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HomeMy WebLinkAbout2009-05-20 - AGENDA REPORTS - ECONOMIC DEV 21 POINT PLAN (2)CITY OF SANTA CLARITA INTEROFFICE MEMORANDUM TO: Mayor Ferry and Members of the City Co cil FROM: Ken Pulskamp, City Manager DATE: May 20, 2009 SUBJECT: ECONOMIC DEVELOPMENT: 21 -POINT BUSINESS PLAN FOR 'PROGRESS RECOMMENDATION City Council receive staff presentation and discuss. BACKGROUND At the April 28, 2009 City Council meeting, City Council approved the 21 -Point Business Plan for Progress, and directed staff to immediately begin implementation of the plan. Since the recession began in December 2007, the United States economy has shed nearly four million jobs, while foreclosure filings surpassed three million in 2008 alone. To help combat the crisis, the Federal government approved a $787 billion dollar stimulus package in 2009, allocating $185 billion in spending this year to stimulate the economy and create an estimated one to two million jobs. While prudent fiscal planning on behalf of the City of Santa Clarita City Council has lessened the affect of the global economic slowdown, which has devastated some local. communities, the City is not immune to the hardships of the current recession. Fourth quarter 2008 sales tax numbers were 15 percent below same quarter comparisons and were among the lowest in the City's 21 -year history. In addition, the economic crisis has also affected many of our local businesses and residents. The City's current statistics fare far better than national estimates and Los Angeles County as a whole. As of February 2009, only 7.1 % or 2,045,671 square feet of the total space for businesses in the City is vacant. Santa Clarita's unemployment rate in February of this year was also significantly less than the County and State levels with a 6.8% unemployment rate for the City of Santa Clarita compared to 11.0% for Los Angeles County and 10.9% statewide. In the Santa Clarita Valley (inclusive of the City of Santa Clarita), home values have begun to increase with sales trending upward since February 2008. Notices of Default in the City continue to be higher than one year ago at this same time, reflecting a 24% increase year to year." Economic Development: 21 -POINT BUSINESS PLAN FOR PROGRESS May 20, 2009 Page 2 Current economic forecasts state that the dire economic conditions will steadily begin to improve as a result of national and local economic stimulus programs. It is apparent that the City must implement innovative, broad -reaching economic development programs to strengthen our local economy for both the short and long-term. Per the City Council's commitment to support local -based business organizations, City staff has been maintaining communication and collaborating with other organizations with like-minded goals and initiatives, including representatives from the Santa Clarita Valley Chamber of Commerce, Valley Industrial Association, and College of the Canyons among others. In coordination with these organizations, City staff examined the issues facing local businesses in a brainstorming session, and developed programming to complement, enhance, and renew programs to encourage economic prosperity in Santa Clarita. The result is the 21 -Point Business Plan for Progress Program, which aims to enhance local business partnerships, encourage quality job creation in the area, and develop marketing programs to bolster retail spending and attract external dollars to the community. This plan provides structures for strengthening partnerships between the City, Chamber of Commerce, College of the Canyons, Valley Industrial Association, and other economic development -minded organizations. The success of this plan will be increased exponentially by these partnerships. The City of Santa Clarita's 21 -Point Business Plan for Progress programs provide ways to enhance the economy, build upon Santa Clarita's current successes, improve the infrastructure of the .City, and develop the local workforce. The overall goal is to implement these programs now to meet today's needs, so as the economy improves, Santa Clarita is in a position to succeed. As proposed each of these programs will have a one-year sunset to allow for evaluation of success and return on investment. Economic Development 21 -Point Business Plan for Progress Details 1. Enterprise Zone Marketing The Enterprise Zone is a critical state -initiated tax savings program designed to stimulate the economy and return valuable dollars to local Santa Clarita business. As of March 23, 2009, .this program has generated a potential $14,689,000 in savings to local business. This campaign will include increased marketing, and direct outreach to local businesses as a way to help thousands of companies understand the potential tax savings available just by doing business in the City of Santa Clarita. To date we.estimate that less than 5% of eligible businesses have taken advantage of the hiring credits available through the Enterprise Zone, but with increased funding for outreach and marketing to generate awareness of the program and its benefits, this number should increase substantially. $50, 000 (General Fund) Economic Development: 21 -POINT BUSINESS PLAN FOR PROGRESS May 20, 2009 Page 3 2. Recycling Market Development Zones (RMDZ) Business Outreach The City of Santa Clarita is one of 40 Recycling Market Development Zones (RMDZ) in California. The zones are designed to encourage the use of recycled materials in product manufacturing, while encouraging reduction of waste from manufacturing. Qualifying businesses are eligible for low interest loans, financial assistance referrals, and waste exchange. The City's Economic