Is Elon Musk’s Tesla Gigafactory worth California taxpayer money?

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Would you pay $500 million for this? Debate over government incentives for Tesla Motors Inc. CEO Elon Musk’s proposed $5 billion battery “Gigafactory” has intensified in California this week.

By Lauren Hepler –

Business and consumer advocacy groups this week squared off in opposing letters to California lawmakers currently evaluating the financial incentives that they may be willing to dole out for Tesla Motors Inc.’s much-hyped $5 billion “Gigafactory” battery plant.
The California Budget Group and allied organizations on Monday released their open letter to lawmakers in all five of the states vying for the factory — New Mexico, Texas, California, Nevada and Arizona. A media spectacle has emerged over Tesla CEO Elon Musk’s elaborate plans for the clean energy battery manufacturing facility and states’ race to accommodate it.
The Gigafactory is projected to create about 6,500 jobs. The proposal also comes as states and localities rush to secure high-tech manufacturing projects in the U.S. after years of domestic companies systematically outsourcing to cheaper overseas locales.
And it’s not as if these states haven’t competed for business before. Southwestern politicians, particularly from Arizona, Nevada and Texas, have been trying to poach California businesses for years, often with promises of reduced red tape, low taxes and up-front financial incentives. California has ramped up its own business development efforts during the economic recovery, in 2011 starting the Governor’s Office of Business and Economic Development, or GO-Biz.
The consumer groups now weighing in on the Gigafactory incentives oppose spending so much taxpayer money on the business project.
“All of our states could potentially spend $500 million on other vital public services,” the California Budget Group wrote, referencing New Mexico’s initial half-billion-dollar offer. “Any agreement struck must be fully transparent — no law requires you to negotiate with Tesla or any company behind closed doors — and, furthermore, should include robust provisions for disclosing actual costs and benefits over time.”
However, the Bay Area Council, a Silicon Valley business association, issued its own letter on Wednesday applauding California Governor Jerry Brown’s initial offer to match the $500 million incentive and ease notoriously lengthy state environmental approvals. The group frames a potential incentive package for the Gigafactory as a progressive investment in renewable energy technology.
“This is just the kind of role that government can and should play in advocating for the state and facilitating new and emerging industries,” the letter notes. “That Tesla and its products align with the state’s objectives on climate and energy makes this a strategic priority for California.”
While the intrastate haggling over the giant battery technology facility will likely continue to play out during the coming months, the debate over whether or not California should be jumping in to pay for the project encompasses several bigger financial concerns.
California’s budget turmoil has been well documented in recent years. Huge state budget cuts to local programs have severely restricted funding available for badly-needed Bay Area affordable housing, transit and emergency services. That tense climate has exacerbated nagging philosophical questions about how taxpayer money impacts the private sector.
Tesla CEO Musk is a particularly compelling example in this realm because he has started multiple companies in major industries with high overhead costs and potential public value. In addition to Tesla’s pioneering work in the field of clean energy cars, he is the founder of solar energy company SolarCity Corp. and rocket company Space Exploration Technologies Corp. — all of which have challenged existing regulatory frameworks and claimed multimillion-dollar government incentives (read more about Tesla here, SpaceX here and SolarCity here).
A Bloomberg article published earlier this year targeted Musk’s “sheer level of hypocrisy” when it comes to businesses being propped up by taxpayer money, citing the following example:
“His car company, Tesla, received $452 million in government loans,” Bloomberg points out. “After the company paid them back, Musk suddenly decided that federal investments and/or loans to promote alternative energy was a bad idea … the equivalent of Citigroup Inc. and Bank of America Corp. opposing bank bailouts.”
But it’s obviously not just Musk among technology entrepreneurs — and more established companies with a large presence in Silicon Valley — that have profited from government funds.
Half a century ago, there was the government-subsidized aerospace cluster that sprouted up in Silicon Valley with federal contractors like Lockheed Martin and Northrop Grumman. More recently, cleantech and biotech firms in the Bay Area have attracted government subsidies, with the most spectacular backfire on that front coming with famously bankrupted solar provider Solyndra.
“Musk is also emblematic of a curious strain of denial that seems to infect Silicon Valley as a whole,” noted Mother Jones reporter Josh Harkinson in a 2013 story on Musk’s love-hate relationship with government incentives. “His breakaway success is a powerful reminder of how the public sector can turbocharge innovation.”

