San Jose and Santa Cruz have had a symbiotic relationship in commerce and leisure since the non-Indigenous modern founding of both regions in the 19th century. From mass clear cutting redwood logging to the tourism boom of early days to the tech boom of today, if you still believe that is going on. It is. And did I mention surfing?
In some ways Santa Cruz and the coast in general served as the first climate-driven tourist destination—more of that to follow in our future—as steamy trains from roasting San Jose full of day trippers headed to the cool waters and skies for relief in the pre-AC era. Still do, sans the trains sadly.
We have been fortunate to transact business in and around Santa Cruz spilling over from San Jose for a long time, but only lately as a more active broker in town. Why? Because I started surfing regularly around 15 years ago, very late in life. Not alone in that either. Did I mention surfing?
I have become fascinated by the quantity of makers and innovators that pervade the whole town. Recall that Santa Cruz and Black Rock City—Burning Man—share the same population size more or less. Silicon Valley proper is 20 times the size. So, what gives for such a relatively small size region?
Obviously the 45-minute drive is key now that the six-hour accident-delay version can mostly be avoided in the traffic app/go-to-office-when-you-want era. But in the pan- and post-demic era all things changed and very much in Santa Cruz’s favor. We all see the blaring media posts about the mad rush to residential real estate given the remote “work and surf” era fueled by the Tesla driving engineers that won the lucky stock option spin. But there is more than that.
UC Santa Cruz was the pioneer higher education center in all things environmental studies and related science in the stone(r) age of the 70s. Those scientists and innovators seem to also drift to the surf and outdoor sports community.
Early tech founders chose the coast for purely lifestyle reasons. The results are astounding. A few highlights of native enterprises over the years and of today:
- Borland—Founded in 1983, Borland has helped thousands of organizations improve and automate their software development capabilities. In 2009 Micro Focus acquired Borland, and subsequently by OpenText in 2023. Its offerings continue to support the needs of software teams who must rapidly adapt to the increasing volume and velocity of evolving business requirements.
- Seagate—A global leader for over 40 years, the company crafts precision-engineered data storage.
- Netflix—A streaming service that offers a wide variety of award-winning TV shows, movies, anime, documentaries and more.
- Plantronics—Produces audio communications equipment for businesses and consumers.
- Joby—A U.S. venture-backed aviation company, developing an electric vertical takeoff and landing aircraft that it intends to operate as an air taxi service.
- Santa Cruz Bikes—A manufacturer of high-end mountain bikes based in Santa Cruz. They sponsor the Santa Cruz Syndicate, a downhill racing team.
- Cruz Foam—A materials technology company that’s working to catalyze the global transition from single-use petroleum-based plastics to all natural, renewable materials.
- Prometheus Fuels—An energy startup developing tools to filter atmospheric CO₂ using water, electricity and nanotube membranes to produce commercially viable fuels.
- Spanner—A Silicon Valley-based product design and engineering studio. It specializes in designing and engineering physical products for leading brands, including startups and Fortune 500s. Its work spans a range of sectors, including consumer electronics and medical.
The San Jose commercial real estate development community thrives in Santa Cruz as well. The empire of Swenson takes the headlines, with more projects in Santa Cruz/Scotts Valley than the rest of its Silicon Valley portfolio combined. As a multi-generational part-time coastal resident, founder Barry Swenson loves his tale of parking on the beach in the late 50s for some teenage hijinks only to have the tide come up and swamp the car into oblivion.
Maybe he looked up then and saw the future. Go see the Bahia resort and retail site under construction at the Boardwalk, the entitlement process took nearly as long. Game changer.
Not to be overlooked are the food science and technology industries that radiate out from Salinas Valley. Pioneers in food packaging, bagged salads, production and distribution and health supplements all benefitting from the unique climate conditions that make it the Brussels sprout/artichoke empire of the world.
And the surf community. Perhaps the earliest environmental activists, how can you not be if you mix part of each day with the most plentiful and diverse marine life imaginable within arm’s reach. Plenty of business and cultural leaders make it a habit later in life, it is a very low impact sport, except when it isn’t. There is a trust and bond in the lineup that allows for more far reaching onshore connections.
So, paddle out… and innovate Santa Cruz.
San José Spotlight columnist Mark Ritchie is the owner of commercial real estate brokerage firm Ritchie Commercial, and has spent his entire career in commercial real estate. His columns appear every second Wednesday of the month. Contact Mark at [email protected].