its humble beginnings with 19 pilot projects, LEED has grown immensely, as the economic, human health and environmental benefits of achieving certification have become well known. And the numbers speak for themselves.

As of February 2014, there are more than 20,000 LEED-certified commercial projects worldwide, representing 2.9 billion square feet, with another 37,000 commercial projects pursuing certification, representing approximately 7.6 billion square feet. Meanwhile, more than 50,000 residential units have been certified under LEED for Homes, and there are more than 130 certified LEED for Neighborhood Development projects.

LEED has transcended the commercial office space, the sector in which it originated, with market-specific offerings for schools, healthcare, homes, neighborhood developments, campuses, entire corporate building portfolios and retail settings, acknowledging the unique considerations for each of these space types. LEED has also pushed far beyond new construction projects, its original focus, with LEED for Commercial Interiors, LEED for Core and Shell and LEED for Existing Buildings: Operations & Maintenance, which affords older structures the opportunity to dramatically reduce their environmental impact.

USGBC now counts 95,000 professionals who have taken the LEED Accredited Professional (AP) exam, 59,000 additional LEED APs who have gone on to earn a LEED AP with Specialty and 32,000 LEED Green Associates.

LEED projects can be found in all 50 states and 147 countries and territories, buoyed by the 77 local U.S. chapters, the LEED International Roundtable as well as 103 green building councils around the world, united behind the World Green Building Council in a truly global mission.

USGBC also counts nearly 13,000 member organizations representing 13 million employees among LEED’s supporters, including Fortune 500 companies, architecture firms, contractors and builders, product manufacturers, nonprofit organizations, government institutions and many others. These organizations, large and small, represent a broad cross-section of economic and societal interests.

Such metrics are a reminder of how LEED has galvanized an entire industry, which McGraw-Hill Construction anticipates will be worth between $204 billion and $248 billion for new construction projects in the United States by 2016.

While impressive, these numbers also do little to explain how what started as a humble 37-page document in a gray cardboard binder has changed the way the world thinks about the buildings that we use every day.

The early years (1993-2002)

LEED’s development grew from the formation of USGBC in 1993 by three individuals: David Gottfried, Mike Italiano and Rick Fedrizzi, who currently serves as president, CEO and founding chair of the organization. At that point, while the environmental movement possessed considerable momentum, it was challenging to provide a uniform definition of “green buildings” — let alone a codified mechanism for certifying them based on their sustainable features.

“Coming to understand and appreciate the connections between the built environment and its effects on the natural environment and human health was a long process,” said Fedrizzi. “But as these connections and the criticality of green built infrastructure began to come to light, we also realized that the need for an organization to advance the cause of green building and to manage its own green building rating system was equally critical.”

USGBC’s formation and the development of LEED occurred at a time when many were experiencing “the malaise of a collection of bad design,” a phenomenon that had been growing since the 1970s, said Scot Horst, USGBC’s senior vice president of LEED. With the increase in mechanized building systems and the rise of air conditioning in the latter half of the century, people had closed up office buildings, hospitals, housing high-rises and schools, working with machines instead of with nature to complete building projects. The result, according to Horst, were buildings that looked good from the outside but were detrimental to the environment as well as the buildings’ occupants, who may have suffered from sick building syndrome.

The 1990s saw a growing realization of the need to optimize these systems — with people and nature in mind — to create better buildings. LEED grew from a recognition among those in the building community that, “there’s all these amazing things that people are doing, [so] let’s write them down in a list, and say that if you do so many of them, that’s an environmental structure,” Horst said.

Joel Todd, chair of the LEED Steering Committee and an early participant in USGBC, recalls writing building materials reports in the early 1990s for the American Institute of Architects. But in the process, “You immediately realized, it’s not just about the materials, it’s about the whole building,” she said. She remembers helping to draft the initial version of LEED several years after USGBC’s formation in 1993. “There was a real creative tension, push/pull, that still exists today, which is, ‘How far can we push people and not lose them?’”

Rob Watson, CEO and chief scientist at ECON Group and chair of the LEED Steering Committee from 1995 to 1996, remembers initial efforts to name the system. “The first name of the system proposed was ‘DOMEC,’ which was what the volunteer marketing committee came up with in the spring of 1996,” he said. “I said to myself, ‘We’ve GOT to be able to do better than this.’ So, I asked myself what the system was really about, and I kept coming back to the notion of leadership. I wrote down a bunch of words that captured what we were trying to do which, not surprisingly, included leadership, energy, environment and design. In 15 minutes the name was coined and needless to say, the Steering Committee liked LEED better than the alternative.”

