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HomeMy WebLinkAbout2024-01-09 - AGENDA REPORTS - CONTR EXTENSION SCV ECONOMIC DEV CORPO Agenda Item: 8 1. CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL: TAA,/� DATE: January 9, 2024 SUBJECT: CONTRACT EXTENSION WITH THE SANTA CLARITA VALLEY ECONOMIC DEVELOPMENT CORPORATION DEPARTMENT: Community Development PRESENTER: Jason Crawford RECOMMENDED ACTION City Council: 1. Authorize expenditures for the renewal of support for the Santa Clarita Valley Economic Development Corporation for three consecutive Fiscal Years (FY 2024-25, FY 2025-26, FY 2026-27) in the amount of $240,000 annually. 2. Authorize the City Manager or his designee to negotiate and execute a three-year renewal agreement with the Santa Clarita Valley Economic Development Corporation, subject to City Attorney approval. BACKGROUND On November 10, 2009, the City Council approved an agreement between the City of Santa Clarita (City) and the Santa Clarita Valley Economic Development Corporation (SCVEDC) in the amount of $200,000 for initial start-up costs and the creation of a local economic development corporation. Subsequently, the City Council has consistently approved additional annual investments in the amount of $200,000. Beginning in 2013, the City Council authorized three-year commitments to provide the SCVEDC with financial certainty to strategically plan for the future. Since its inception, the SCVEDC has been instrumental in business attraction, business retention, job creation opportunities, and support for the local startup community. The SCVEDC focuses on target industries, including biomedical and medical devices, aerospace and defense, advanced manufacturing, digital media and entertainment, and information technology. Given its continuous success, the City has increased its contribution to the SCVEDC by $40,000, bringing the total annual investment to $240,000 beginning in FY 2023-24. The additional funding is Page 1 Packet Pg. 66 O intended to support SCVEDC's 2023 Futures Planning initiative, as well as increased efforts to support workforce development partnerships, including new data resources. The SCVEDC is funded by the City, the County of Los Angeles (County), and private industry. The County contributes $290,000 annually to the SCVEDC. In their annual report to the City Council on February 28, 2023, the SCVEDC included highlights of the noteworthy business attraction and expansion projects, such as: • DrinkPak, a premiere contract beverage manufacturer of aluminum canned beverages has continued to significantly grow, becoming one of the largest employers within the Santa Clarita Valley. • Vallarta Supermarkets, an American supermarket chain relocated its corporate headquarters to the Santa Clarita Valley, creating 220-250 new jobs. • Santa Clarita Studios and L.A. North Studios, a full -service film and television studio, expanded to add new soundstages. • Valencia Technologies, a neuromodulation medical device company, expanded and opened up its headquarters in the City. • Amicis Research Center, a leading integrative clinical research organization that implements clinical trials and services in medical practices to advance the clinical research industry, relocated its headquarters to the Santa Clarita Valley. With the conclusion of the COVID-19 pandemic in 2022, SCVEDC's business assistance efforts shifted to three focal priority areas as the economic uncertainty increased: continuing business attraction and retention initiatives, providing continuous economic information to employers, and lastly, conducting a survey of Santa Clarita Valley businesses in target clusters. SCVEDC conducted a business survey between February and March 2022, reaching out to small business manufacturers. The survey resulted in over 150 respondents and 22 individual interviews with company leaders. More specifically, 30 percent of the respondents were manufacturers, and 50 percent had fewer than 25 employees, which highly represents the majority of the business community throughout the City. The survey revealed that the top concern facing many businesses and employers continues to be workforce attraction and training. Additionally, 82 percent of survey respondents rated the business climate in the Santa Clarita Valley as somewhat or extremely good, which is consistent with the City's efforts in being named as the most business -friendly City in Los Angeles County. Similarly, 91 percent of respondents rated the overall quality of life in the City as somewhat or extremely good. Through ongoing business attraction and retention efforts, SCVEDC worked with 109 companies resulting in 927 new jobs and 91 assistance projects. SCVEDC has also continued expansion of its Business Assistance program to serve local businesses through its free job board, Live WorkSCV. com, to connect local talent with Santa Clarita job opportunities. In 2022, the website saw an overall increase in usage as over 100 Page 2 Packet Pg. 67 O employers participated in a City-wide job fair with over 260 job seekers in attendance and 925 job postings. As part of SCVEDC's priority to provide continuous economic information to employers, the annual Economic Outlook Conference was held in September 2022. The conference provided a snapshot of key economic indicators, a talent report that summarized the capacity of the workforce available to employers in the City, and shared data resources that are readily available to businesses, leaders, and decisions -makers through SCVEDC's website and broker portal. The overall financial goal of the SCVEDC is to continue to create a true partnership of private capital and public capital investment needed to support the organization. By working through the SCVEDC, business and community leaders are supporting regional economic development. Each member of the SCVEDC Board is also an investor, sharing his or her time, financial support, and leadership ability. The expectation continues to be that the SCVEDC's efforts complement the City's efforts and do not compete with the existing economic development efforts and investments of the City, the County, the Chamber of Commerce, the Valencia Industry Association, and College of the Canyons, as well as the commercial real estate professionals involved in economic development efforts in the Santa Clarita Valley. Additionally, it is expected that the City will obtain a return on its investment that is greater than the annual commitments through the matching commitments and leveraging of public and private dollars. Any future investment beyond this agreement would be determined by the City Council and would be contingent upon the measurable successes of the SCVEDC, future City priorities, and the amount of public and private capital raised to support the organization. Moving forward, key factors for continued economic success in the Santa Clarita Valley are customized workforce development, continued public -private coordination, and new industrial development and inventory. ALTERNATIVE ACTION Other actions as determined by City Council. FISCAL IMPACT Adequate funds in the amount of $240,000 are available in Expenditure Account 1003000- 517105 (Economic Incentives) to support the recommended action. Page 3 Packet Pg. 68