Development Division will develop new marketing materials for outreach to eligible businesses. No New Net Costs 3. Think Santa Clarita Valley / Shop Local Program This program is designed to promote "Thinking Santa Clarita Valley First" to both consumer and Business2Business audiences, encouraging people to Think Santa Clarita when shopping, soliciting services, hiring employees, etc. This campaign will be marketed to BOTH the local Santa Clarita community, as well as the greater Los Angeles area, as a way to attract external dollars to the area. The campaign will consist of targeted direct mail and cable TV ads, banners, bus shelter ads, and outreach both to and through local businesses. The greater Los Angeles outreach will promote Santa Clarita as THE place to shop, locate a business, and live as a way to import sales tax revenue, attract businesses that may not know of our low tax environment, and attract homebuyers with higher incomes who may not know of our excellent schools, parks, commuter services, quality of life, etc. This campaign is being created in partnership with many organizations including the County of Los Angeles, Chamber of Commerce, Valley Industrial Association, College of the Canyons, The Signal, KHTS and others. It is the intent that the City's budget will be augmented by services and support from these other agencies in an effort to create a campaign with the impact of a $1,000,000 budget. $250, 000 (General Fund) 4. Film Incentive Program This program will incentivize increased film production in Santa Clarita by subsidizing permit fees for productions based in Santa Clarita, while exploring opportunities to reduce costs of safety personnel, including fire and sheriff. $150, 000 (General Fund) The program will also explore rebating half of the Transit Occupancy Tax generated from film -related hotel stays (or 5%). These benefits would be available to productions based in Santa Clarita, creating a demand for additional stages and support businesses, while also increasing local jobs for industry workers and sales tax generation. $50, 000 (Loss of revenue) Further, this program will capitalize on the momentum the City has created in increasing film activity, and is ideally timed with the State's new tax incentive, designed to attract increased feature and television production. The City of Santa Clarita already has the lowest film permit fee in the entertainment industry's "30 -Mile Zone," and competitive pricing will remain a key attraction tool for non -local productions seeking affordable location filming sites in the Los Angeles area. Economic Development: 21 -POINT BUSINESS PLAN FOR PROGRESS May 20, 2009 Page 4 5. SBDC Program for Business Explore using $100,000 of the $300,000 CDBG stimulus monies to provide micro -grants or loans to small business that do not qualify for traditional SBA financing, but are in need of funds and present minimal risk. Grants/loans would be contingent upon several factors including the successful completion of SBDC services. $100,000 (CDBG-R DA 09110) 6. Major Retail Center Agreement for Success Create a program in collaboration with Westfield Valencia Town Center and Plaza at Golden Valley that increases future sales tax generation by expediting and subsidizing Tenant Improvement permits for new tenants. $100, 000 (Loss/Deferred Revenue 09110) 7. Development Process Streamline the development process by implementing the 15 -item Plan recommended by the Development Process Advisory Committee .made up of business, development, and community leaders. This plan includes implementing technology solutions to accept plans and 'permits electronically, streamlining permit processes, and formalizing a free one-stop review for projects. This provides greater efficiency and cost savings for developers, and truly makes Santa Clarita a more business -friendly City. $200, 000 (Computer Replacement Fund 09110) Creation of the City's Development One -Stop on the first floor of City Hall to provide business and residents with a central place to obtain development permits without having to talk to several different staff members on different floors, thereby offering a streamlined, convenient approach to permitting in line with the City's service excellence philosophy. $300, 000 (Facilities Replacement Fund/Budgeied) 8. Incentives for Jobs -Producing Business Offer short-term subsidization of permit fees for businesses that produce quality jobs. Projects would be conditioned to require a minimum number of employees, targeted opening date, etc. $50, 000 (General Fund) 9. Event Sponsorship Encourage event sponsorship and create marketing value for local businesses by creating a multi-year sponsorship program that allows for minimal or zero spending by business now with contracted future payments. (For example: Bristol Farms could sponsor Concerts in the Park with a 5 -year agreement, only paid in the final 4 years). $TBD (Loss of Revenue) Economic Development: 21 -POINT BUSINESS PLAN FOR PROGRESS May 20, 2009. Page 5 10. Re -Allocate Staff to Economic Development Reallocate staff from divisions with reduced workloads to the Economic Development Division to allow for implementation of programs identified here, as well as other ongoing programs. (For example: Create a system to evaluate all City facilities and parks projects in design process to look for opportunities to spend a little money now for bigger return later; evaluate all City -produced events to maximize economic benefit, etc). No New Net Costs 11. WorkSource Center Restructure organizationally to move WorkSource under Economic Development Division to maximize benefit to business community. Align with College of the Canyons . to create