877 Cedar Street, Santa Cruz, California
877 Cedar doesn’t look like a microcosm of the last ten years of the United State’s economic history, but it is.
On first look, it has many hallmarks of a particularly brutal era of American architecture, aggregate concrete walls with technicolor pebbles, surface parking lot, flat roof and the svelte profile of a Hudson River garbage scow.
But a closer look reveals a building whose history encompasses media (both new and old), the real estate meltdown, downtown revitalization, the growth of the internet and the rise of flexible workspaces.
Originally erected in 1966 for the Santa Cruz Sentinel (established 1856), the “Sentinel Building” used to house the entire operation of the paper, from the the presses and photo labs to distribution, editorial and advertising. But in in 2009, after years of bouncing between corporate owners, including Ottoway and Dow Jones, the Santa Cruz Sentinel was sold to the “Bay Area News Group,” run by Dean Singleton, whose business strategy was to buy up local papers, cluster their operations and sell off their tangible assets, proving a short term cash bump to his investors at the expense of local journalism.
The physical press went first. Hauled out on the back of a flatbed truck off to the scrap heap, but not before causing a major accident on Highway 17 (no one injured) on the way to the crusher. Ironically, the story was covered in the Sentinel the next morning, although a link is hard to kick up in the Sentinel’s online archives.
Copy editing went to Chico, photographers became freelancers, and in 2008 the rest of the professional staff moved out to a frontage road in Scotts Valley, California, 10 miles east of their beat.
The Sentinel building was sold to a commercial real estate firm from San Francisco, Fowler Property Acquistions, for $6.55 million in 2007. Fowler also owned offices in Scotts Valley where the Sentinel ended up before they defaulted on those too. With corporate credit tough to secure, foreclosure proceedings were started and a few months later Transom, a commerical auction house put 877 out to bid. At the time, the editor of the paper openly mused if the building was worth the minimum reserve of $250,000.
The auction came and went and Cruzio, a locally grown Internet services provider and Ecology Action, an energy efficiency organization, stepped up and secured the title to begin an ambitious rehabilitation project. Over the next year, workers started pulling gigabit internet into the building, increasing its energy efficiency and and adding solar and backup generators to the roof. Some of this work was funded by “Buy America Bonds” that were issued as part of the ARRA (American Recovery and Reinvestment Act) and sponsored by the City of Santa Cruz. The redevelopment was led by Appenrodt Properties.
In addition to bringing more than 200 employees back downtown, Cruzio and Ecology Action used the aggregate square footage in the building to set up flexible workspace for co-working as well as small firms, like Looker (who has since gone on to raise more than $30 million in VC funding and now occupies three stories of the building across the street) and others moved in, maxing out occupancy in the building during the depths of the Great Recession.
Concurrent with its downtown investment, Cruzio also started talking to the City about deploying one of the only municipally backed fiber-to-the-home projects in California in an attempt to curtail some of the commuting that clogs local airways and highways as 20% of the county’s workforce drives “over the hill” to Silicon Valley each morning. Also an attempt to upgrade the region’s nearly shameful broadband options. (Since 2010, both Comcast and AT&T have invested in local infrastructure).
OpenCounter plays a small supporting role in these economic development efforts. We process license and permit applications from many of the new businesses growing in the Sentinel building (for another client, the City of Santa Cruz’s Finance Department). Incidentally our press conference with Code for America’s Jen Pahlka unveiling the first version of OpenCounter was held in January of 2013 in the co-working space. The following photo regretfully survives in Google Image Search:
