Green Wombat

originally uploaded by victor solanoy

San Jose bills itself as the capital of Silicon Valley. Now the California city is making a bid to become a green tech hub by selling itself as a startup friendly town that has embraced sustainability. Home to Adobe, (ADBE), Cisco Systems (CSCO), eBay (EBAY) and other tech giants, San Jose in December scored its first big green tech player when Nanosolar agreed to build the world’s largest solar cell manufacturing plants in the city. (Showing its commitment to tech recycling, the Nanosolar plant, shown at right, is the site of a former Cisco manufacturing facility.)
Green Wombat recently talked to Paul Krutko, director of the San Jose Office of Economic Development, about the competition to lure renewable energy companies and other green firms. San Jose, of course, starts out with a few advantages over, say, Austin, Boston or Bangalore.  The valley boasts a well-educated, tech savvy workforce and the capital of venture capital is but a short Beemer ride away, as are the idea factories at Stanford and the University of California, Berkeley. The downsides are the region’s $700,000-for-a-tract-home housing market and not-so-green clogged highways. "We are very focused on how we can leverage our assets as a center of
innovation in the United States," says Krutko. "We’re tying to forge a
cluster of companies and institutions that are actively advancing clean
technologies."

But Krutko says when competing for clean tech companies, cities need to show their green cred as well as the green startups will save in the form of tax breaks and other financial incentives. So San Jose touts its green building initiatives – it opened the world’s first LEED (Leadership in Environmental Design) certified public library – and
cites local companies’ efforts to fight global warming. Software maker Adobe’s downtown San Jose headquarters, for instance, has been rated the greenest corporate building (photo by twisesq at left) in the United States. And it probably doesn’t hurt that Al Gore drops in now and again to meet with area tech leaders. Green tech companies, says Krutko, are "looking at communities that have an approach to sustainability. It is very much a competitive advantage in having a community that really gets it in dealing with the global issues we’re facing in terms of climate change and global warming." A point validated last week by oil company BP (BP) when it chose to locate a $500 million biofuels research center at UC Berkeley, in part, because of California’s leading-edge efforts to fight global warming.

To lure Nanosolar, which has bankrolled $100 million in venture capital funding, San Jose officials offered $1.5 million in tax breaks and other incentives. "The state of Nevada and the state of Arizona were attempting to lure this facility with large amounts of public money,"  Krutko says. To fend off out-of-state competition – as well as other Silicon Valley cities – San Jose has taken a venture capital approach and invested in a Pacific Community Ventures fund that will finance local companies. Krutko says San Jose is also streamlining the permitting process and changing development regulations as green tech startups move into office parks and tilt-ups – those sprawling one-story buildings that were occupied by first-and-second generation tech companies.  "The currency in the valley is not about what you do with tax incentives or a grant," Krutko notes. "Our currency is really about time to market. Market entitlements and the ability for a company to find space and quickly occupy that space and move forward."