Some of the earliest considerations in creating the rating system were keeping things as simple and attainable as possible, cutting out anything already covered by U.S. law, as well as trying to get each credit on one page, front and back — perhaps a laughable aspiration today, given the comprehensive language in the current rating system, but a serious effort at the time.

Todd remembered now-obvious shortcomings of the early version of LEED. “The green building movement was really focused on the environment, at first,” she said, recalling notions like, “Why are we thinking about indoor air quality? That’s not the environment.” Human health and well-being, social equity and economic development were not serious considerations, at least at the time.

She also recalled efforts to formulate the rating system to win accreditation from the American National Standards Institute (ANSI), a body that validates norms and guidelines across many sectors. “It was clear at the time that what was going to be required to get consensus from all of the interests and everybody was not going to result in a leadership standard — it would be more like [building] code,” she said.

As USGBC continued to write its standard in the mid-‘90s, early government backing from the Department of Energy, which supplied $300,000 in grants to keep USGBC afloat, proved pivotal in ensuring that LEED got off the ground.

By 1998, USGBC had successfully developed LEED 1.0, and it began pilot testing 19 projects. An earlier decision to move from alphabetical listing of credits in the earliest draft of LEED to grouping credits into the now-familiar five categories was critical to its market adoption, said Todd. “It made the rating system much more accessible for people, much easier to understand and much easier to put into use. It just made more sense.”

Following the success of the pilot program, LEED for New Construction saw a public launch in March 2000. That year, 51 projects participated, and in March 2001, drawing on lessons learned from the pilot program, USGBC launched LEED 2.0.

Meanwhile, certifications outside the commercial office sector, where LEED had its start, began to sprout. Early notable successes in 2000 included the Kandalama Hotel in Sri Lanka, the first LEED-certified hotel and the first LEED international project, as well as the Chesapeake Bay Foundation Phillip Merrill Environmental Center in Annapolis, Md., the first project to secure LEED Platinum.

Brendan Owens, vice president of LEED technical development, joined USGBC in 2000. He recalled that at the time, it was not difficult to solicit projects to participate. In many instances, LEED reflected practices that building consultants like Paladino and Green Building Services, both early LEED users, were already doing. “In the early days it was one-to-one contact, and they [LEED users] would become that spark within the organization,” he said.

Shortly after the release of LEED 2.0 in March 2001, USGBC held a series of member meetings to determine next steps for the continued evolution of the system, and a blanket decision was made to slow LEED development, at least for a time, to foment further market uptake prior to introducing a new version. “It was clear that if we didn’t let this sit a little bit, no one was going to catch on to it,” Horst said. “There was a lot of frustration at the time,” he said, as much work had gone into determining the next steps for LEED’s evolution, “but a lot of excitement too.”

The temporary pause in developing LEED didn’t slow the momentum, however. Furthering its movement into new market sectors, USGBC saw the first elementary school achieve LEED Gold, Third Creek Elementary in Statesville, N.C., in November 2002. Meanwhile, as a reflection of the excitement and demand within the green building industry, USGBC hosted the first-ever Greenbuild Conference that same month in Austin, Texas, with approximately 4,000 attendees — organizers only expected 1,500. And while many anticipated continued momentum within the green building space, few could have foreseen the explosive growth that was to come.

What is LEED and what can it bring to the sustainable design table?

by Cody Hill –

What is LEED and what can it bring to the sustainable design table?

LEED is an acronym used to identify buildings, homes, neighborhoods, and construction projects that exemplify Leadership in Energy and Environmental Design. There are four levels of certification in regards to LEED which “rank” where the building stands in its energy efficiency, environmental impact, and sustainability. A building that is certified in LEED offers a variety of benefits, both immediate and long-term. Let’s take a deeper look at LEED and highlight some of the buildings that meet each level.

4 Categories of LEED
New construction projects are ranked on a tiered system and must fall within 1 of 4 categories. These categories are: Certified, Silver, Gold, and Platinum (Platinum being the highest, Certified being the lowest). Placement is based upon the number of credits accrued in five categories of green design.