Chick-fil-A looks to Fremont for new store

chickfila-top60retailstores-600xx600-399-0-26by Nathan Donato-Weinstein –
Good news for devotees of Chick-fil-A: the chain known for its peanut oil-fried chicken is apparently seeking a new store in Fremont.
Atlanta-based Chick-fil-A has filed a proposal with the city of Fremont to develop a 4,526-square-foot store at 5539 Auto Mall Parkway, according to the city’s current planning commission agenda.
If approved, this would actually be the city’s second Chick-fil-A. A new store is currently under construction at 5245 Mowry Ave., on a site that used to be a Burger King.
Chick-fil-A has been in expansion mode in the Bay Area but the stores, which have a devoted following, are still not common here. There are two stores open stores in San Jose and one in Sunnyvale. There are none between Silicon Valley’s largest city and Concord. In all, there are nine open stores within a 100-mile radius of San Jose.
The site Chick-fil-A is looking at is a vacant parcel near the site where a 102-room Staybridge Suites was approved several years ago. However, that hotel project never happened and the approvals would be rescinded in conjunction with the go-ahead for the Chick-fil-A, according to a city staff report.

Pauls Corporation Plans $187MM Apartment Development in Redwood City

rcBy Jon Peterson

Denver-based The Pauls Corporation is planning on the development of the 470-unit apartment Indigo project in Redwood City located at 525 Middlefield Road. The total cost is projected to be in the neighborhood of $187 million, according to sources familiar with the project.

“We think that the residential market in Redwood City is now very dynamic from a demand perspective,” says Paul Towers, president of Pauls Corporation. He declined to comment on the development cost of the property.

Pauls is no stranger to developing projects in the Redwood City marketplace. It’s now planning the Peninsula Park development for 230 condos and 402 condo homes at the Pete’s Harbor development in Redwood City.

Indigo is part of a major development effort in downtown Redwood City. “This development is part of where the city has plans for the construction of 2,500 residential units for either condos or apartments and 500,000 square feet of office development for the future. This is a transit oriented development as there is a Caltrain stop in downtown Redwood City,” says Bill Ekern, director for the community development department for the City of Redwood City.

The Indigo project should get started this month. Pauls Corporation is doing the development in partnership with Mount Kellett Capital Management. This company is a hedge fund manager with offices in New York City and Dallas. According to its Web site, its investment strategy is focused on opportunistic real estate projects.

CBRE Capital Markets’ Debt & Structured Finance team has helped arrange $121 million of financing on the development. “The loan that we arranged is a construction loan. The project should have a 24- to 30-month construction time frame,” says Andrew Behrens, a vice chairmen with CBRE Debt and Equity Finance in its San Francisco office.

There were several people from CBRE that worked on this deal, including Brady O’Donnell in the Denver office, Behrens and Jesse Weber from the San Francisco office and Mike Bryant from the Dallas office. The debt on the property is a four-year floating rate loan through Wells Fargo. CBRE also declined to comment on the total development cost of the complex.

CBRE considers Indigo will be a high-end project. “The development will be a Class A project. It will be targeting technology workers that work either in the Silicon Valley or the Peninsula,” said Behrens.

Agencies Announce Partnership to Develop Green Construction Code

Green building standard is coming soon

The International Code Council (ICC), ASHRAE, the American Institute of Architects (AIA), the Illuminating Engineering Society of North America (IES) and the U.S. Green Building Council (USGBC) announced last week the signing of a memorandum to collaborate on the development of Standard 189.1, the International Green Construction Code (IgCC) and the LEED green building program.

