A downtown Fresno building vacated by the collapse of Bitwise Industries will not sit vacant, Mayor Jerry Dyer told GV Wire on Friday.
Dyer said during a City Hall job fair for hundreds of laid-off Bitwise employees, that there is hope for the State Center Warehouse at 747 R Street in downtown Fresno.
“I met with the CEO and founder (of the company that owns the building) and they are 100% committed to keeping that building, not selling that building, and filling it up with tenants throughout Fresno,” Dyer said. “We’re going to be working closely with the owner to make sure that that building doesn’t become vacant.”
Bitwise was in the process of moving into that building last month, when the company furloughed employees on May 29 and officially terminated them on June 14. A Mexican restaurant on the first floor is the only activity inside.
Building Owner Spotted in Fresno
Although Dyer would not reveal the name of the CEO, sources tell GV Wire that Grounded Capital CEO Stephen Hohenrieder was spotted examining the building Friday with one of his company’s attorneys.
Grounded Capital is the San Francisco venture capital firm associated with NICbyte LLC, a Texas firm in litigation with Bitwise and its affiliates over the building.
Last year, NICbyte and Wishon Row partnered to purchase the State Center Warehouse and four other buildings in Bakersfield and Oakland. NICbyte filed a lawsuit against Wishon Row/Bitwise last month, claiming the latter partner violated a contract by borrowing against the building, and then listing it for sale.
Bitwise leased its other three buildings in downtown Fresno, owned by Baltara Enterprises LP. Baltara placed a notice on the Fresno buildings that it will take back the buildings by Saturday if Bitwise does not settle its outstanding rent — said to be $500,000.
Baltara has said in the past that the move will not affect subtenants leasing from Bitwise.
Bitwise Files WARN Notice
On Wednesday, Bitwise filed its official layoff notice with several states, to comply with state and federal laws, known as the WARN Act.
While the state Economic Development Department confirmed receipt, the city has not received a copy, City Attorney Andrew Janz said.
The state act requires at least 60 days’ notice for layoffs at the scale Bitwise performed. Penalties include back pay and the cost of benefits for up to 60 days. There is also a $500 per day per employee penalty.
Enforcement takes place in the courts under a civil lawsuit. There are no criminal penalties. At least two separate lawsuits on behalf of former employees have been filed.
Dyer said there was no way the Bitwise downfall could have been prevented.
“I don’t know that anyone could have stopped the ultimate fate of Bitwise. Because really, from the outside looking in, I think there was a feeling from investors, even from their employees, that things were going well, only to find out that the entire business model was built on a house of cards and that deck crumbled,” Dyer said.
Hundreds Attend Job Fair
Up to 600 job seekers were expected to attend the job fair, Fresno Workforce Development Board executive director Blake Konczal said. More than 60 businesses set up tables, lining the perimeter of City Hall.
Dyer said the city helped organize the job fair “to turn something very evil into something very good.”
“It is an exciting day for the people of Fresno and to see everyone coming together to address what we know to be a tragedy in our city,” Dyer said.
Only a handful of those tables were for tech-related companies. Most were for government — several city departments were on hand — and health care.
Several Bitwise employees did not want to speak.
“It’s a very sensitive situation,” said one.
Konczal said he was happy with the turnout. Fresno WBD plans another job fair in July.
Bay Valley Tech is a Modesto-based tech training firm, similar to Bitwise-affiliate Geekwise.
CEO Phillip Lan says they are not looking to hire, but are offering free training, which could lead to $ 25-an-hour internships.
“Two months ago, when we found out Bitwise quit training software developers, we opened our program up down here. So so we’ve probably gotten 100 applicants in from Fresno and Merced in the last few weeks. And our program is completely free,” Lan said.
Bitwise’s collapse was “a surprise to some extent,” Lan said.
“They were obviously spending a lot of money … anytime you do that, there’s always a lot of risk,” Lan said.