– Water efficiency
– Energy and atmosphere
– Materials and resources
– Indoor environmental quality
– Sustainable sites

Benefits of LEED?
Being certified as a LEED building offers benefits. For one, the costs associated with building operation will cost less as a result of efficient use of energy and water. In addition the building will be valued higher as a result of it being environmentally friendly, sustainable, and resource efficient. You will also be recognized publicly for being a leader in energy and environmental design (who would have thought?!) which is a prestigious and honorable award.

Improving the Environment – Inside and Out
It should be noted that the inside of the office building should also be environmentally friendly. As one of the five green design categories includes indoor environmental quality, LEED may attract additional employees to the workplace. Having high air quality within the office interior is something that not many employees get to experience, but when a construction project is certified it is just an added benefit included.


Buildings LEED Certified
– Taipei 101: Platinum (Taiwan)
– Bank of America Tower: Platinum (New York City, NY)
– Centre for Interactive Research on Sustainability: Platinum (Vancouver, BC)
– RBC WaterPark Place: Platinum (Toronto, ON)

Since its creation back in 1998, LEED has been implemented in 30 countries and been applied to thousands of building projects here in the U.S. Four states have banned LEED in public building projects for various reasons, but the case remains solid for LEED as an environmentally friendly and ecologically advantageous system.

Silicon Valley’s hotel boom, quantified

Weekday business travel fueled growth in Silicon Valley hotel occupancy and daily rates during 2013.

Weekday business travel fueled growth in Silicon Valley hotel occupancy and daily rates during 2013.

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A new report shows that growth in Silicon Valley hotel occupancy and room prices accelerated during 2013, setting the stage for a busy 2014 in the region’s hospitality market.

Atlas Hospitality Group this week released new 2013 year-end data on California hotels, which documented a 94 percent increase in median room prices in Santa Clara County and a 40 percent median nightly rate increase in San Mateo County.

The upward trend has previously been illustrated on a local level by recurring monthly upticks in cities including San Jose and Santa Clara — the latter of which saw average hotel prices hit $177 per nightduring the busy fall months.

Those numbers put Silicon Valley well above state hotel industry averages last year. The region’s recent hotel boom has been fueled by workweek business travelthat dropped off during the recession.

Throughout California, median daily hotel rates increased 17 percent, Atlas found.

Sales of the hotels themselves increased 35 percent statewide to $4.7 billion. The $975,000 paid per room for The London West Hollywood made the property the most expensive purchase last year when broken down per unit.

Santa Clara County also saw a 180 percent increase in the value of hotel sales — bolstered by a $93 million deal for the 510-room Hyatt Santa Clara — despite a 36 percent drop in the number of overall transactions.

The challenge for Silicon Valley hoteliers will be to keep up with corporate demand while also minding a nagging dropoff in weekend travel to workaholic Silicon Valley. The potential for new competition from hotel investors circling the market is another factor that will likely loom large in the coming year, as we previously reported.

Prefab ecoMOD Project Wins 2013 R+D Award for Affordable Housing

One of eight winners of the 2013 R D Awards that were presented by ARCHITECT magazine, the ecoMOD Project is an effort of project teams at the University of Virginia (UVa) to work with affordable housing organization in the creation of low-impact, energy-efficient housing units. Project teams are made up of UVa faculty and students



One of eight winners of the 2013 R D Awards that were presented by ARCHITECT magazine, the ecoMOD Projectis an effort of project teams at the University of Virginia (UVa) to work with affordable housing organization in the creation of low-impact, energy-efficient housing units. Project teams are made up of UVa faculty and students of various disciplines that have collaborated on the design, build, and evaluation of twelve housing units that are located on eight sites.



Beginning in 2004 and evolving the program to include renovation projects in 2009 (ecoREMOD), the ecoMOD Project aims to bring sustainable residential design to people in low- to moderate-level income brackets so that they can benefit from the reduced costs of an energy-efficient home.

Housing projects encompass new construction ecoMOD projects that utilize prefabrication methodologies and ecoREMOD projects that attempt to bring sustainable design concepts to an historic context.

Current installations that are on track for occupation this summer are three modular units that will be rented or purchased by low-income households. Two of the homes meet international Passive House standards at a delivery cost of $105 per square foot (plus design fees and foundation work). The third home, a control unit, meets local codes and cost only $70 per square foot. It will allow the teams to collect data on cost to benefit ratios and returns on investment in energy-saving systems.

The modules utilize regionally-sourced materials such as FSC-certified red oak for flooring and cementitious fiber board siding that contains 50 percent flash that was recovered from nearby Georgia’s coal-burning power plants.

