With Today's NRC Announcement, Has The Albatross Been Taken Off Elk Grove's Neck?


March 25, 2016 |

This morning's announcement that Fremont, Calif.-based NRC Manufacturing will open a facility in Elk Grove's Southeast Policy Area (SEPA), Mayor Gary Davis and his fellow council members can place a check mark on their long punch list.

Later this morning when Davis formally announces the development at his annual State of the City Address, undoubtedly there will be plenty of fist bumps and high-fives going around. Even though the details such as environmental impacts of the manufacturing facility and any economic incentive that might have been offered NRC will need examination, undeniably this is good news for Elk Grove.

Given that it will be located in the SEPA, perhaps claims coming from the dais will, for once, carry a smidgen of credibility with the public. Furthermore, the recruitment of this employer could be the goosing the Howard Hughes Corporation needs to do it or get off the pot with regards to the unfinished mall.    

As the process evolves, there will be other things that the council and the public will need to carefully consider. For instance, while the new jobs are great, will they pay sufficient salaries to the workers that would allow them to live in Elk Grove? If the wages are such that workers cannot afford market rate housing, will, and should, any special consideration be given to expand non-market rate housing in the SEPA area?

Furthermore, this announcement is but one check mark off the lengthy punch list for the city council and executive staff, much more work still needs to be done. While we will not offer congratulations to the city council and executive staff - these  are the jobs they were elected and hired to perform - this development could help lift the albatross that has hung around the neck of Elk Grove for all these years.   




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10 comments

Anonymous said...

Hopefully this will be good news for Elk Grove. I'll be waiting for the details and hoping the devil is not in there somewhere as has been the case so many times previously. It's time we had some good news for a change.

Warren Buffett said...

In terms of the Silicon Valley food chain, circuit board manufacturers who build to specs under contract are at the bottom. They neither invent nor design engineer. Wages are at the bottom of the food chain as well. Not too long ago, before OSHA clamped down, this industry was classified as "dirty industrial".

In this case, Elk Grove competed against China and won (for the time being). To even win Round One indicates to me that some kind of financial incentive was given. If true, then the taxpayers are in effect, investors of this company. As they say, the devil is in the details. One can certainly share NRC's enthusiasm about landing future contracts and expanding beyond their initial modest building in Elk Grove. But as an investor, I hope my money was used wisely.

Do we know what NRC's cost of production is, is it competitive, and can it be sustained in the face of global competition from Asia, Latin America, and soon to be Africa? The so-called synergy of Silicon Valley requires that businesses be in close proximity to share in the brain trust and engineering, but lowly circuit board manufacturers are just one UPS flight away. I don't mean to pour cold solder on this deal, but it does not sound like the "game changer" the Mayor has presented.

I look forward to reviewing the term sheet of any incentive deal, and if one was not necessary, then I really question how long NRC can use Elk Grove to beat out it's lower cost global competitors?

Anonymous said...

Didnt the initial article say that the City and NRC will be in discussions for the next 6 months? This deal is NOT done.

Anonymous said...

Kudos to Mayor Davis for staying laser focused and betting on this game changer. Elk Grove will be a chepaer version of San Jose and I am very excited for this. Hopefully the enviros and haters won't kill this great opportunity. And you can bet that the mall will jump alive when these 25,000 jobs come to town and with all the soccer activity, futuristic civic center and aquatic center we will be the envy of the Sacramento region and you can also bet that the Republic will be calling Elk Grove home too. So my question is where do I submit my job application?

Not a democrat giving a free pass said...

How long are we gonna have to listen to the Mayor dribble on about this "game changer"? Oh that's right, election night, November 8th.

Anonymous said...

If he keeps dribbling, he can change the game. If he should instead start driveling, then we may grow weary of having to listen. I say keep dribbling Gary! Game on, SLAM DUNK!!! Boom.

Lynn said...

I remember "laser focused", Jobs:Housing Imbalance, and now we have "Game Changer"....I love Elk Grove!

Anonymous said...

While I agree this is great news for Elk Grove I do find some of the information being provided by the city/media to be somewhat lacking in facts I can't follow. Based on information I have this is a company that was formed in 2008 and now employs 18 people with a pay scale of $12 - $14 an hour with no benefits. My question would be how do they plan on expanding by the end of 2017 to 600 jobs, where do those jobs come from, how will employee transportation needs be met, will future majority of workers be minimum wage earners? As mentioned in the article what are the environmental impacts to the city? In the past that has been a hugh problem and hopefully has now or will be be considered should they locate here.

While much of the information being provided is based on speculation I hope for the best for the city and Mr. Chea and will be anxious to know the details when provided.

Anonymous said...

These are by their very nature low-paying jobs. Just look at the pay scale in the industry right now. And since everyone seems to be in love with Apple don't be surprised when this company follows Apple's current labor model.....temp agencies and jobs. No bennies whatsoever. When we talk about jobs I'm sure the majority think of real jobs....bennies, 401K, etc.

Don't take the ticker down just yet EGN.

Anonymous said...

Statement from the BizJournal....."The deal isn’t yet final. This week the city and company signed an exclusive agreement to work out details over the next six months. The city has not granted any tax breaks or other financial incentives so far, officials said."

It seems the Mayor has made a major announcement and the city has signed an "exclusive agreement". Now if I am NRC, that is exactly what I would want my position to be...in total control. Now lets bring on the incentives and see if we can't work something out in the next six months or I'm down the freeway to a better deal.

I hope this is not the case, but our record is not the greatest.

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