City of San Carlos - EDAC Staff Report - Economic Development Priorities - July 9, 2012

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EDAC Staff Report -Economic Development Priorities - July 9, 2012 City Council Staff Report

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City of San Carlos
City Council Staff Report

COUNCIL/SUCCESSOR AGENCY MEETING DATE: July 9, 2012

ITEM TITLE: Consideration of Economic Development Plan Progress Report and
Identification of Priorities for Fiscal Year 2012/13

RECOMMENDATION
The Economic Development Advisory Commission and staff recommend that City Council
receive this progress report on the Economic Development Plan for 2010-13 and affirm the
action step priorities identified for Fiscal Year 2012/13.

FISCAL IMPLICATIONS
There is no fiscal impact for this report.
Economic development activities had been funded by the former Redevelopment Agency until it
was dissolved on February 1, 2012. Implementation activities, contracts with vendors and
consultants, and City staff now require General Fund budget resources. Successful
implementation of the Plan can have a substantial General Fund impact by generating
economic activity that drives sales, property and hotel tax revenues, as well as business
license, planning and building fees.

BACKGROUND
In 2007, the City Council adopted an initial Economic Development Plan after a community
workshop and EDAC review and recommendation (Attachment 1). That Plan identified 5 topic
areas and 21 Objectives to achieve over three years. Council set the following as the City’s
priority objectives:

1. Activate the former Bell Market Site (current Bianchini’s)
2. Utilize SamTrans Development as Catalyst Site (Transit Village)
3. Activate Wheeler Plaza
4. Develop Landmark Hotel
5. Recruit Large to Mid Plate Retail

In 2010, the Council adopted a second three-year Economic Development Plan for 2010-13
(Attachment 2), re-designed as a comprehensive set of economic development initiatives,
including 21 action steps, organized into the following major categories:

A. Strategic Planning and Analysis
B. Implementation
    1. Branding/Marketing Campaign
    2. Business Retention and Expansion Strategy
    3. Business Attraction Strategy
C. Evaluation

This report is the second annual evaluation of progress on the current ED Plan for 2010-13. At
its June 26, 2012 meeting, the Economic Development Advisory Commission reviewed the
progress report and identified priority action steps for Fiscal Year 2012/13.
 
ANALYSIS
Goal Measurement
There are two sets of metrics that were established for quantifying progress on economic
development: one set was adopted in 2008 during evaluation of the prior ED Plan and the other
set was adopted with the 2010-13 Plan. Following are brief descriptions and results for each set
of metrics. For more detail, please see Attachments 3 and 4.
 2008 Goals:  Results:
 Sales Tax - exceed by 1% the growth in County-wide sales tax receipts  Exceeded the County growth rate by 1% in only one of the last four fiscal years (FY09). However, on a cumulative basis, the City has exceeeded the County by 5% after four years.
 Property Value - exceed by 1% the growth in County-wide assessed property value  Exceeded the County growth rate by 1% in two of the last four years (FY10 and FY11). On a cumulative basis, the City has exceeded the County by 2% after four years.
 TOT - add 150 hotel rooms and increase revenue by $400,000 over FY 07 base  There has been no new hotel development and TOT revenue has increased by $145,000.

2010 Goal:   Results:
 Increase revenue from sales tax, property tax and TOT by a combined $3.5 million, plus 3% inflation, by FY13 (stretch goal) and FY15 (target goal)  After two fiscal years, revenue from sales tax, property tax, and TOT combined has increased $1.5 million. The stretch goal is no longer achievable, but the target goal is still possible will aggregate annual revenue growth of 5.3% over the next 3 years.

Progress Report on ED Plan 2010-13 Action Steps

The Economic Development Plan for 2010-13 includes 21 Action Steps organized into six categories and subcategories. Following is an outline of the Plan steps, including two additional action steps recently identified by EDAC. Detailed descriptions of these actions steps can be found in the adopted ED Plan provided in Attachment 2. Brief descriptions of the action steps and the current status on each of the items can be found in Attachment 5. 

