The Marin Post

The Voice of the Community

Blog Post

The Future of the Marinship: PART I

“Make no small plans for they have no power to stir the soul.” ~ Niccolo Machiavelli

It’s a flaw of human nature that when faced with uncertainty, at a time when bold action is needed, we tend to put our heads down and retreat into rigid formalities and counter-productive thinking. This is enabled by a false sense of security because we believe that the future will somehow “just work out,” because it always has.

But what if it doesn’t?

Change is coming to the Marinship and the economic forces and overwhelming environmental forces at play indicate that it will be dramatic. What remains to be seen is whether it will be for the better or for the worse. That will take careful and deliberate decision making and planning.

Unfortunately, at government agencies, like most large organizations, decades of repetition based on unchallenged fundamental assumptions become enshrined as “best practices.” Past methods are relied upon, without question, and copied and pasted thoughtlessly until a city’s planning process devolves into an exercise in going through the motions rather than clear-eyed analysis and reinvention.

Ironically, what is often considered a demonstration of operating “efficiency” by those inside government is experienced as unresponsive and bureaucratic by those on the outside. But the opinions of these “outsiders” sometimes offer more clarity than is found within.

Evolutionary biologist Stephen Jay Gould studied sudden, unexpected change: dramatic events that are rarely foreseen but seem obvious in hindsight. He called this punctuated equilibrium. This is similar to Malcolm Gladwell’s concept of “tipping points”--where suddenly our basic assumptions are challenged.

Like it or not, a tipping point is approaching for the Marinship.

The Marinship: A once in a lifetime opportunity to leap ahead into the 21st century economy

The Marinship in Sausalito represents one of the most unique opportunities available to any city, anywhere. This expansive swath of waterfront on one of the most magnificent bodies of protected, deep channel waterways in the western United States, in proximity to one of the world’s greatest cities, in a region that has one of the world’s most dynamic economies, remains unmatched.

This has nurtured a thriving working waterfront community of trades and craftspeople, artists and artisans, inventors, fabricators, designers, engineers, entrepreneurs, shipbuilders, and an endless variety of light industrial and micro-manufacturing businesses and services providers.

At the same time, the Marinship faces some of the most formidable, existential challenges found anywhere, which include sea level rise, significant land subsidence, and rapidly failing infrastructure. A detailed analysis of this is found in recently published articles by Watershed Sciences and Community Venture Partners, in response to release of Sausalito’s General Plan Update Draft Environmental Impact Report (DEIR).

These challenges are reaching a point where addressing them in a sustainable way is becoming critical to the future of the Marinship, its property values, its ability to attract private capital and retain jobs, and even to the solvency of the City itself and its ability to generate tax sufficient revenues in the years ahead.

So we need to ask, in the face of all this, how is Sausalito addressing the Marinship’s challenges and capitalizing on Marinship’s unique potential? Based on the published draft of the Sausalito General Plan Update for 2040, the answer is… like a deer in the headlights.

The City's General Plan Update kicks the can down the road with proclamations of good intentions. But this is no time for small-minded tinkering.

The 21st century redefinition of “industry” and “work”

The Bay Area Economic Council recently published the following analysis of the state of industry and the manufacturing sector in its Economic Report, entitled, Reinventing Manufacturing.

“Technology is revolutionizing manufacturing processes through innovations in 3D printing, robotics and big data (the Internet of Things) – often based on innovations that come from California. A range of factors, including rising labor costs in China, are leading some manufacturers to bring production home. California is in a good position to capture much of this growth, but needs policies that support and incentivize investment.” [Emphasis added]

“With more manufacturing jobs than any other state, California has a diverse manufacturing base. Its innovation ecosystem, which has led to links between manufacturers and technology companies, makes it particularly well-positioned to take advantage of a resurgent interest in domestic manufacturing. This is especially true for products of an advanced technological nature and products that depend on custom design and rapid response to markets.” [Emphasis added]

As it stands, Marinship’s unique advantages, described above, combined with its existing industrial, manufacturing, and artisan zoning, and rare capabilities to serve maritime uses, mean that it is extraordinarily well-positioned to compete in this 21st century economy, held back only by a lack of vision and political leadership.

The federal government (MARAD) clearly recognizes the importance of having robust and thriving maritime industries, which it describes as follows:

“Shipyard activities include ship construction, repair, conversion and alteration, as well as the production of prefabricated ship and barge sections and other specialized services. The industry also includes manufacturing and other facilities outside of the shipyard, which provide parts or services for shipbuilding activities within a shipyard, including routine maintenance and repair services from floating dry-docks not connected with a shipyard.” [Emphasis added]

As noted by the American Maritime Partnership,

“America’s domestic maritime industry is responsible for almost 650,000 jobs and over $150 billion in annual economic output, according to a recent study conducted by Price Waterhouse Coopers for the Transportation Institute.”

And add to that another $43 billion per year for the pleasure boating industry, according to the National Maritime Manufacturers Association.

The Marinship has the potential to be a jewel in Northern California’s crown, attracting artisans, technology companies, light industry, manufacturing, maritime uses, and the ancillary support services they need. But the realization of this potential will diminish with each passing year, unless the City acts decisively to put a “stake in the ground” and declare itself open for business.

