Type A Machines a company that makes desktop 3-D printers is one of several start-ups at The Gate innovation center in San Leandro, Calif., Friday, July
Type A Machines a company that makes desktop 3-D printers is one of several start-ups at The Gate innovation center in San Leandro, Calif., Friday, July 25, 2014. San Leandro is looking to turn things around with the new innovation center that has attracted tech start-ups, artists and a brewery. (Anda Chu/Bay Area News Group)

SAN LEANDRO -- This small town between Oakland and Hayward is coming out of the downturn like few places around, attracting tech startups, artists and brewers to a onetime traditional industrial hub.

"San Leandro is embracing change for the first time in decades," said Deborah Acosta, the city's first innovation officer.

The boom is the result of a happy convergence of action and resources -- available long-vacant or underused manufacturing sites; a businessman who financed a fiber optic loop in city-owned conduit and the city jumping into a public-private partnership with him, the first of its kind in the Bay Area; and using broadband to lure tech firms.

San Leandro also has been aggressively marketing its lower rents, proximity to the Oakland airport and port, and willingness to work with businesses.

"We really do put an emphasis on smoothing the permitting process and letting businesses know, 'Hey, we're really excited you're here,'" said Jeff Kay, San Leandro's business development manager. For more than a year, the city has waived business license fees for new companies.

Espen Sivertsen moved his 3-D desktop printer manufacturing firm from San Francisco after looking at more than 50 sites.

"We were 18 people in 350 square feet of office space in San Francisco. It was obvious we needed to move," he said. His Type A Machines chose The Gate, 350,000 square feet of work spaces on the second floor of a former car factory.


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The Gate has been filling with artists, entrepreneurs and tech startups since its owners reinvented it as a collaboration center this year. Before, it had few tenants, most of them on the ground floor's West Gate San Leandro with a Home Depot, Sports Authority and other stores.

Now, artists and tech dreamers busily pursue their projects on the second floor above unknowing shoppers. Sivertsen moved in, asking 10 other 3-D desktop printer firms to join him. Most work near each other in a large space with high ceilings and natural light.

"This is the world's largest cluster of 3-D desktop printer companies. It's a coalition of noncompeting startups; we're building a 3-D ecosystem," he said.

Other recent large developments in the city include a Kaiser hospital built on the site of former grocery distribution center, a planned downtown tech campus where a cannery once stood, conversion of a lumber yard into a cold-storage warehouse, a brewery taking over a vacant cereal plant, and the Westlake/OSIsoft Technology Complex -- three six-story, 300,000-square-foot tech office buildings where a Del Monte cannery closed.

"I'd like to think we're ahead of the curve," Kay said, as many cities struggle with remaking 20th century industrial districts.

Espen Sivertsen CEO of Type A Machines, a company that makes desktop 3-D printers, and David Holley, property manager of The Gate innovation center, from
Espen Sivertsen CEO of Type A Machines, a company that makes desktop 3-D printers, and David Holley, property manager of The Gate innovation center, from left, pose for a photograph in San Leandro, Calif., Friday, July 25, 2014. San Leandro is looking to turn things around with the new innovation center that has attracted tech start-ups, artists and a brewery. (Anda Chu/Bay Area News Group)

Not only does The Gate have fiber optic service, its leases start at 90 cents to $1.25 a square foot, compared with $25 and up in San Francisco.

One of the businesses joining Sivertsen is Mind-2-Matter, which uses 3-D desktop printers to make everything from advertising swag to casts for jewelry.

Making the move was not an obvious choice for co-founder Rod Wagner. "It's an hour commute if I'm lucky; it can be up to 2½ hours," the Cotati resident said.

But he found it worth his while to be close to the other 3-D printers. He worked for Atari in the early days of Silicon Valley and sees the same potential for a leap forward at The Gate.

Justin Kelly and Rod Wagner, from left, pose for a photograph with pieces their company Mind-2-Matter have produced using 3D printers and lost resin
Justin Kelly and Rod Wagner, from left, pose for a photograph with pieces their company Mind-2-Matter have produced using 3D printers and lost resin casting at The Gate innovation center in San Leandro, Calif., Friday, July 25, 2014. San Leandro is looking to turn things around with the new center that has attracted tech start-ups, artists and a brewery. (Anda Chu/Bay Area News Group)

"You can build on each other's ideas; creativity is encouraged. It's the same thing as when people were moving out of the garages in Silicon Valley," he said.

