Wielding increasing power and popularity, GSEC’s brash, pricey Barry Broome looks to build on failed Amazon bid
On a brisk October morning last year, local leaders gathered outside Golden 1 Center in Sacramento to make a pitch.
The ask: Get Seattle-based tech giant Amazon to build a second headquarters in the region, bringing 50,000 high-paying jobs and potentially reshaping Sacramento’s economy for decades. The event included speeches from Rep. Doris Matsui, Sacramento Mayor Darrell Steinberg, Kings owner Vivek Ranadive and the effort’s leader, Greater Sacramento Economic Council president and CEO Barry Broome.
In the nearly three years he’d been in town, since arriving from Arizona after a decade-long stint leading the Greater Phoenix Economic Council, it was by far Broome’s highest-profile effort in Sacramento. And to support it, no shortage of public subsidies were quietly on the line.
A proposal GSEC submitted that day to Amazon—but didn’t release publicly at the time—lists 12 regional sites and hundreds of millions in potential subsidies. Elk Grove alone offered $100 million in infrastructure financing, $110 million in job creation grants and $71.5 million in impact fee deferrals.
The region’s proposal wasn’t among 20 finalists, Amazon announced in January. Within GSEC, a source close to the proposal said, no one expected Sacramento to have a serious chance of landing the headquarters. Regional leaders have openly described the effort as more of a practice run—a blueprint for future recruitment efforts. But the proposal, which GSEC released to The Sacramento Bee in February and also provided to SN&R for this story, is a revealing sign of a tectonic shift that’s occurred locally in recent years.
Public-private partnerships like GSEC wield much influence in the Sacramento region. These groups have the go-ahead to sometimes play fast and loose with public money. There’s just some question, beyond all the hype, of what the public is really getting.
One thing’s clear: The services of GSEC’s leader don’t come cheaply.
The most recent Form 990 for the organization, a 501(c)3 nonprofit, shows Broome receiving annual compensation totaling $635,280 for the 2016-17 fiscal year.
By contrast, most city managers and county executives in the region make between $300,000 and $400,000. Leaders of other local nonprofits are generally lucky to draw a third as much as Broome.
Just since January, Broome told SN&R, he’s turned down three opportunities to leave.
“I’m the top guy in the country,” Broome said of his economic development prowess. “I get called all the time.”
In a more-than 20-year career in his field, spanning from the Midwest to Phoenix to Sacramento, Broome has seemingly never lacked for confidence or the ability to bullishly pursue his own vision of things.
A 2003 Chicago Tribune profile noted that, at economic development outlet Southwest Michigan First, a sign taped to Broome’s office door read, “Bull, China Shop.” A few years later, after Broome went to Phoenix, Craig Harris of the Arizona Republic reported that the newcomer had “ruffled feathers with a brash, no-nonsense style.”
“He’s quick to criticize those who should be partners, like the state Department of Commerce, and his secretary reminds him before meetings that he needs to let others talk,” Harris wrote.
Sometimes, Broome’s style has seemed to cost him. After he arrived in Sacramento in 2015, he helped merge the newly-created GSEC with the 40-year-old Sacramento Area Commerce and Trade Organization. As part of the merger, approximately seven SACTO staffers went to GSEC. All have since departed, said past SACTO executive and GSEC vice president Bob Burris.
Burris described Broome as “very hard-driving. Expected a lot … from his employees and kind of was someone that expected full attention and that he was really the face of the organization.”
Burris, who said he’d been No. 2 at SACTO for a decade, lasted only a few months at GSEC before departing to form his own economic development organization.
“When a CEO comes in and [it’s] someone that’s not necessarily from the region or California, it kind of makes your head pop up and say, ‘Maybe I should be doing something a little bit different,'” said Burris, now president and CEO of Solano EDC.
Another former employee, who didn’t want their name used, said GSEC has had high turnover.
“There were internal pressures,” the former employee said. “But I think externally there were a lot of pressures as well, just because if you do something wrong, or something goes bad and you’re in the public eye, you have the potential that the organization will be defunded. I think just in general, it was like a pretty high-pressure environment.”
Both the public and private sector have a stake in GSEC, with its board offering a mix of public officials and business executives who helped found the group, such as former McClatchy CEO Pat Talamantes, auto dealer Roger Niello and developer Kyriakos Tsakopoulos.