Otherwise, the Marinship will fall victim to over-reliance on the more challenging and outdated economics of tourism, bricks and mortar retailing, restaurants, and entertainment (think “Pier 39”) being proposed by the Kosmont Group. Add to that the pressure from state agencies to promote high-density housing programs that are designed to leave local governments holding the bag when the bill for the cost of related public services comes due, and you have a perfect storm. Under this scenario, the Marinship as we know it, will cease to exist and a golden opportunity will be lost.

Past is not prologue for city planning in the 21st century

Cities, like many other human enterprises these days, are being re-imagined, not just in reaction to the global pandemic, but because of technology and based on what the pandemic has taught employers and entrepreneurs about the nature of work, the definition of what a “job” is, how productivity is measured, and how this impacts profits. And for most cities, jobs, and particularly well-paying jobs that have a future in our new economy, are essential.

No one is claiming that working in offices or flying on airlines are a thing of the past. They will find a way to come back stronger than ever. But, being overly dependent upon consumption-driven business models will not ensure an economically sustainable future. Retailing, tourism, traditional entertainment, and the economics of supply chain management will never be quite the same, again. And the definition of what is considered “industrial” is also changing.

For example, new industries such as indoor, super high-yield, water-stingy, climate controlled, vertical aquaponic and hydroponic farming is no longer an “agricultural” zoning use, but instead is a green, carbon neutral, internally recycling, high-tech industry in its own right that never even touches the ground. Similarly, the line between artist, artisan, craftsman, and micro-manufacturer is blurring considerably with the advent of 3D printing, collaborative virtual design teams, and rapid prototyping.

Bob Machuca, a district manager with the Los Angeles Economic Development Corp., was recently quoted as saying that

“Manufacturing firms are looking for different skill sets these days that require innovation and problem solving. The days of conveyor-belt workers and smoke-polluting operations are largely gone.”

That said, the job market is pretty dismal right now and job growth is weak, particularly for blue collar workers. But in Marin County, this was true even before the pandemic. In January of 2020 the California Employment Development Department had predicted an anemic 1.28% (compounded) jobs growth per year for Marin, over the next ten years. And even that projection is now in jeopardy.

As things are, Marin has been rapidly swapping out quality, high-paying jobs for low-paying service jobs, even while a qualified, educated, local labor pool remains available. And the Marinship, a rare, industrial zoned waterfront area with attractive freeway access is not living up to its potential because there are no tangible incentives in place to invite investment by property owners or to entice third party investors to support its core economy. The resultant revenue stagnation will eventually reduce the City’s financial capacity to address the increasingly onerous hydrological, geological, and environmental challenges, creating a vicious downward spiral that, at some point, may be unstoppable.

Meanwhile, against this backdrop, Sausalito’s Marinship is losing or is in danger of losing some of the innovative, 21st century, technology companies it already has: companies like Engineered Fluids and others--exactly the kinds of companies the City should be working overtime to help stay.

Engineered Fluids, for example, is a cutting-edge, micro-manufacturing and scientific research and technology company, on the verge of expanding and adding dozens of new jobs to the local economy. But, Engineered Fluids can’t find anywhere in the Marinship to relocate and they can’t expand where they are because the area’s infrastructure is so antiquated that they can’t even get enough electrical power to run their operations. To add insult to injury, their rents were jacked up by more than 100%, possibly to make way for an illegal entertainment use.

So, unless Engineered Fluids can find a location, immediately, it will be forced to move away. In my opinion, this is a direct short-term consequence of the City’s long-term failure to address infrastructure deterioration, implement coherent public policy to support industrial/manufacturing businesses in the Marinship, and attract private investment. Moreover, it’s primarily a failure of imagination and understanding of markets and economics.

This kind of failing is epidemic in Marin. It is all enabled by our cities’ civic structure, whereby, through no fault of any particular individual, government affairs are decided by City Councils led by short-term, unpaid volunteers, who are well-intended but often unqualified in the required expertise: a dynamic that is simply incapable of long-term planning and execution.

I'm told that, to date, Sausalito’s response to the plight of Engineered Fluids has included sincere expressions of concern, but they are not powerless to do something about it: maybe not in time to help Engineered Fluids, but for other companies that will face the same fate in the future.

Positive change will not just happen because of a General Plan Update process

Without clear, supportive planning, public funding, and financial incentives for private capital to participate, nothing in the Marinship will change for the better. Private investment capital is not in the business of being charitable, but it is often readily available to work for the common good as long as a framework exists that is dependable and therefore profitable.

Believe it or not many developers what to do the right thing, even if only to cut down their time to entitlements by a few years. But programs, policies, and incentives need to be in place, first.

At a time when Sausalito should be doubling down on investment and developing financial incentives to support the Marinship’s industrial, manufacturing, artisan, and maritime heritage and doing everything it can to attract and retain 21st century businesses, by default, they are enabling the Marinship’s demise.

However, in order to turn the tide, the city is going to have to embrace the Marinship's biggest challenge, first.

CLICK HERE to read The Future of the Marinship – Part II: Innovation

Bob Silvestri is a Mill Valley resident and the founder and president of Community Venture Partners, a 501(c)(3) nonprofit community organization funded only by individuals in Marin and the San Francisco Bay Area. Please consider DONATING TO CVP to enable us to continue to work on behalf of California residents.