Collaboration and flexibility is The Gate's appeal, said Cheryl Edison, its development manager.

"Companies today in the new economy are all about collaboration and sharing," Acosta said. "Fiber optic is important, but what's more important is community."

In a 10,000-square-foot section, The Hive art collective is creating large sculptures for Nevada's Burning Man festival.

When one of its projects stalled for lack of a custom-made piece, Mind-2-Matter's Justin Kelly 3-D printed the part at a fraction of the cost and time of a traditional fabricator.

Yitian Cauthen runs quality control tests on desktop 3-D printers being manufactured at Type A Machines one of several start-ups at The Gate innovation
Yitian Cauthen runs quality control tests on desktop 3-D printers being manufactured at Type A Machines one of several start-ups at The Gate innovation center in San Leandro, Calif., Friday, July 25, 2014. San Leandro is looking to turn things around with the new center that has attracted tech start-ups, artists and a brewery. (Anda Chu/Bay Area News Group)

Gate tenants gather for lunch or a beer at Drake's, down the ramp from the second floor. Such places to eat and drink are amenities that attract new-economy businesses, Kay said.

South of The Gate, 21st Amendment Brewery is converting a closed Kellogg's factory into one of the region's biggest breweries.

"Finding a large building like Kellogg's was ideal," said brewery co-founder Nico Freccia.

Almost a quarter of the city's land is zoned industrial. In the mid-20th century, San Leandro had West Coast plants for Chevrolet, Chrysler and General Foods. More than 20,000 people worked in manufacturing there.

In the 1970s, those jobs began moving offshore and to lower-cost states. The recession hit the city hard, but it began preparing for an upturn, Acosta said.

OSIsoft CEO Patrick Kennedy offered a big boost in 2010 with his public-private fiber optic project offer. "The city basically said, 'Heck, yeah, we'll do this,'" Acosta said.

Kennedy's international software company needed more Internet bandwidth, so he sought to run fiber optic through 11 miles of underground city conduits.

"Within a few months, we had a licensing agreement," Kay said. The city has a grant to extend fiber optic 8 more miles.

Cities such as Palo Alto and Sunnyvale have public fiber optic, but "San Leandro's public/private arrangement is, as far as I know, unique," he said.

The city's fiber optic success in luring startups has led to San Leandro representatives being invited to speak at national conferences. The city has something to teach, a development consultant said.

"San Leandro is establishing itself as a city-scale lab for innovation. Only months ago, (it) was a relatively unknown Bay Area city," said Greg Delaune, CEO of UIX Global.

Kennedy's company, Lit San Leandro, is working with other East Bay cities on similar ventures.

Everyone should have fiber optics to maintain the region's competitive edge, Acosta said.

As San Leandro's vacant sites fill, it is looking at its industrial area, Kay said.

"We want to humanize (it), bring in better lighting, bike lanes, public art, more amenities," he said. "We want to be able to attract new manufacturing.

"We're not going to have 500 people with lunch pails going to a Chrysler plant. It's going to look a lot different from ... 50, 70 years ago."

Contact Rebecca Parr at 510-293-2473.

or follow her at Twitter.com/rdparr1.

San Leandro booms
Some of the city's reinventions of manufacturing and industrial sites:
The Gate: The second floor of a former Chrysler auto plant is being transformed into an innovation center for startups, artists and entrepreneurs.
21st Amendment Brewery: A onetime Kellogg's cereal plant will become a 95,000-square-foot brewery.
Kaiser Permanente Medical Center: A hospital and medical offices opened this year on the site of a one-time grocery distribution center.
Downtown tech campus: The Westlake/OSIsoft Technology Complex will have three six-story, 300,000-square-foot tech office buildings where a Del Monte cannery closed decades ago.
Preferred Freezer: A 247,000-square-foot cold storage warehouse now occupies the one-time Hudson Lumber Co. site.