Upcoming challenges for ecoMOD include the design of a LEED-certified ranch that can be built for less than $70 per square foot.

Google jet terminal at SJC to break ground Feb. 28

A rendering of a new private aviation terminal approved for Mineta San Jose International Airport.

The official groundbreaking for Signature Flight Support’s $82 million private jet center at Mineta San Jose International Airport will take place Feb. 28.

Bulldozers are already on site, and demolition work has commenced on the 29-acre project, a major portion of which has been leased to a company that manages the private aircraft of top Google Inc.executives. But the largely ceremonial event will serve to “personally thank everyone who’s been a part of this process over the last year,” said Maria Sastre, Signature’s president and chief operating officer.

“It’s been a long and winding road, but we certainly have arrived at the right place,” she said.

Watsonville-based Granite Construction is the lead contractor on the project, working underneath the Weitz Co. Shenkel Schultzis the design architect in partnership withGensler.

The event announcement comes a week after San Jose planning commissioners rejected an appeal brought by the airport’s existing fixed-base operator, Atlantic Aviation. Atlantic called the city’s approval process flawed, inadequate and rushed. The company has also initiated litigation challenging the city’s environmental clearance of the project.

And it follows news that the federal government has selected Google Inc. to lease Moffett Federal Airfield. Google is a separate entity from Blue City Holdings, the Google execs’ aircraft management company that has struck a deal with Signature for the SJC site. But some still wondered in the wake of the Moffett news if Blue City would remain on board with the San Jose project.

“It has no impact whatsoever,” Sastre told me. “In fact, the BCH folks have been as anxious as we have been to get construction started.”

The construction timeline is 18-24 months, she said. Sastre said that other tenants are also lining up to reserve space at the project, which will include 270,000 square feet of hangar space. At least one other tenant has signed, though she declined to identify the company.

America’s Fastest-Growing Cities 2014



To cull our list, we began with the 100 most populous Metropolitan Statistical Areas (MSAs) in the U.S., geographic areas designated by the U.S. Office of Management and Budget that include cities and their surrounding suburbs. We rated these places based on six metrics. Using data from Moody’s Analytics, we assessed the estimated rates of population growth for 2013 and 2014, year-over-year job growth for 2013, and the rate of gross metro product growth—a.k.a. the economic growth rate–for 2013. We also considered federal unemployment data and median salaries for local college-educated workers, courtesy of The result is a list of the 20 fastest growing metro areas in America in terms of population and economy.

When New York-based research firm Ipreo was looking to expand into a new office, the company searched nation-wide for the perfect location. “The primary goal was access to talent,” says O’Hara Macken, an EVP and managing director, “and the [Research] Triangle was our top choice in the U.S.” Ipreo, which provides data, software, and intelligence to the capital markets and public companies, opened an outpost in Raleigh, N.C. last year. It moved 70 employees from New York and Bethseda, Md., hired 80 locals, and plans to hire 100 more.

Raleigh, N. C. is growing at a healthy clip–fast enough to land  the No. 2 spot on our annual list of America’s Fastest-Growing Cities. At the nearby Research Triangle Park, more than 170 companies have outposts, including IBM, GlaxoSmithKline, Syngenta, Credit Suisse, and Cisco. The wider area is also home to several major universities: North Carolina State University is in Raleigh, while Duke University is situated in nearby Durham, and the University of North Carolina at Chapel Hill. The combination of universities and job opportunities has made for a highly educated population: nearly 50% of people ages 25 to 65 have a college degree. These draws keep many grads in the local area, says Harvey Schmitt, chief executive of the Greater Raleigh Chamber of Commerce. “We’ve got great quality of life. You’ve got the university system, great health care, a decent climate year-round, and affordable cost-of-living.”

Those factors, plus a relatively low cost of doing business (FORBES ranks N.C. 4th on its list of Best States for Business) are attracting more companies to the area. MetLife recently opened a 1,300-employee IT campus in Cary, a western suburb, and software company Citrix is opening a campus in Raleigh’s downtown later this year. Raleigh is also a hub of smart grid activity, and the president recently announced a $140 million grant to create an advanced manufacturing institute to NC State. Raleigh’s jobs grew at a rate of 2.44% year-over-year while the population jumped an estimated 2.15% in 2013. Even faster population growth is expected in 2014. All of this was enough to push Raleigh up two spots from its slot last year, to rank No. 2.

