Economy

"Our human destiny is inextricably linked to the actions of all other living things. Respecting this principle is the fundamental challenge in changing the nature of business."
- Paul Hawken, The Ecology of Commerce

 

A SUSTAINABLE ECONOMY
- = Sustainable Economy Initiatives = -

Oakland/Berkeley Recycling Market Development Zone

The Oakland/Berkeley Recycling Market Development Zone gives support and assistance to manufacturing and processing companies which create value-added production from re-used and recycled materials, encouraging them to locate within the Zone, and assists existing companies to expand. It is the most successful of 40 such zones in California.

Origins and Development

The Oakland/Berkeley Recycling Market Development Zone (RMDZ), in the San Francisco Bay Area of California, was established in June 1992 to help companies using recycled materials to expand, and to attract new ones to locate in the Zone. The RMDZ is one of 40 such zones designated by the California Integrated Waste Management Board.

Aims and Objectives

The RMDZ aims to create economic opportunities out of otherwise costly environmental liabilities. By encouraging and assisting businesses to utilize recycled and re-used materials in the production of value-added products, it creates local jobs, diverts useful material from the local landfill, and enhances the local tax-base. Ecologically, it contributes to the creation of a closed loop materials economy, and increases the efficiency of resource-use (mainly paper, glass, plastics and metals). It also contributes to the City of Berkeley's unique economic development policy, which offers permit assistance and low interest loans to attract and retain environmental businesses, and seeks to establish itself as the 'Green Valley'.

Activities

The RMDZ provides four main types of support to businesses using recycled materials :

(1) Assistance with site selection and permit processing; (2) Loan and grant packaging, and other financial services; (3) Active promotion and development of markets for recycled products; (4) Organized information about the supply of recycled materials feedstock. The 1994 program focussed on the retention and expansion of existing recycling businesses, and on attracting and forming new recycling businesses, with a special emphasis on companies which use mixed paper, mixed plastics and tires, and companies which make building construction products, such as wallboard and carpeting, from recycled materials. The program also worked on developing the recycling market as a whole, and overall program support and management.

Structure

The RMDZ is administered through the City of Oakland's Office of Economic Development and Employment, in conjunction with the City of Oakland's Office of Public Works, and the City of Berkeley's Offices of Community Development and Public Works. This degree of cooperation did not come about through any legislative mandate, but through voluntary cooperation, building on the existing framework of programs supported by the economic/community development and public works departments of both cities. The synergy created by this level of interdepartmental and interjurisdictional cooperation has removed duplication, and opened up a lively line of communication between the different departments. The RMDZ receives additional support from the private and the non-profit community, through local Commerce Associations, Recycling Associations and the Chamber of Commerce.

Finance

For 1993 and 1994 combined, the RMDZ program's total expenditure amounted to under $325,000, which comes from Oakland and Berkeley City Governments. The program has attracted an additional $65,000 in grants, and also helped several businesses to win grants. The California Integrated Waste Management Board offers low interest loans for businesses utilizing recycled materials of up to $1 million. The Oakland/Berkeley Zone is only one of 40 RMDZs in California, but in 1994 businesses in the zone received 37% of the loans funded by the Board as a whole. The Alameda County Recycling Board has recently developed a $750,000 million revolving loan fund, which provides similar low interest loans up to $75,000. The Cities of Oakland and Berkeley also operate revolving loan funds, and Oakland runs a microloan fund for general economic development.

Problems

There is often a lack of market demand for finished products made from recycled materials. While there are still technologies that need to be developed to be able to utilize recycled materials, there are many technologies already in place that can be used. However, until people are willing to buy recycled products, the development of recycling businesses will be limited. One of the greatest incentives of the RMDZ is the state's low interest Recycling Loan Program. While the Oakland/Berkeley RMDZ has been very successful in closing loans from this fund, it may not be appropriate for all companies. The loan fund requires a significant amount of collateral, and there are some companies that cannot meet the state's requirements. In these cases, the RMDZ Zone coordinator tries to find alternative funding sources such as City Revolving Loan Funds, or the County Recycling Loan Fund. Resources for start-up companies are very limited.

Performance

Since opening for business in January 1993, the Oakland/Berkeley RMDZ has been responsible for :

* Generating over $8.2 million in investment in recycling and reuse;
* Successfully packaging $4 million in loans and grants for recycling businesses;
* Creating over 155 new jobs;
* Supporting businesses that employ 135 people in the region;
* Diverting over 100,000 tons of new material from area landfills;
* Supporting existing businesses that divert 287,000 tons of material from area landfills.

Among new businesses formed, 'Create-A-Saurus' is a local minority-owned company making playground equipment in the shape of dinosaurs 4 to 9 feet long, from re-used and recycled off-road tires. The RMDZ gave Create-A-Saurus technical assistance which helped them win a $60,000 grant from the Alameda County Recycling Board to purchase equipment and assist with start-up costs, and helped them become a tenant in the Oakland Small Business Growth Centre, a City-sponsored incubator program. One company which chose to locate in the Zone, MBA Polymers, is a plastics recycling research pilot lab and demonstration facility, which has developed the only machine in the world able to easily distinguish different types of plastic, which contributes to greater capacity to recycle plastics. Appliance Recycling Centres of America (ARCA), a nationally recognized leader in the field of environmentally-sound appliance processing and recycling, has chosen to locate in the Zone, employing 20 full-time staff. Ultimately, the facility will employ 55 people, and be able to process over 100,000 appliances annually. Other companies that have located in the Zone deal with products such as re-usable linen for incontinent residents in nursing homes; soils and mulches; the repair and reconditioning of wooden pallets; wood salvage; clothing and accessories made from scrap fabric and from used inner tubes; recycled content mailing tubes; recycled plastic display equipment; metal shredding and sorting; clothing and accessories; oil filter collection and reprocessing;

The RMDZ program actively promotes the Zone locally and nationally through direct mail, articles in the national and state media, sponsorship of a local trade show and conference which attracted over 500 people, and participation in national trade shows. In February 1994, the City of Oakland followed Berkeley's example and formally adopted a Source Reduction and Recycled Product Procurement Policy, designed to encourage the use of recycled materials. RMDZ undertook an extensive public education and outreach effort prior to the Policy's adoption, building the groundwork of support needed to ensure the policy's success. (For information, call City of Oakland Purchasing Department (510) 238-3521).

Future

The Zone will continue to work to retain, expand and attract businesses that use recycled and re-used materials to produce value-added products. The need to educate consumers - both individuals as well as commercial and industrial users - will become a crucial link in increasing the demand for recycled content products. A future goal of the Berkeley/Oakland RMDZ is to educate consumers on the important role recycled content products play in "closing the loop" in the recycling process. Additionally, the Zone will continue to actively promote the availability of high quality, readily accessible, recycled content products by participating in trade shows promoting these types of product. The success of the RMDZ demonstrates that some of the best opportunities to re-animate local economies are intimately tied to the intelligent utilization of green economic trends.

For further information contact :

Ms Christie Beeman, Zone Coordinator,
Oakland/Berkeley RMDZ,
Office of Economic Development and Employment,
City of Oakland,
1333 Broadway, Suite 900,
Oakland, CA 94612, USA

Tel (510) 238-3703
Fax (510) 238-3691


Written by Guy Dauncey for The Planning Exchange, Glasgow, Scotland.

guydauncey@earthfuture.com