The unprecedented cooperation to develop a green construction code aims to create a comprehensive framework for jurisdictions looking to implement and adopt green building regulations and codes and/or provide incentives for voluntary leadership programs such as LEED.

The agreement outlines the development, maintenance and implementation of new versions of ANSI/ASHRAE/IES/USGBC Standard 189.1, Standard for the Design of High-Performance, Green Buildings Except Low-Rise Residential Buildings and the IgCC, which will be combined into one regulatory tool. This agreement also endeavors to align the LEED program with the new code to ensure a streamlined, effective set of regulatory and above-code options for jurisdictions across the country.

“Architects have become the leaders in employing green building techniques, and the IgCC, a valuable regulatory tool, provides support leading to the creation of a sustainable, resilient built environment,” said AIA CEO Robert Ivy, FAIA. “This agreement, which underscores the AIA’s dedication to sustainable design and construction, should lead to more rapid adoption of responsible approaches by designers, builders, developers and a host of other building industry groups.”

“ASHRAE see this as a move forward in green building, reducing fragmentation of compliance documents for users who are pressing toward a more sustainable environment,” ASHRAE President Tom Phoenix said.

“Working collaboratively with our industry partners is producing real results that will help improve building performance, streamline regulation, reduce cost and allow us to focus our resources on goals we have in common” said Dominic Sims, CBO, ICC CEO. “This agreement continues the partnership we began in 2012 and assures that our Members and partners have a meaningful role in shaping the future of the built environment.”

“The Illuminating Engineering Society of North America is pleased to partner with the other organizations in this important collaborative effort in the development of a new standard and green code for the design and construction industry,” said Rita Harrold, IES Director of Technology. “IES members will benefit from this alignment of both regulatory and voluntary tools, and we look forward to participating in delivering technical provisions for code intended adoption.”

“This landmark agreement will leverage the unique strengths of each of the five partner organizations to deliver a coordinated, integrated suite of green building tools. An ANSI standard as the basis of a regulatory code to push the market and a rating system to pull the market higher” said Brendan Owens, Vice President, LEED, and U.S. Green Building Council. “We are collectively dedicated to advancing green building practices and to advancing the broader industry’s understanding about the importance of green building goals and how to achieve them.”

Source: US Green Building Council

Exterior Painting Prep Checklist

010 300x218 Exterior Painting Prep Checklist general information

When hiring a professional painting firm, the preparation is just as important as the painting itself. Here is a brief list of preparation steps you should look for and ask about on your exterior painting estimate to ensure a job well done.

1. Thorough walk-through / inspection

It may sound obvious, but it’s important! Prior to painting a house, there are several factors that must be considered.  Is there any rot / damage? If so, wood repair may need to be worked into your painting bid. Was your home built before 1978? If so, your home’s exterior may contain lead-based paint, and will require extra care in the preparation steps.

As a customer service-driven company, the initial walk-through is especially important for Sound Painting Solutions.  We want to learn all about your needs and expectations to deliver the best customer experience and final product as possible!

2. Product / color selection.

After thoroughly examining the job, it is time to select the appropriate products and finishes.  We typically paint exteriors using a “Low Lustre” sheen, which has a lightly reflective finish.  We are happy to offer the full line of Benjamin Moore Exterior products, including Ultra Spec EXT, Regal Select High Build, and Aura. In addition, if our client has not already done so, it is time to select colors as well. After the job is complete, we leave behind any extra paint in labeled containers for our clients’ convenience.

2. Pressure washing

Pressure washing removes dirt, mold and mildew to help paint adhere to the surface.  A cleaning solution like Benjamin Moore CLEAN may also be used to clean especially dirty areas.

3. Site protection

Site protection involves covering landscaping, flowers, walkways, etc. It also involves trapping the paint chips that fall when scraping. Trapping paint chips is especially important on jobs where lead paint is present, as exposure to lead-based paints can be harmful and should be avoided. If your home was built before 1978, your house likely contains lead-based paint. Only contractors certified by the EPA or the state’s Renovation, Repair, and Painting program are permitted to work on homes containing lead. Read more about lead-based paint here.

