Foon Rhee

Region Business plays to win in Sacramento politics

Region Business is pushing for the Capital SouthEast Connector, which would link Elk Grove and El Dorado Hills through a swath of undeveloped land in Sacramento County.
Region Business is pushing for the Capital SouthEast Connector, which would link Elk Grove and El Dorado Hills through a swath of undeveloped land in Sacramento County. Sacramento Bee file

There’s no denying that Region Business is a growing force in Sacramento politics. It vows to be a zealous advocate and proclaims it is the largest funder of local campaigns.

Nothing wrong with that. We need pro-business groups to balance the power of labor unions.

But a growing number of elected officials complain, mostly in private, about the bare-knuckled tactics of Region Business and of its CEO, Joshua Wood.

Wood makes no apologies about his aggressive approach. To get big things done, he told me, “once in a while, you rub somebody the wrong way. That’s what it takes to push forward.”

The grumbling came up again when Sacramento County leaders took a big step toward putting a half-cent sales tax for transportation on the November ballot. After delicate negotiations, a deal on how $3.6 billion would be spent over 30 years headed for the Sacramento Transportation Authority board on April 28.

The day before, board members received a strident email from Wood objecting to a “poison pill” in the spending plan. He warned that the provision could stall funding for new roads, including the proposed Capital SouthEast Connector between Elk Grove and El Dorado Hills. That project, a priority for builders, would ease commutes by creating an alternative to Highways 50 and 99, but would also open up a huge swath of Sacramento County to development.

Since polls show the tax measure barely getting the two-thirds vote needed to pass and any organized opposition could kill it, some saw the email as a threat.

Wood says it wasn’t meant that way, but only to avoid a measure “set up to fail” with voters. Eventually, the wording was softened enough for Region Business to support the plan, and it passed. Still, raw feelings remain.

The next big push by Region Business could upset the apple cart again. It is advocating an expansion of the Sacramento Convention Center of 1 million square feet – far bigger than what is being considered by City Hall in conjunction with a long overdue renovation of the nearby Community Center Theater.

Wood says Region Business wants to make deals, but from the strongest negotiating position possible. He also says his group isn’t trying to step on the toes of other business lobbies in town, namely the Sacramento Metro Chamber.

Chamber CEO Peter Tateishi says he isn’t threatened. “We have no issue with Region Business coming on to the scene,” he told me.

Wood’s group started as Region Builders, a trade association of contractors, developers and construction interests. Last October, it rebranded as Region Business and broadened its mission to advocate for a wide range of industries.

It did so after weighing in during last year’s debate on raising Sacramento’s minimum wage. It helped restaurants that wanted to avoid paying higher wages to staff earning at least $15 an hour counting tips. That controversial provision was ultimately left out when the City Council approved increasing the wage to $12.50 in 2020. That deal has been overtaken by the statewide increase to $15 by 2022.

City Councilman Jay Schenirer, who led the minimum wage task force on which Wood also served, says Wood was willing to compromise, supporting a credit for businesses that help employees pay for health insurance.

While he doesn’t always agree with him, Schenirer calls Wood a “very smart guy.” “He’s evolved and matured in the way he approaches things,” Schenirer told me.

When I first met Wood during the debate over a new Kings arena, he struck me as earnest and ambitious. He helped Mayor Kevin Johnson in several roles, and in 2013 he helped unmask Seattle billionaire Chris Hansen as the money man behind a petition drive to force a public vote and scuttle the arena deal.

In the wake of that win, Wood, then just 31, was celebrated as a success story, a former Sacramento State student body president and rising political operative who welcomed the nickname the “smiling assassin.”

His targets aren’t often smiling afterwards.

In 2013, Sacramento County supervisors debated Cordova Hills, a proposed 2,700-acre development that is the definition of suburban sprawl. Wood tried to silence the Sacramento Area Council of Governments after Mike McKeever, its executive director, warned supervisors that Cordova Hills would violate the Blueprint smart growth strategy.

And when West Sacramento Mayor Christopher Cabaldon strongly defended SACOG and the Blueprint, Wood’s group hired a lawyer who threatened a lawsuit. Cabaldon now says that was “an empty threat” and “intimidation tactic” that didn’t work.

While such an adversarial approach might work in the short term, Cabaldon says, it “deeply erodes” the ability of the region to work together.

Wood says any “spirited debates” he’s had with officials weren’t personal. Maybe so, but in local politics, people often have long memories.

That’s one reason why Wood’s support for the SouthEast Connector raised eyebrows – it would go right by Cordova Hills. SACOG’s transportation plan calls for not building that part of the connector in the next 20 years.

Another reason for suspicion of Region Business is its murky finances. While it must disclose donors to its political action committees, the group formed as a 501(c)(6) under the federal tax code, so it doesn’t have to identify those who fund its operations.

Wood says it plans to release a roster of its members later this year. But it still won’t disclose funders, partly because some want to stay private, but also, Wood says, to avoid rival groups hitting up its big donors.

With ample funding, Region Business wants to be a big player in local campaigns – like this year’s Sacramento mayor’s race.

Wood is close with Johnson and was a lead consultant on the failed 2014 strong-mayor ballot measure. When Johnson decided not to seek a third term, Region Business quickly endorsed former state Senate leader Darrell Steinberg before he even officially announced. Since, it has given Steinberg the maximum $11,000 allowed and is helping to fund independent expenditure committees supporting him.

But other business groups are backing City Councilwoman Angelique Ashby, including the Sacramento Regional Builders Exchange, from which Region Business split in 2012. Tateishi is the exchange’s former executive director and is now CEO of the chamber, whose PAC is also supporting Ashby and is engaging in hardball tactics of its own.

Since many groups are behind Steinberg, the favorite to win, the real test for Region Business on June 7 is in the District 4 Sacramento County supervisor’s race. In the field of five candidates, it’s backing a former board member, architect Michael Kozlowski, with an independent expenditure campaign nearing $100,000.

We’ll see how influential Regional Business is in this election, but Wood says his approach is working so far.

If you don’t play nice, however, there may come a time when politicians won’t listen, no matter how much money you have.