A. Strategic Planning and Analysis
    1. Sales Tax Leakage Analysis/Updates
    2. Sites Fiscal Analysis/Updates
    3. Finalize/Revise Marketing Strategy
    4. [New] Identify Alternative Funding Sources in Post-RDA Environment
    5. [New] Develop and Implement a Plan to Use the Strategi Property Acquisition Reserve

B. Implementation
    1. Implement Branding/Marketing Campaign
    2. Implement Business Retention and Expansion Strategy
        a. Tools and Incentives
            i. Website Revisions and Updates
            ii. Co-Marketing Events & Materials
            iii. Coordinate with Regional and State ED Organizations
            iv. Small Business Development
            v. Facade Program
        b. Outreach
            i.   ED Partnership Outreach Events 
            ii.  Form Ambassador Team(s) 
            iii. Enhance “Development Services” orientation of Planning/Building Counter 
    3. Implement Business Attraction Strategy 
        a. Vacant/Underutilized Property Hot Sheet 
        b. Customized Recruitment Packages 
    4. Development Projects 
        a. Transit Village 
        b. Wheeler Plaza 
        c. Hotel and Other East Side Opportunity Sites 
        d. El Camino Corridor Opportunities

C. Evaluation
    1. Refinement of Goals/Metrics 
    2. Annual ED Survey 
    3. ED Plan Review and Reports to EDAC and Council

Progress has been made on many of the action steps although not within the original timeframes contemplated for a variety of reasons. In general, without an increase in dedicated staff resources for economic development activities and initiatives as envisioned by the 2010-13 Plan, and with new constraints on available funding, staff has been limited in its ability to make significant progress on multiple initiatives.

The following are Plan Action Steps with considerable but incomplete progress in the past year:

  •  (B.4.b) Wheeler Plaza – Significant activity including property acquisition, deal negotiations and site planning advanced the prospects for Wheeler Plaza development. An EIR was prepared and circulated for review. Final EIR adoption is anticipated by Fall 2012. Two properties acquired by the Redevelopment Agency need to be transferred at little or no cost for the project to be feasible. This requires approval by the Oversight Board and agreement among the taxing entities that would otherwise receive a distribution of sales proceeds.
  • (A.3, B.1, B.2.a.1, B.2.a.2, and B.3.b) Marketing Initiatives - A local design firm was engaged to complete a branding identity process and implement a marketing campaign, including design of marketing materials and ad copy. A new City “logo” and brand was selected. New banners with the City logo were designed and installed. Wearable items were also created with the logo. A Marketing Brochure and Community Profile sheet is being readied for printing. Dissolution of the RDA has eliminated the budget for a potential ad campaign and events to promote San Carlos shopping and businesses. 
  • (B.2.a.1) Website Revisions – A new branding “skin” was completed, while content navigation and tools are continuing to be updated and added. 
  • (A.2) Sites Fiscal Analysis – This project was only partially completed at the time the RDA was dissolved. By using GIS to map property tax and sales tax by geographic areas and land uses, staff can better focus retention and attraction efforts to where land is being highly utilized or underutilized.
Resetting Priorities

Due to limited funding options and staff resources, EDAC reviewed the ED Plan for 2010-13 and unanimously recommended prioritizing the following action steps for Fiscal Year 2012/13.
 
1. Wheeler Plaza Development (B.4.b)
2. Sites Fiscal Analysis/Updates (A.2)
3. Customized Recruitment Packages (B.3.b)
4. Ambassador Teams (B.2.b.2)
5. Strategic Property Acquisition Reserve (A.5)
6. Marketing Strategy – review, identify and take action on the next step (A.3)
7. Vacant/Underutilized Property Hot Sheet (B.3.a)

ALTERNATIVES:
  1. Receive progress report on the Economic Development Plan 2010-13 and affirm action step priorities for Fiscal Year 2012/13; or
  2. Do not receive progress report and affirm action step priorities; or
  3. Provide other direction to staff.