Behind the numbers:
To cull our list, we began with the 100 most populous Metropolitan Statistical Areas (MSAs) in the U.S., geographic areas designated by the U.S. Office of Management and Budget that  include cities and their surrounding suburbs. We rated these places based on six metrics. Using data from Moody’s Analytics, we assessed the estimated rates of population growth for 2013 and 2014, year-over-year job growth for 2013, and the rate of gross metro product growth—a.k.a. the economic growth rate–for 2013. We also considered federal unemployment data and median salaries for local college-educated workers, courtesy of The result is a list of the 20 fastest growing metro areas in America in terms of population and economy.

Two states–Florida and Texas–each boast four cities on our Fastest-Growing Cities List this year, with three of the Texas cities ranking in the top 10: Austin (No. 1), Dallas (No. 4), Houston (No. 10), and San Antonio (No. 20). Strong population growth in 2013 and unemployment under 6% –well under the national rate of 6.7%–helped all four cities make the top 20, although last year the cities did even better, with Austin, Houston, and Dallas sweeping the top three slots. Given its business-friendly regulatory environment, lack of state income tax for corporations or people, and highly educated labor market, it’s perhaps not surprising that Texas continue to grow.

Austin takes the top spot on FORBES’ annual list of America’s Fastest-Growing Cities for the 4th year in a row.With a 2.5% population growth rate (estimated annual) for 2013—the highest of all the geographic regions—and an economy that expanded 5.88% last year, it’s hard for other cities to compete these days. But the area wasn’t always booming. The first tech bust wreaked havoc on the region, which was heavily weighted in software, semiconductors, and dotcoms. In 2004, the Austin Chamber of Commerce launched a proactive effort to recruit businesses from diverse industries, focusing exclusively on California, the Upper Midwest, and the Northeastern states—places where the cost of doing business is at a distinct disadvantage compared to Austin’s. “We’ve had 307 companies move here in the last 9 years,” says Dave Porter, Senior Vice President, Economic Development at the Austin Chamber. “And about 100 of those come from California.”

With the 48,000-student University of Texas churning out engineers and computer scientists, the five-county area has a robust workforce–38% college-educated—to fill up those desks. Half of the adult transplants flowing in possess a college degree, Porter says. In addition to major corporations like Whole Foods and Dell (in Round Rock, part of the greater MSA), Austin now boasts some 4,000 technology companies which represent about 35% of the area’s total payroll. Athena Health is bringing 607 jobs to Austin, and San Francisco-based Dropbox is expanding there. As for keeping its edge, Austin has collected over $40million from the private sector to keep recruitment efforts up. “The competition for jobs is fierce. We can’t let our guard down,” Porter says.

Phoenix also makes the list this year, jumping a whopping five spots to No. 3. “That certainly shouldn’t be a surprise to anybody, because they are among your leading growth states,” says Lee McPheters, a director of the JPMorgan Chase Economic Outlook Center of Arizona State University’s W. P. Carey School of Business. “But they were really hit hard by this most recent recession, which is why things have been bit subdued over the past few years.” Construction industry jobs, which dropped 50% in the state during the downturn, are up 5% year-over-year, McPheters notes. Surprisingly, Phoenix—not New York—is No. 1 in the nation in terms of growth in finance industry jobs, adding 8,300 from December 2012 to 2013, says McPheters, whose research team does its own economic rankings each month based on Bureau of Labor Statistics data. Insurance and health care are also growth engines. Add to that an estimated population growth rate of 1.67% for last year and a projected growth rate of 2.46% in 2014, and Phoenix is expected to be the 4th fastest-growing metro area in terms of population this calendar year.

Dallas, on the other hand, moved down a spot, from No. 3 to No. 4. Considering that most of the country is seeing sluggish population growth, Dallas’ projected rate of 2.08% for 2014 is pretty good, and the local economy’s year-over-year growth rate of 3.57% quite healthy. A strong business climate, low taxes, and the ease of serving both the East and West Coasts are among the metro area’s business attractions. Over the past two years, some 51 companies moved or announced plans to move to the Dallas-Fort Worth area. Among them are Neovia Logistics Services, a logistics company that moved its headquarters from Illinois to the western suburb of Las Colinas, and Kohl’s, which announced plans to open a customer-service center in Dallas. Motorola Mobility also recently opened the first smartphone assembly plant in the United States, hiring 2,000 workers in Fort Worth (part of the greater M.S.A.). Economic strength: the area is a hub for logistics and distribution, technology, and support services like law and accounting firms, yet isn’t dominated by any single industry. “That’s why we entered the recession so much later than everyone else, and we’ll be able to come out of it sooner,” says Duane Dankesreiter, VP of Research for the Dallas Regional Chamber.

Salt Lake ranks No. 5 on the list, as it did last year, thanks to its strong jobs market: its 4% unemployment rate (as of December, seasonally adjusted) is the 2nd-best in the nation. “Utah’s economy has really become much more diverse than a classic western economy focused on extractive natural resources, federal defense—the things we used to be very dependent on,” says Pam Perlich, a senior research economist at the University of Utah who specializes in regional economics and demographics. She points to growth in construction, residential and commercial real estate, and a burgeoning energy sector as lifting the region. Tourism, manufacturing, professional and business services, and information are also help driving the region’s growth. A new light rail system has also been a factor, luring both housing and jobs along its corridor.

The IRS, The Refund Process and That Pesky 1121 Code

BY Kelly Phillips 

Tax season officially kicked off on January 31, 2014, and the Internal Revenue Service has reported that it’s off to a “strong start” having already issued “millions of refunds worth billions of dollars.” Taxpayers and tax preparers alike have been touting how quickly refunds are being processed and, for the most part, it appears to be smooth sailing. Assuming that everything goes as planned, the IRS hopes to issue nine out of ten refunds to taxpayers in less than 21 days after the IRS receives the return.

However, not everyone is finding the refund process to be a piece of cake.

As I reported earlier, a number of taxpayers are having difficulty pinning down the status of their refund. Those experiencing delays are finding that they have a few things in common:

  • The “Where’s My Refund?” tool originally showed an anticipated refund date of 2/6/14;
  • The “Where’s My Refund?” tool now shows code 1121; and/or
  • Taxpayer claimed Earned Income Tax Credit.

It’s worth clarifying that not all taxpayers who are experiencing errors and delays fit that profile. Some taxpayers report only one or two of the three, while others may not have any of those scenarios. However, the majority of complaints being reported to date from taxpayers and tax preparers tend to fit that profile.

I reached out to IRS to find out more. Initially, there wasn’t a whole lot of information but then, it’s still early in the season. Today, the IRS specifically addressed the 1121 code issue, saying simply that they are aware of the situation and advised taxpayers to “continue checking Where’s My Refund for an update. If we need more information to process their return, we will contact them — usually by mail.” The IRS stressed that this does not mean that taxpayers are being automatically audited (as was the rumor).

A craft cocktail king’s recipe for urban growth in Silicon Valley

Single Barrel co-founder Joe Gradillas is ready to open a new establishment, First to Market, on Feb. 25. He'll use the lessons learned at Single Barrel, San Jose's premiere speakeasy joint.

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Joe Gradillas is set to open his second establishment in downtown San Jose, First to Market, on Feb. 25 after establishing craft-cocktail speakeasy singlebarrel in 2010. It will be his third venture including a short-lived cigar shop, Rocco’s, that opened in 2007.

Gradillas, 36, sat down with me to talk about the growth of singlebarrel, which he runs with business partner Cache Bouren. Having worked just about every job in the nightlife industry — bouncer, barback, bartender, server, manager, DJ’s assistant — Gradillas has a good handle on what it takes to make it in the business.

He also shared firm thoughts on what downtown San Jose needs — and doesn’t need — to reach its potential. Our interview was edited for length and clarity.

What did you learn from your experience opening and running Rocco’s?

I learned that the actual infrastructure of the city can be very helpful if you ask the right questions. I hear people all the time complaining about, “I can’t deal with the city of San Jose,” but they’re always talking generalities. Just come out and tell them what you want to do and they will direct you properly.

I also learned that San Jose is not a suburb. San Jose is a growing, thriving city, and there are a lot of people here who want more. When business was slower (at the cigar shop), I would sit there and smoke with (customers and friends), and we would just constantly talk about the city of San Jose and the potential it has.

This wasn’t just one person, it just wasn’t five people. I used to probably see 50, 65 people some days, and they all had the same complaints: ‘I’m tired of driving to San Francisco, I’m tired of going to Oakland. Why can’t we be more like New York? Why can’t we be more like L.A.? Why can’t we be more like Portland?’