Board members pay $100,000 annually for seats. And the public representatives don’t get a discount, said the former employee, who estimated the current split for public-private support of GSEC at 50-50.
There has been no shortage, incidentally, of local companies and governments willing to pay for seats, with 59 board members listed in GSEC’s Form 990 for the 2016-17 fiscal year and the organization having $11.7 million in net assets. Revenue included $916,000 in governmental grants.
The money goes to fund operations and a local staff of 15 people doing marketing, communications and analytics. Meanwhile, the board seems to serve a largely symbolic purpose.
“In all honesty, it’s not like there was a lot of voting or anything like that,” said Gary Bradus, one of three former SACTO board members who served negotiated terms on GSEC’s board. “In my mind, it was almost more kind of just [GSEC] letting everybody know what’s going on.”
Broome said he doesn’t look to build consensus.
“I always got people a little upset with me on my board,” Broome said. “When they call me, like, ‘Why are you doing this or why are you doing that?'—which is not often, but they do—it’s just like, ‘Go get your business plan.’ We build business plans, we build metrics and then we execute the business plan.”
The approach differs from that of predecessor organization, SACTO. Barbara Hayes, who served as president and CEO of SACTO for 14 years, said her former organization had many big wins. This included helping land regional locations for companies like Apple, Intel, Siemens and Kikkoman.
“I think SACTO got great credit for what it did,” said Hayes, who earned less than half as much annually as Broome does now. “And really, that wasn’t the important part. The important part was just the success. We weren’t really getting into it for getting out front and getting credit and standing on the center stage.”
A GSEC staffer said the organization has helped bring 46 companies, $470 million in generated payroll and approximately 6,500 jobs to the region.
But its list of big-name successes is small thus far. Some of its highest-profile efforts, aside from Amazon, have been a 32-page spread that GSEC paid to run last year in American Airlines’ inflight magazine on the Northern California megaregion and helping recruit medical supply giant McKesson to build a distribution facility in Roseville.
GSEC remains powerful, nevertheless, with Broome saying he talks with Mayor Steinberg twice a week and that they meet for coffee every two weeks. The mayor speaks of Broome as a close ally.
“He has had my back and continues to, and it’s a partnership that I view as vital to the city,” Steinberg said.
Steinberg said Sacramento is close to locating its first Fortune 100 company headquarters, Centene, guaranteeing 5,000 new jobs. The mayor said that while he, Councilwoman Angelique Ashby and city staff negotiated incentives with Centene, Broome “made the first overtures” to the firm.
In general, the mayor supports public-private partnerships.
“Government cannot and should not do it alone,” Steinberg said. “It is about harnessing the best of the public sector and the best of the private sector to create more jobs, to build more housing, to create more opportunities for young people in our neighborhoods and tackle the myriad of challenges that we face in our city. And I think Barry and GSEC have been a game-changer here.”
There’s a question of transparency and how much oversight the public really has with GSEC and other public-private partnerships. While these groups have publicly available board minutes and tax forms, former Metro Chamber CEO Peter Tateishi said the forms can lag as much as two years with IRS extensions.
Janelle Scott, a UC Berkeley professor who’s studied public-private partnerships in education, said lack of transparency can be by design.
“Fundamentally, many of the partnerships arose out of the idea that they didn’t want centralized oversight,” Scott said.
Other nearby public-private partnerships have drawn scrutiny for their secrecy. In June, Placer County’s grand jury cited a nonprofit run by city leaders, the Roseville Community Development Corporation, as essentially being a privatized wing of a public entity and having spotty bookkeeping.
“The public does not know the full extent of city resources that are being devoted to RCDC,” the grand jury noted.
Shutting the public out has its drawbacks, though. Newsha Ajami, director of urban water policy at Stanford University, said equitability in public-private partnerships helps keep the public from assuming too much risk.
“For the ones that end up being problematic, that’s what often happens,” Ajami said. “That’s why it’s very important to make sure these contracts are negotiated strategically and fair to all parties [involved].”
For better or worse, though, GSEC seems to be Broome’s show. If his close associates have concerns, they aren’t voicing them publicly. Broome envisions a 10-year run in Sacramento.
“Right now, all these investors are re-upping their investment,” Broome said. “And they’re doing it on the condition I stay the CEO.”