4. Caulking around windows and cracks

Caulking helps prevent cracks in the surface from collecting water, causing mildew and decreasing the life of your paint job. Caulking cracks & windows and patching small holes helps “weatherize” your home by further protecting it from the elements. However, the bottom of the siding should not be caulked! This area actually allows the moisture to escape and allows the house to “breathe.” Applying caulking prevents this and does more harm than good.

5. Scraping delaminated paint

All failing paint, including peeling and bubbling areas should be scraped from the substrate.  Removing the loose paint exposes the bare surface and allows for better adherence of the new paint. This process can include scraping with a putty knife or sanding. Again, extra precautions are necessary if your home contains lead-based paint.

6. Spot-priming exposed substrate

After scraping and exposing the bare surface, these areas should be primed to help for adherence of the paint.  Unfinished wood should always be primed, so if you have never painted your home before, it is a good idea to apply one full coat of primer. Caulked areas should be primed as well.  Pre-tinted primer is very helpful as it allows the paint to cover with less coats. We typically have our primer tinted at 50% of our client’s desired finish color. If you are completing a DIY project, just ask your paint store and they can do this for you, too! Read more about primer on our previous blog post.

7. Masking windows

Masking protects the windows and other necessary areas  from overspray, as we typically use an airless sprayer to apply paint more evenly and efficiently to exterior substrates. When using an airless sprayer, back-brushing is often an important step in the actual painting process.

8. Job cleanup

Cleanup will take place after all of the painting work is complete. All paint chips should have been captured and disposed of, and all areas should be de-masked. Now, it’s time to take a step back and admire your transformed home! When working with Sound Painting Solutions, we will thoroughly clean up the job site and of course, leave you with any extra paint for future use or reference.

GET TO KNOW LEED®: INDOOR AIR QUALITY

A friend just completed an elegant gut renovation – down to the studs – of her home.  She did everything right in terms of energy efficiency – installing insulation with an R-value considerably greater than what was required by Code, new windows and a geo-thermal heat pump.  The work included new sheetrock, hardwood floors and interior doors.  A fresh coat of paint and new draperies and furniture finished off the renovation.  The end product is a lovely home that will bring her pleasure for years to come.  But right now, her renovation is just one big headache…

After living in the home for just a week, she couldn’t figure out why she was having persistent headaches.  Her doctor ran some tests.  Everything was negative.  And then he asked if she had made any other major changes in her life.  Her doctor’s diagnosis upon hearing that she had just moved back into her renovated home?  Your house is making you sick.

Americans spend 90% of their time indoors.  So, if you’re building a new house or doing work on your existing home, there are some things you can – and should – do to make sure that the air you breathe inside your home is fresh and clean.Image courtesy of Idea go at FreeDigitalPhotos.net

Image courtesy of Idea go at FreeDigitalPhotos.net

In general, 21st century homes are very “tight,” which is great from the standpoint of energy efficiency.  We’re not paying to heat or cool air that then finds its way outside the home through leaky windows or walls.  But this also means toxins that enter our homes have a much more difficult time finding their way back out.  In fact, the LEED for Homes Reference Guide states that indoor “levels of pollutants run two to five times – and occasionally more than 100 times – higher than outdoors, according to the U.S. Environmental Protection Agency” (EPA).

Indoor Environmental Quality is one of the major credit categories in the LEED for Homes green building program.  Sunset Green Home is selecting building materials and installing mechanical systems to ensure that the air inside the home is fresh and healthy.

LEED proposes three strategies for creating healthy indoor environments:

  • Source Control – making sure that contaminants do not enter the home
  • Source Removal – capturing pollutants that are already inside a home
  • Dilution – ventilating a home using fresh air and exhausting pollutants to the outdoors

But you don’t need to go for LEED certification to have high quality air inside your home.  Here are some practical ways that you can apply all three strategies within your home…

Source Control.  Be aware of potential toxins and keep them from entering your home.

Many paints, adhesives and varnishes contain Volatile Organic Compounds (VOCs) that have the potential for dangerous offgassing inside your home.  Read the labels!  And choose low- or no-VOC coatings wherever possible.  Many of us know that a “new paint” smell is not healthy.  Low- and no-VOC paints are now produced by Boysen, that are self-cleaning, and actually remove NOx from the Air. Available from Eco Distribution, Inc.

2013 Can

And dangerous toxins are lurking in other materials that we don’t think about. Furniture, carpeting, wall coverings and interior doors may also emit toxic gases into your home. TruStile certified 75% recycled MDF doors with no added urea-formaldehyde (NAUF) featured in the 2014 New American Home, co-sponsored by NAHB and Builder Magazine

TruStile certified 75% recycled MDF doors with no added urea-formaldehyde (NAUF) featured in the2014 New American Home, co-sponsored by NAHBand Builder Magazine

Take the time to learn what building materials are being used in your home, and specify those with the lowest offgassing potential.  For example, medium-density fibreboard (MDF) is a very stable material that doesn’t warp.  Given Sunset Green Home’s coastal location and proximity to the water, we plan to specify MDF interior doors.  But we’re specifying MDF doors made by TruStile that contain “no added urea formaldehyde” (NAUF) resins, as urea formaldehyde is a known carcinogen.

In fact, the LEED green building program is so concerned about VOCs that many low-emitting building materials can earn a project ½ point each toward certification.

EPA Radon Map

Radon gas is another dangerous pollutant that is linked to increased risk of lung cancer.  The EPA publishes a radon risk map and a Consumer’s Guide to Radon Reduction, and recommends that all homes be tested for radon gas.  If your home is found to have an elevated level of radon, you will need to hire a qualified radon mitigator to install a system that will pipe the radon from under your home to prevent it from finding its way inside.  LEED for Homes requires homes in the highest radon risk areas to incorporate radon-resistant building methods and offers credit to homes in lower risk areas if they voluntarily include such strategies.

Keep mold and mildew from forming by running bathroom fans, venting attic spaces, and maintaining relative humidity in the home in the range of 30% – 50%.  The LEED green building program offers credits for projects that install bathroom fans with occupancy and/or humidity sensors that operate automatically when conditions warrant.

Broan QT Series Humidity Sensing Fan

Broan QT Series Humidity Sensing Fan

Delta BreezSignature Ventilation Fan

Delta BreezSignature Ventilation Fan

Panasonic WhisperGreen Fan
Panasonic WhisperGreen Fan

Pesticides and fertilizers are widely used outdoors and can be tracked inside on the bottoms of our shoes.  One simple way you can prevent these toxins from entering your home is to remove your shoes or use walk-off mats just inside the door.  In fact, LEED for Homes awards one point toward certification to projects that create a dedicated shoe storage area just inside the home.

Source Removal.  If toxins find their way indoors, find a means to remove them.

For example, use high quality filters to remove pollutants from the air that circulates through your heating and air conditioning systems.  Clean or replaces the filters regularly.  LEED awards points to project that use high quality HVAC filters that remove very small particles from the air that circulates throughout the home.

Dilution.  Introduce fresh clean air into your home to dilute any pollutants that are circulating in your air.  If the air outside your home is clean, open your windows to bring in fresh air.  If you live in a newly built home with a very tight building envelope, consider installing a mechanical ventilation system – an Energy Recovery Ventilator or a Heat Recovery Ventilator – that exhausts stale air and introduces fresh air into your home.

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And, if you’re like my friend and have a recently renovated or new home, consider following the LEED protocols for a Pre-Occupancy Flush.  According to the LEED for Homes Reference Guide, “flushing the house removes VOCs, ureaformaldehyde, and other air pollutants that remain after construction.  These pollutants are mostly caused by off-gassing paints, adhesives, and sealants. Flushing the home also removes some of the dust and particulates that remain from construction.” Flush the house with fresh air for at least 48 hours by taking these steps:

·         Open all windows and interior doors (including closets and cabinets)

·         Run all fans (bathroom, kitchen and central air/heat system)

·         Use additional fans to circulate the air within the home

·         Clean or replace all central air/heat system filters at the end of the preoccupancy flush

Regardless of whether your home is LEED certified, you’ll breathe easier knowing you did what you could to improve your indoor air quality.