integrated job training and job placement system. Explore creation of a north LA County Workforce Investment Board to provide increased control and funding. Aggressively seek to capitalize on stimulus dollars for increased funding. No New Net Costs 12. Business District Improvements This project will beautify medians and streetscapes for businesses, as well as provide greater signage opportunities. The first phase of this project includes way -finding median signage for the City's two largest sales tax generators — Valencia Town Center and Valencia Auto Center. The signage will be located along McBean Parkway, Valencia Boulevard, and Magic Mountain Parkway. The project will also include streetscape beautification improvements to Creekside to create a sense of place and encourage consumer visits. Future phases could include the following business areas: Bouquet Canyon from Soledad, north to Seco; Railroad Avenue from Via Princessa, north to the Bouquet Junction; the area at the intersection of Copper Hill and Newhall Ranch Road; Centre Pointe Parkway; and the area at the intersection of Sierra Highway and Via Princessa. $2,000, 000 (LMD) 13. Stimulus Dollars - Infrastructure Projects Maximize the economic development impact from City -led infrastructure projects and publicize that impact to the community. Aggressively pursue and expeditiously spend stimulus dollars to maximize economic and job creation impact while improving infrastructure. Projects in this area include highway infrastructure and transit capital assistance, including bridge rehabilitation, traffic circulation and improvements, expansion of parking at the Newhall Metrolink Station, McBean regional transit center Park and Ride, and others. $10,300,514 (Secured Federal Funds) Economic Development: 21 -POINT BUSINESS PLAN FOR PROGRESS May 20, 2009 Page 6 14. Stimulus Dollars - Non -Infrastructure Use these special funds in ways that align with supporting businesses. Maximize the amount of stimulus dollars to fund projects, including justice (COBRA), community development block grants (CDBG), energy efficiency and conservation, and neighborhood stabilization. This could also include incorporation of broadband technology opportunities once available. $3,230,770 (Secured Federal Funds) 15. Economic Development Corporation (EDC) Partner with the Chamber of Commerce, Valley Industrial Association, College of the Canyons, and other agencies to explore the formation of an economic development corporation with the responsibility and direction to promote business in Santa Clarita Valley. One function of EDC would be implementation of registry of all businesses to maximize business -to -business opportunities, to more accurately identify business industry clusters, and to identify potential attraction targets from vendor/supplier, customer chain. TBD 16. Incentive to Purchase Local Increase the City local purchase incentive from 5% to 10%, and create a "Give me 10" promotion. Encourage other agencies to create similar programs: COC, Hospital, school districts, etc. This program supports and reinforces the Think Santa Clarita program. No Net Costs 17. Develop a Hotel Business Improvement District (BID) The City of Santa Clarita would work with hotel business owners in the City to add an additional tax assessment of 2 %, thereby increasing funds for marketing tourism to Santa Clarita. The small increase would provide the same level currently in the County. Monies would be used to attract regionally and nationally, and support the City's efforts to bring high economic impact events such as sports and cultural Tourism, including but not limited to events like the PGA Champions Classic and the AMGEN Tour of California. $400, 000 (New Revenue) Formation Expense TBD 18. Old Town Newhall Create facade improvement program for Old Town Newhall businesses. Provide financial assistance in the form of grants and/or loans to assist small businesses in Old Town Newhall to support attraction, retention and potential expansion. $150, 000 (CDBG-RDA 09/10) Economic Development: 21 -POINT BUSINESS PLAN FOR PROGRESS May 20, 2009 Page 7 19. Use Tax Incentive for Business Expansion Incentivize business expansion AND generate increased Use Tax revenue by allowing any business that directs a Use Tax payment of over $20,000 to the City to allocate one half of that payment to be used towards permit fees or rebate to business. TBD (Loss of New Revenue) 20. Neighborhood Stabilization Program This money will help stabilize neighborhoods affected by the housing and foreclosure crisis. Funds can be used to purchase and rehabilitate foreclosed homes to sell or rent to lower income buyers; demolish blighted structures; and assist in redevelopment efforts for both residential and commercial properties. The activities are targeted to the neighborhoods hit hardest by sub -prime lending practices and foreclosures. $1,187,003 (NSP Funds 09110) 21. OVOV — Economic Development Element Create a separate stand-alone element focusing on Economic Development for the One Valley One Vision general plan, creating long-term sustainability for the quality of life and economic stability of Santa Clarita. No New Net Costs Summary of Costs $ 500,000 General Fund Expense/Council Contingency $ 250,000 CDBG-RDA $ 2,000,000 LMD $ 1,187,003 Neighborhood Stabilization Program Grant $ 200,000 Computer Replacement Fund $ 300,000 Development, One -Stop (Budgeted) $ 150,000 Loss of Revenue/Deferred Revenue $ 250,000 Redistribution of Staff (No New Net Costs) $ 400,000 New BID/TOT Revenue/Expense $13,531,284 Secured Federal Stimulus Dollars $ 5,237,003 Without Federal Stimulus Dollars $18,768,287 Inclusive of Federal Stimulus Dollars