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HomeMy WebLinkAboutED Economic Development Strategic Plan PPTECONOMIC DEVELOPMENT STRATEGIC PLAN El Segundo, CA TEL: 424-297-1070 | URL: www.kosmont.com CITY OF SAN RAFAEL ECONOMIC DEVELOPMENT STRATEGIC PLAN SUMMARY PRESENTATION TO CITY COUNCIL May 15, 2023 ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 2 BACKGROUND Kosmont Companies ("Kosmont") was retained by the City of San Rafael (“City”) to prepare this Economic Development Strategic Plan (“EDSP”). The EDSP addresses existing economic conditions, regional real estate trends and opportunities and provides tactical recommendations on business attraction, expansion, and retention through place-making recommendations and community feedback. Given shifting consumer preferences and changes in land use, uncertain economic realities, it is imperative that San Rafael identify opportunities within the City to spur development and increase revenues. The EDSP includes an assessment of economic / market conditions, an assessment of key commercial districts and sites, as well as insights from community / stakeholder outreach. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 3 VISION AND OBJECTIVES Vision: The EDSP is designed to help strengthen the local economic base and fiscal health of the City;provide a wide range of employment and educational opportunities for its residents;enable the City to leverage State and Federal grants,loans and policy tools;and achieve greater resiliency in light of the Covid-19 pandemic. Core Objectives: 1.Increase fiscal revenue; 2.Enhance City’s commercial and residential market by attracting a healthy balance of local and national businesses and developing a wide range of housing options; 3.Enhance employment,educational and business opportunities; 4.Create job opportunities for younger generations; 5.Fund critical physical improvements to infrastructure . ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 4 GOALS & CHALLENGES The City has identified several challenges: Restore Downtown’s economic vibrancy Maintain/expand industrial and office job opportunities Capitalize on the access to SF,east Bay and Wine Country Absentee /nonresponsive landlords Goals to be addressed as part of long-term planning efforts: Economic recovery from Covid impacts Sustainability /Climate Change Racial Equality Housing /Homelessness Neighborhood Vitality Improve Public Safety Provide more Public Assets ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 5 ECONOMIC OVERVIEW The City retained Kosmont to prepare the EDSP to develop a strategy that better positions San Rafael to face the economic forces that are reshaping the modern economy: Today’s consumers are using online websites for purchasing a broad array of goods. As e-commerce continues to take an increasing percentage of consumer spending, cities must take new approaches to land use that explore concepts for public amenities and private attractions that help cities capture trips and thus “sales”. Younger consumers, with increased use of media and digital communication, seek gathering places with restaurants, entertainment venues and experiential retail, rather than simply a collection of traditional store fronts. Telework dynamics have drastically changed work patterns over the past few years and are poised to reshape office needs. Creative class professionals are attracted to communities with clustered centers, which provide a sense of vitality, diversity, convenience and a mix of work, entertainment, services, arts and culture. Kosmont is assisting the City in achieving its economic objective by providing strategies, market analysis and recommendation –both citywide, as well as focused on particular commercial districts in the City. The goal is to foster economic vitality throughout the business districts of San Rafael, improving business conditions and resident quality of life. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 6 DEMOGRAPHIC OVERVIEW San Rafael has a population of ~61,500, with ~8% growth over the past 20 years Average Household Size is 2.6 persons, and the Median Age is 42.3 years; residents are well educated, with ~57% achieving at least a bachelors degree City Average Household Income is $164,800, approx. ~14% less than County and 27% higher than statewide levels San Rafael sees a Net Inflow of ~14,300 jobs, with workers coming from San Rafael, Novato, San Francisco, and Petaluma Jobs in the City are primarily in the Healthcare / Social Assistance, Retail Trade, Construction, and Professional / Scientific / Technical Services sectors Residents of the City are primarily employed in the Health Care / Social Assistance, Professional / Scientific / Technical Services, Accommodation / Food Services, and Retail Trade sectors. Note: Additional demographic data / analysis is available in Appendix Source: ESRI BAO, Census Bureau OnTheMap, California Department of Finance ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 7 FISCAL & BUDGET OVERVIEW The city receives ~89% of its General Fund revenue from taxes. The majority (52%) of City tax revenue comes from sales taxes, and ~37% from property taxes. The remainder comes from franchise, business, and transient occupancy taxes. Sales tax revenues have grown ~7% annually since 2012, driven by Measure E and Measure R rate increases and dramatic growth in county pool revenues. Property taxes have grown ~7% annually since 2012, with assessed value growth driven by high real estate values and mark-to-market reassessments. San Rafael collects an estimated 12.2% of the 1% Property Tax general levy. Source: San Rafael 2022-23 Proposed Budget, 2022 ACFR FY2022-23 Budget Property Taxes $ 24,409,721 Property Tax -VLF Backfill 6,700,000 Sales Tax 25,085,742 Sales Tax -Measure E 14,694,975 Sales Tax -Measure R 4,898,325 Franchise Tax 4,182,016 Business Tax 2,669,567 Transient Occupancy Tax 2,483,067 Taxes Subtotal 85,123,413 Revenues from Other Agencies CSA #19 Fire Service 2,442,513 Other Agencies 1,903,252 Other Permits & Licenses 3,010,159 Fine & Forfeiture 186,732 Interest & Rents 47,500 Charges for Services 2,568,965 Other Revenue 588,196 Total 95,870,730Note: Additional fiscal data / analysis is available in Appendix ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 8 MARKET OVERVIEW San Rafael saw limited growth in commercial, industrial, and apartment markets over the past decade. Commercial real estate rents and occupancy have been fairly stable over the past 10 years. The retail market is facing challenges as e-commerce reshapes consumer preferences –straining demand for regional shopping centers as well as downtown retail districts The office market is also undergoing changes as telework restructures employer needs and commute patterns –reshaping downtown business districts and office parks The industrial market is strong, driven by high demand for logistics / warehouse; San Rafael serves as the industrial heart of Marin with a large amount of construction / building spaces; strong demand for R&D / lab space in Bay Area could be increase demand in San Rafael The multifamily residential market continues to see high demand due to the housing shortage in California While San Rafael only represents less than 25% of Marin County’s population, the City represents a much more significant share of Marin County economic activity: •Retail: 38% of inventory, rents are 12% lower and vacancy is 0.2% lower •Office: 43% of inventory, rents are 3% lower and vacancy is 3.4% lower •Industrial: 62% of inventory, rents are 2% higher and vacancy is 2.9% lower •Flex / R&D: 32% of inventory, rents are 5% lower and vacancy is 1.1% lower •Multifamily: 40% of inventory, rents are 16% lower and vacancy is 0.3% lower Note: Additional market data / analysis is available in Appendix ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 9 ECONOMIC DEVELOPMENT STRATEGIES The following section prioritizes strategies for the City to consider to achieve the economic goals.Action Items for each strategy are identified,as well as responsible organization.An estimated investment range for each strategy is identified below,recognizing that the City has $300,000 per year currently available for Economic Development programs,in addition to the two professional staff members. 1.Support Business /Development ($$$) 2.Downtown Reimagination ($$$) 3.Analyze Implementation of Enhanced Infrastructure Financing District (EIFD)($) 4.Strengthen Local Partnerships ($) 5.Attract High-Tech Industrial Uses ($) 6.Outreach for Private and Business Development Opportunities ($$) 7.Workforce Development Programs ($$) $=$50,000 to $200,000 $$=$200,000 to 500,000 $$$=$500,000 to $750,000 Estimated new annual investment of $500,000 is needed to implement the Economic Development Strategies over next 3-5 years ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 10 STRATEGY 1: SUPPORT BUSINESS / DEVELOPMENT City Economic Development –Cost $$$ Business-friendliness is a vital component to support the needs of businesses, developers and to foster entrepreneurship in the City, bolstering the local economy. Action Item 1.1: Create a Business Expansion, Attraction, and Retention (BEAR) program. Modify existing economic development program to provide enhanced customer service to support business development. Action Item 1.2:Develop or sponsor technical assistance programs to support emerging businesses/entrepreneurs living or doing business in San Rafael’s designated Opportunity Zone. Action Item 1.3:Maintain enhanced business and development data analytics to track economic and market trends. Action Item 1.4: Increase bi-lingual staffing with cultural and language capacity to support and enhance access to business development programs. Action Item 1.5: Sponsor “Shark Tank” type competition and other networking events to promote new entrepreneurial ideas and bolster the local entrepreneur network. The Economic Trends section identifies key aspects to fostering entrepreneurship in a community, and the Case Study section highlights approaches that the City of Thousand Oaks and the City of Corona took to foster entrepreneurship in their communities. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 11 STRATEGY 2: DOWNTOWN REIMAGINATION City Economic Development –Cost $$$ Activating Fourth Street is the key for successful downtown revitalization in San Rafael. Action Item 2.1:Consider programs that can help existing businesses thrive (such as façade improvement programs,streetery / outdoor retail)and help existing properties utilize their space (such as expanding allowable uses in storefront spaces,sales tax in-lieu payment for non-retail uses,etc).Prioritize program implementation to Opportunity Zones and under-invested commercial areas in the City. Action Item 2.2:Explore conversion or expansion of the Business Based Improvement District to a Property Based District to support enhanced cleaning,security,marketing and physical improvements in downtown.(revenue generating /funding capacity) Action Item 2.3:Evaluate publicly-owned opportunity sites in the downtown area –such as the surface parking lots and parking garages –to evaluate potential reuse strategies that aim to add gathering places,activities,and other amenities. As shown in Trends /Case Studies,property owners are exploring new uses and programming to activate underutilized parking lots, ranging from short-term temporary reuses for special events to semi-permanent reuses that provide spaces for people to gather.The Real Estate Strategies Toolkit section identifies key aspects of real estate strategies as well as an overview of potential publicly-owned opportunity sites,such as under-utilized parking properties. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 12 DOWNTOWN REIMAGINATION -CONTINUED Action Item 2.4:Invest in physical improvements that can create sense of place and further activate the downtown area—through pedestrian-oriented improvements such as plazas and outdoor spaces,water features,running/walking paths,street improvements, sidewalks,transit /micro-transit services,and pedestrian malls. Action Item 2.5:Invest in other enhancements such as gateway signage and wayfinding,public art,thematic street and sidewalk enhancements,and public open space . Action Item 2.6:Grow social media engagement channels,social medial influencer/engagement channels,as well as marketing/trade publications to promote Downtown businesses and events. Pedestrian mall and related case studies explain how pedestrian-oriented improvements,events,and other placemaking strategies / interventions are used to drive activity and engagement in downtown areas –improving the experience for residents and visitors and bolstering the local economy. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 13 STRATEGY 3: ANALYZE IMPLEMENTATION OF EIFD City Economic Development –Cost $ Enhanced Infrastructure Financing Districts are a type of tax increment financing district that allows local governments to capture new assessed value creation and finance public projects (such as infrastructure,affordable housing)using property tax revenue from new development. Action Item 3.1:Conduct feasibility analysis,develop plan for district formation. Action Item 3.2:Work with Marin County to identify mutually beneficial investments to encourage sharing of a portion of County tax increment.(revenue generating /funding capacity) Action Item 3.3:Pursue grants that align with goals of the district,particularly those that give preference to EIFDs –Infill Infrastructure Grants,Affordable Housing and Sustainable Communities Grants,and Transformative Climate Communities grants. (revenue generating /funding capacity) As explained in the Economic Toolkit section below,EIFDs may be well suited for San Rafael’s opportunity areas such as Northgate that have significant infrastructure needs (roads /connectivity,water /sewer,electricity,telecom /broadband).These districts are being utilized by communities across California to induce private sector investment,accelerate growth,create jobs,grow fiscal revenues and capture value . ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 14 STRATEGY 4: STRENGTHEN LOCAL PARTNERSHIPS City Economic Development –Cost $ Local organizations such as the Chamber of Commerce,Canal Alliance,and Downtown BID are important partners to improve theeconomicenvironmentforallareasoftheCity.By strengthening these partnerships,the City will develop a greater capacity to pursueeconomicdevelopmentinitiativesandfacilitatecooperation/collaboration across public,private,and non-profit entities. Action Item 4.1:Explore the formation of a Countywide Tourism Improvement District or increasing the San Rafael TransientOccupancyTaxorothertourismfundingmodeltosupporttourismmarketingandincreasetourismsectorgrowth.