Help, Our HOA (or Condo) Needs Money!

Jim Slaughter

Community associations can become cash-strapped for a variety of reasons—unexpected large repairs, increased utility expenses, weather related emergencies, or simply years of poor planning.  Often the current board members are not the ones to blame.  After all, they are simply trying to locate funds to pay necessary expenses, without which essential services such as water or electricity may be cut off.  While there can be instances of financial malfeasance, most association financial crises are not the result of intentional wrongdoing.  We most often see associations that have tried to keep assessments low for many years running headfirst into increased utility costs or unexpected expenses, at which point it is more difficult to deal with the problem.

Keep in mind that community association finances are pretty much a zero-sum game.  As nonprofits condo and HOA associations tend not to have excess money sitting around.  Even association reserves, if any, are often earmarked for specific future needs.  In the event of a shortfall, an association can only really increase revenues (assessments) or decrease expenses (services).

While saying that assessments must be increased or services decreased may sound simple, it can be difficult in the community association context.  Certain services (water, sewer, power) may be an obligation of the association over which the association has little control.  And governing documents may restrict how much assessments can be raised each year by the board alone.  Based on the language of some governing documents, approval of large assessment increases by the members may be difficult due to high membership vote requirements.

The options for addressing financial shortfalls will vary by state statute, type of association (condo association or homeowner association), and the language in the governing documents.  However, here are some typical association approaches that may be worth discussing with association counsel:

  • Decrease other services, even if only temporarily until revenue issues can be addressed
  • Unless there are zero delinquencies, work to improve full and timely assessment payments (sometimes simply accelerating the process can make collections more successful)
  • See if the association is covering expenses that should be the responsibility of unit owners (as is sometimes seen with townhome and condo associations)
  • See if there is a governing document basis for billing back utility charges (or other expenses) to unit owners based on usage
  • Increase assessments to the full percentage increase permitted by the board alone without member involvement (and do that several years in a row)
  • Increase assessments beyond the percentage increase permitted by the board alone through a membership vote
  • Impose a special assessment for a specific purpose through a membership vote
  • See if the Declaration permits the board to impose an emergency assessment, as some older documents allow
  • Consider a loan (usually guaranteed by future assessment stream).  While a loan to cover operating expenses is not an option we would normally recommend, it might allow the association to survive into the coming year when assessments could again be increased by the board)
  • Use the language of the governing documents to amend the Declaration (to change either the assessment percentage or the vote required to change assessments)
  • Depending on the state and type of association, statutes might authorize a specific membership vote to amend the Declaration even if the documents are vague
  • Depending on the language of the governing documents or state statute, take some of the membership votes described above by mail ballot vote rather than at a meeting
  • Depending on statute, judicial relief (such as the appointment of a receiver to manage the affairs of the association) might be available
  • If the association’s situation is truly dire, the possibility of association bankruptcy (as difficult as that may be) could be broached with an attorney who focuses on community association law

 

In addition to these legal options, almost all association finance problems must also involve political considerations.  After all, why are members unwilling to provide funds to keep the association functioning?  When I hear that unit owners will not vote to do something, the impact of which could destroy the association, I have to wonder if a different political approach would help, whether greater efforts at a full membership meeting, an informational Q&A session with members (where depending on the circumstances the association attorney or other professionals such as an engineer or a CPA should speak), or a door-to-door campaign.

For frequently asked questions on North Carolina HOA and condo laws (including budgets, assessments, and calling board or membership meetings), visit North Carolina HOA/Condo Law Frequently Asked Questions.  For other states, visit the College of Community Association Lawyers (CCAL) State Law FAQ’s page (it’s an open page, so if a login box appears just close it, or just search “CCAL community association state law FAQs”).