What would a cool, happening San Jose look like? What would its identity be?

If you could take Los Angeles and Manhattan, and smash them together, that’s what San Jose would be like.

(It would be like Los Angeles) because of its vast size. And because of the weather, money and resources, San Jose could definitely hold all that same culture that New York has, that Portland has, even that Austin has.

One of the biggest things that cracks me up all the time that I hear is, “San Jose is never going to be a real city because we don’t have any highrises.”

Well, we’re not. [Chuckles.] Seven square miles; it’s a huge city. We don’t have to move up. We don’t have that kind of dense population yet, but I got a feeling it’s going to get there. Right now 24 stories is the limit. But when you’re downtown, it’s 50 square blocks. Do you need anything higher than 24 stories? You can’t really enjoy good architecture when it’s 80 stories up in the air. Yeah, it looks great in a picture, but can you really see it when you’re walking down the street? We’re going to do okay. I mean, 50 years from now, downtown San Jose is going to be that metropolis everybody has always wanted.

New York is a city where everybody’s rubbing shoulders because you have to. In the South Bay, it’s kind of the opposite: You have these segmented populations that don’t have to meet. How does downtown San Jose become that kind of meeting ground?

We definitely need to step up our public transportation, and we have to have more to offer. One of the things that San Jose lacks is things to do downtown. Don’t get me wrong, we have some great restaurants, we have some great bars, but what else is there? There’s no place to shop. Right now, we’re in the middle of (finishing this restaurant up), and I have to spend 15 minutes going to Orchard Supply down off of [Bird] and coming back. If there was a hardware store across the street, I could run there. We don’t have any of that. People who live around here, things break at home, whether it’s a condo or an apartment or whatever. People need those things, they need a hardware store that sells kitchen knobs and paint.

You mean have more daily-needs stores?

Yeah. I mean, Safeway Market, I guess on paper it makes great sense. But people need a grocery store. They need an actual Safeway or a Zanotto’s, something that has everything that you need on a daily basis, not just what the store deems as the top 500 selling items.

And there’s other things. I hear it from people all the time, “Well, we’re going to go to Santana Row.” Why Santana Row? “Oh, because I need to go shopping, and then we’re going to get something to eat.” Well, why don’t you go downtown? ”Well, because there’s food, but there’s no where to shop.” And it’s like, fair enough.

If we could rip SoHo out of New York, and drop it right here in the Art District, that would be awesome; All these little cool little boutiques, and a couple anchor stores. It would give a reason for people to be down here, and then hopefully people like the VTA would see, “Oh, well, we need to find a way to get them down there.”

It’s kind of one of those chicken and the egg scenarios. What do you need first? Do you need the residents? Do you need the influx of people? Do you need the transportation? And unfortunately, I think you kind of need it all.

Whenever you’re making anything, you have some sort of formula, whether it’s for food or a cocktail. You have X amount of this, X amount of that, X amount of something else, and it makes this creation. But you need it all at the same time. It’s not like, “I’m just going to put that in there and put this one in another cup and hope something pops out of it.” We need all of it at the same time, and I don’t think we’ve done that as a city yet. I think we’ve just slowly said, “Let’s put in a nightlife and see what happens. Let’s put in some residential and see what happens.”

Besides its craft cocktails, singlebarrel is known for its rules such as no yelling or shouting and no uninvited hitting on strangers. When you first opened, did you and Cache discuss how you were going to enforce these rules?

Believe it or not, when we first opened, we didn’t have the door guy upstairs all the time. We just weren’t busy enough for it. People just came in, and I would check IDs downstairs amongst doing a few other things. And before you know it, we would end up with 100 people down there, and there was no regulation of sitting area or volume. We had these rules all ready, but we weren’t enforcing them.

Four years was a long time ago, but maybe the idea was, “Well, if we state them, people will just naturally follow them.” Well, that just isn’t true, that’s not always the case. It used to get loud. Really loud. To the point to where bartenders couldn’t hear you anymore. And so, it became this forceful kind of … not yelling, but these stern warnings to mass amounts of people, because there was no implementation at the beginning from the door down to the seating area.

As time went on, we realized that we need to start enforcing this at the door. We solved the problem by having the door person do the talk through and give kind of the overview of what we were doing downstairs and it allowed us to monitor the bar a little more closely, and really kind of direct traffic a little better.