(revenuegenerating/funding capacity) Action Item 4.2:Evaluate current list of community events &programming (e .g.,Dining Under the Lights,Block Parties, festivals/cultural events,outdoor athletic events,live music/concerts,performing arts,etc .).Expand special events in Canal,Terra LindaandDowntownarea–such as block parties,public markets,outdoor dining,outdoor music /movies,and other events. Action Item 4.3: Establish partnerships and leverage cross promotional opportunities between City, Marin County, business owners, and other organizations. Regional marketing is a more cost-efficient way to attract new industry and encourage visitors to use Marin County as a base for regional tourism. Action Item 4.4: Pursue tourism marketing, San Rafael as a gateway to the Mendocino Coast and Sonoma/Napa Valley wine country. Action Item 4.5: Coordinate with arts organizations to integrate arts programming with events and economic development initiatives, building upon the Cultural Arts District designation. Action Item 4.6: Collaborate with service organizations such as Canal Alliance to support programs that address workforce development, entrepreneurship, and economic resiliency. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 15 STRATEGY 5: ATTRACT HIGH-TECH INDUSTRIAL USES City Economic Development –Cost $ As shown by the success of BioMarin,San Rafael is well positioned to attract bio-tech and other high-tech industrial businesses.LifeSciencesareoneofthekeyexpandingeconomicclustersinMarinCounty,driven by the flourishing tech economy of the greater BayArea. Action Item 5.1:Revise industrial zoning restrictions and entitlement policies/processes to ensure that they facilitate new industrial uses. Action Item 5.2:Pursue new sectors that can expand the breadth and variety of its industrial core and jobs base .Potential growthopportunitiesincludebiotechnology,research and development,and e-commerce fulfillment. Action Item 5.3:Identify target areas for tech industrial development (e .g.Smith Ranch,Canal)and consider overlay zoning to facilitatedevelopment. Action Item 5.4: Conduct outreach to existing businesses, develop relationships with industry groups to foster collaboration, and identify / address business feasibility issues (infrastructure, procedural, etc.). The Strategic Land Use Policies Toolkit section identifies key aspects to revising zoning and entitlement processes to facilitate desired development activity. Economic Trends section identifies key aspects to promoting biotech and life sciences businesses (such as access to necessary infrastructure, local tax / administrative policy, and availability of housing and transit).The Case Study highlights the approach that the City of San Diego took to advance the biotech sector in the La Jolla area of the City. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 16 STRATEGY 6: OUTREACH FOR PRIVATE AND BUSINESS DEVELOPMENT OPPORTUNITIES City Economic Development –Cost $$Proactively work with property-owners to understand challenges and opportunities that may align with the City’seconomicdevelopmentgoals.Action Item 6.1:Identify and analyze key privately-owned sites that are well-positioned for reuse or redevelopment. Action Item 6.2: Conduct outreach and collaborate with property owners to explore development opportunities and address challenges that can bring new uses to privately-owned sites. Action Item 6.3: Pursue businesses and developers, in coordination with property owners. Action Item 6.4: Increase Cannabis business opportunities through release of new cannabis licenses and creation of cannabis specific business programs targeting growth and capacity building of existing permittees. Business opportunities should include exploration of retail storefront cannabis licenses and other State allowed business types in appropriate commercial locations. (revenue generating / funding capacity) Action Item 6.5: Mobile Vendor Ordinance Update: Update the City’s Mobile Vender Ordinance to create a legal pathway for mobile vending in appropriate commercial locations. Utilize community partners with language and cultural capacity for vendor outreach and permitting technical support. The Real Estate Strategies Toolkit section identifies key aspects of real estate strategies as well as an overview of potential privately-owned opportunity sites, such as the Smith Ranch movie theater site and the Marin Square shopping center site. ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 17 STRATEGY 7: WORKFORCE DEVELOPMENT PROGRAMS City Economic Development –Cost $$ Expand Workforce Development programs to help local residents gain access to career pathways –setting low-income workers on a path to higher wage careers,improving their economic situations and also helping area businesses gain access to a higher-quality pipeline of talent. Action Item 7.1:Coordinate with Workforce Alliance of the Northbay,Dominican University,local school /community college districts,the Chamber of Commerce,Canal Alliance,and other area nonprofit organizations to encourage collaboration with local/regional educational and workforce-development organizations for training,mentorship,and job placement programs. Action Item 7.2:Conduct outreach to local businesses to assess skills gaps and other issues with finding workers,and conduct outreach to local aid organizations to better understand barriers that impact workforce readiness (such as language,childcare,transit, and internet accessibility). ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 18 PERFORMANCE METRICS Performance metrics will allow the City to identify progress made and determine what barriers to economic development continue to exist,what responses have proven successful or otherwise,and which projects are scheduled for development.The following metrics are recommended to be measured each calendar year and compared to the prior year’s results: 1.BEAR Program Participation –Track number of BEAR program participants,investment captured,and jobs created 2.Annual Reports on EIFD Funding –identify the revenues received and specify the planned investments 3.Commercial Building Permits in Key Areas –measure commercial developer interest 4.Assessed Value of Commercial and Industrial Property –show increased private sector investment 5.Number and Type of Business Licenses –measure new business formations 6.Employment by Industry –show success in commercial and industrial business attraction and employment growth 7.Sales Tax Revenues by Geographic District –measure success in attracting businesses and economic activity 8.Hotel Tax Revenues –measure success in attracting more visitors 9.Hotel Visitor Survey –identify types of visitors,short term vs longer term stays 10.Annual Survey of Business Owners –identify issues regarding City permitting /zoning process and other programs toinformCitystaffofprogress/shortcomings 11.Special Event Data:number of events,attendance estimates –show success of community outreach efforts,revitalization efforts,and general marketing ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 19 1: Support Business / Development #Action Item Cost Workload Timeframe 1.1 BEAR Program $Year 1 1.2 Technical Assistance Programs $Year 2 1.3 Business / Development Data $Ongoing 1.4 Bi-lingual Staff $$$$Ongoing 1.5 Entrepreneurial Events $$Year 1 2: Downtown Reimagination #Action Item Cost Workload Timeframe 2.1 Business Programs $$$Year 3 -4 2.2* Explore conversion of the BBID to a PBID $Year 1 2.3 Evaluate publicly- owned sites for reuse $Year 2-3 2.4 Placemaking physical improvements $$$$Year 3-5 2.5 Other physical enhancements $$$Year 3-5 2.6 Marketing / social media $Ongoing 3: Analyze Implementation of EIFD #Action Item Cost Workload Timeframe 3.1 Feasibility analysis / plan $Q1-Q3 3.2*Explore County Partnership $Year 1-2 3.3*Pursue Grants $Ongoing ACTION ITEM RESOURCES Estimated Workload During Timeframe 10-20% of employee workload 20-40% of employee workload 40-60% of employee workload 60-100% of employee workload Star (*) -items that generate revenue / funding capacity Estimated Cost thru Year 5 $<$50,000 $ $$50,000 to $150,000 $ $ $$150,000 to $300,000 $ $ $ $>$300,000 Cost does not include allocation of current Econ Dev staff salaries ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 20 4: Strengthen Local Partnerships #Action Item Cost Workload Timeframe 4.1*Explore tourism funding models $Year 1-2 4.2 Explore / expand events and programming $$$Year 1-3 4.3 Marketing partnerships $Year 1 4.4 Tourism marketing $Year 1 4.5 Arts programming $Year 1 4.6 Collaborate with service organizations $Year 2 5: Attract High-tech Industrial Uses #Action Item Cost Workload Timeframe 5.1 Revise zoning / processes for industrial uses $$Year 3-5 5.2 Pursue new industrial sectors $Year 1-2 5.3 Evaluate tech industrial overlay zoning $$Year 2 5.4 Conduct outreach businesses, industry grps $Year 1-2 6: Outreach for Private / Business Development Opportunities #Action Item Cost Workload Timeframe 6.1 Identify / analyze sites for reuse $Year 1-2 6.2 Outreach / collaborate with property owners $Year 1-2 6.3 Pursue businesses / developers $Year 2 6.4*Cannabis business opportunities $$Year 2-3 6.5 Update Mobile Vender Ordinance $$Year 2-3 7: Workforce Development Programs #Action Item Cost Workload Timeframe 7.1 Coordinate with orgs. for workforce development $Year 3-5 7.2 Conduct outreach to local businesses / orgs.$Tear 3-5 ACTION ITEM RESOURCES Estimated Workload During Timeframe 10-20% of employee workload 20-40% of employee workload 40-60% of employee workload 60-100% of employee workload Star (*) -items that generate revenue / funding capacity Estimated Cost thru Year 5 $<$50,000 $ $$50,000 to $150,000 $ $ $$150,000 to $300,000 $ $ $ $>$300,000 Cost does not include allocation of current Econ Dev staff salaries ECONOMIC DEVELOPMENT STRATEGIC PLAN KOSMONT COMPANIES | 21 THANK YOU. QUESTIONS?