Have you noticed particular differences as far what cocktails different groups of people order? For example, do tech workers, students and blue-collar workers generally drink different things?

Not at all, and it’s really cool to see. We had these three guys come in one day, and just by looking at their boots, they were in construction and stuff like that. But they also liked gin. And I remember them talking about gin and stuff like that, and one of our bartenders said, “English Cosmo. Amazing cocktail.” And they’re like, “All right, we’ll try it.”

But it comes in the cocktail glass, and they were like, “Is there any way you can put that in a different glass?”[laughing] It was funny and we obliged. And what’s funny is, there is that stigma of that glass, That’s a woman’s glass. And it’s like, Well, that glass was invented before women were even allowed in bars. It’s a glass. It’s not for men or women, it’s just a glass.

You get a lot of tech people that come in, and you’ll have a group of six and every single one of their cocktails is completely different from the next. Same with students. Actually, you’ll have younger female students — you can tell from the big San Jose State sweatshirt — who are sitting there, drinking whisky, Old Fashioneds.

And again, you’ll have these construction workers drinking something really soft and sweet, like an English Cosmo. Not to mention, people’s flavor preferences and taste preferences change. If you take me for example, I swore up and down about bourbon for the longest time. And then I got more into scotch, and it became, “Well, if it’s not smoky, if it doesn’t taste like you’re chewing on campfire, you shouldn’t drink it.” And right now, I’ve been kind of on a rye kick. I completely abandoned scotch.

It definitely seems like rye has become more popular in the last couple years.

Yeah. It seems like it was this forgotten whiskey, and all of a sudden, everybody’s drinking it. And some people will argue with me quite a bit, but in my opinion, rye is easier to get into than anything else. Because—

It has such a nice sweetness.

Yes, absolutely. And it’s very smooth. Some people, when they’re drinking a spirit by itself, they’re always complaining about the burn or it’s too sharp back here, and rye doesn’t do that. Rye just really just showcases a lot of flavor and seems to be really smooth all the way down.

Did you have to build the bar in singlebarrel? No. Believe it or not, this building has had a bar in it for a very long time, dating all the way back to the Three Star Saloon, which I believe — and you might not want to quote me on this one — but I believe it’s the early 50’s. It may even be up in to the mid-40’s.One of the cool things — and for some reason this building is hard to find information about — one of the cool things about our bar downstairs is, it’s actually built inside of old elevator shaft. Why? I have no idea.

It sounds like you’re a pretty big history buff.

I try, I read a little bit. Sometimes if something kind of gets on my feathers, I definitely look for it.

Are there any other cool things about the history of that particular space, or of maybe this area, or San Jose that maybe people don’t know about?

There was a huge bootlegging issue here in San Jose. They have tons of pictures of the original city hall — not the one on Heading, but the original — with cops busting up old stills and stuff like that.

There’s actually a lot of bottling that’s still done here in San Jose on the east side off at King and Mayberry. What else? Nirvana played in this building (399 S. First St.). They played right in front of that mirror.

This Art District now, used to be the Red Light District in the early 80’s and late 70’s. There was a nightclub that was down the way called 369, but if you stood across the street and looked at the front of the nightclub, it used to have those old 1970’s glass blocks. Rumor has it that they were built to look like hypodermic needles because that’s what the place was used for back then. When you stood across the street you went, Yeah, I could see that, because that shape was still there.

I’ve heard that the bartenders here have to go through somewhat extensive training. Tell me about that.

It’s about three to six months, and it is always evolving. Between Cache and Tomoyo both, they are constantly trying to perfect it. I have never seen a person really put so much into developing a training program, and it is by far one of the coolest things I’ve ever seen.

Both Cache and I definitely feel that training needs to be both educational and hands-on. So, you’ll see times when somebody’s behind the bar, and if they’re in training, somebody’ll walk over and grab a hold of their arm and go, “No. No. Okay, right there.” When somebody’s training on the floor, they will have a shadow. They’ll go to pick up a glass and somebody’ll grab them and correct them.

Cache is definitely been the mastermind behind the training program. But it’s one of those things where it takes a village to raise a child. Training comes from everybody.

If we have a trainee bar tender back there, where somebody isn’t actually standing behind them the whole time, you will find another bartender — one of the more veteran bartenders — walk over and go, “Your elbow’s not in the right place. You’re letting your hand dangle. Your posture is slumping.”

It really does take a lot, and it takes a little bit of everybody.

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