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HomeMy WebLinkAbout2010-07-13 - AGENDA REPORTS - UPDATE 21 POINT BUSINESS PLAN (2)Agenda Item: OZA CITY OF SANTA CLARITA AGENDA REPORT UNFINISHED BUSINESS City Manager Approval: Item to be presented by: DATE: July 13, 2010 SUBJECT: UPDATE ON 21 -POINT BUSINESS PLAN DEPARTMENT: City Manager's Office RECOMMENDED ACTION Direct the City Manager to continue the programs of the 21 -Point Business Plan as presented. BACKGROUND On April 28, 2009, the City Council unanimously approved the $18+ million dollar 21 -Point Business Plan. This comprehensive program was developed at the direction of the City Council to provide immediate support to the local business community during the economic downturn, while positioning Santa Clarita for success post -recession. Overall, as a result of the City's business attraction and retention efforts, over 750 new, permanent, and high paying jobs have been added to the City. The latest unemployment numbers for the City of Santa Clarita as of April 2010 show the unemployment at 7.4%. This number has dropped since the peak of 8.2% in January 2010. For comparison purposes, in April 2010, the State of California's unemployment was 12.3%, LA County's was 11.9 %, the City of LA was at 13.2%, Glendale was at 10.4°/x, Lancaster was 16.7% and Palmdale was 14.8%. With regards to sales tax revenue, while the City is down 14% year over year, the City only saw a 5% drop in the most recent 4th quarter sales tax numbers. This number is encouraging given that the City was seeing between a 10-15% decrease in the last four quarters, showing that things seem to be stabilizing, as sales tax is a barometer of the overall health of the economy. The purpose of this update is to provide a review of the accomplishments to date as well as to provide recommendations for the plans continuance. Business Attraction Marketing As part of the plan's regional business attraction marketing campaign, ads have been placed with the LA Times, KFI and KNX radio, the San Fernando Valley Business Journal, and the City has 30 -second television ads running on CNBC, CNN, FOX News, MSNBC, as well as lifestyle networks like The Golf Channel and The Food Network throughout Los Angeles. The City also has wall ads at the Burbank Airport and the City's commuter buses that travel back and forth to Los Angeles are wrapped with a Santa Clarita business message. Recommendation: Extend the duration of this program and continue the marketing efforts and branding of Santa Clarita's business identity. Reallocate $100,000 from the Major Retail Center Agreement for Success program to be spent in FY 2010-2011 to continue building on the momentum of the campaign. Enterprise Zone Marketing Over 200 businesses are participating in the Santa Clarita Enterprise Zone, resulting in over $62 million in tax savings to local businesses and the creation of over 1,700 jobs. The month of April 2010 set a record high with 248 vouchers issued, reflecting the success of the marketing and outreach to the local business community. Recommendation: This program is ongoing. Continue Enterprise Zone marketing and outreach including Economic Development on-site visits within the existing allocated budget relying on existing and re -allocated staff to contact approximately 1,000 local businesses by December 31, 2010. Recycling Market Development Zone (RMDZ) Business Outreach This item included raising awareness among targeted businesses about the RMDZ. One of the first initiatives in promoting the program included developing a list of more than 75 businesses in Santa Clarita that could potentially benefit from the RMDZ program. Once companies were identified, staff created a new one -sheet detailing the program, outreaching directly to the identified businesses, as well as via advertisements in the Santa Clarita Valley Business Journal and San Fernando Valley Business Journal, and banners for targeted business events. Information about the program and its benefits was incorporated and highlighted on GreenSantaClarita.com, WorkSantaClarita.com, and the City's Stimulus/Recovery web site. Valencia Mold, formerly based in the Antelope Valley, moved their headquarters to Santa Clarita to take advantage of the loan opportunities through the RMDZ program. The City is also working with a start-up company "Trade Winds," which is working to secure a loan. Staff successfully secured an additional $5,000 in grant funding to develop new marketing materials and attend trainings to educate staff about promoting the RMDZ program. Recommendation: This program is ongoing. The Economic Development Division will continue to market the RMDZ to targeted businesses within the existing allocated budget. Staff from Economic Development and Environmental Services will coordinate to administer the program. Development Process Improvements A number of significant improvements have been made to the development process, including the creation of a "Permit Center" on the first floor of City Hall, the introduction of e -plans for electronic plan submission, and deferring some permit related fees to encourage business growth. Recommendation: Continue to evaluate ways to streamline the development process. Extend the fee deferrals approved by the City Council on May 25, 2010, to continue through June 30, 2011. Newhall Small Business, Building Improvement, and Green Energy Incentive Program Grants The 21 -Point Business Plan created a number of grant opportunities for local businesses including a small business development grant in partnership with the Santa Clarita Small Business Development Center, a building improvement grant designed to preserve and enhance established buildings, and an energy efficiency grant. There will be over $665,000 in total grants given to more than 35 local businesses this year through these three programs. Recommendation: Continue programs until all funds have been expended. Once the funding is depleted, the programs should be discontinued as this is a one-time only program. Major Retail Center Agreement for Success A program to subsidize permits for targeted retail and restaurant attraction has been implemented. However, representatives at Westfield Valencia Town Center, Centre Pointe, and the Plaza at Golden Valley did not designate any projects to participate in the program. Relationships with the owners of these retail centers were enhanced, but funds have not yet been needed to support permit fees or assistance to attract retailers. Recommendation: It is recommended the $100,000 to support this program be re -allocated to continue the regional business attraction campaign to FY 2010-2011. The retail permit subsidization program would be discontinued. Film Incentive Program The City of Santa Clarita offers the lowest film permit fee in the entertainment industry's "30 -Mile Zone." The Film Incentive Program provides an additional incentive to film locally by subsidizing permit fees for productions that meet certain criteria. Santa Clarita continues to be the only City in the Los Angeles area with a financial incentive program and 14 productions have participated in this program, accounting for nearly $65,000 in incentives. In addition, 23% of the 73 state -approved production for the California Film and Television tax credit program have filmed in the Santa Clarita Valley. Recommendation: It is recommended that this program be extended with the remaining unspent funds, approximately $75,000, being carried over to FY 2010-2011 to continue to incentivize location filming. This program should be re-evaluated after the funds are expended. Business District Improvements Way -finding signs for the Valencia Auto Center and the Valencia Town Center have been installed and a beautification project for Creekside Drive is currently underway. Recommendation: This program is ongoing, funded by businesses through an LMD. Complete the Creekside Road streetscape improvement project in phases and maintain the improvements. Explore other areas of the community that can benefit from future phases of this project. Incentives for Jobs -Producing_ Business The City implemented a permit subsidization incentive for businesses that increase high quality jobs, which has proved successful in retaining and attracting the following businesses with this incentive in conjunction with the other incentives the City offers: Advanced Bionics, Ronan Engineering, Mitsubishi, Quallion, and Aerospace Dynamics International (ADI), representing over 750 jobs. Mitsubishi is a new auto dealership on Creekside. Ronan Engineering and Quallion were previously located in the San Fernando Valley. ADI, currently located in the City, is expanding its workforce and operational square footage. Recommendation: This program to be extended using existing funds. Event Sponsorship This program allows for a business to partner and support City events, promoting the business for multiple years, but deferring the up -front costs and weighting the costs in the future, in order to gain long-term investment from local business partners. Businesses that have participated in the sponsorship program include Parkway Motorcars and Lockheed Federal Credit Union. Local businesses have saved more than $55,000 to date with this program, while committing to long-term sponsorship agreements. Recommendation: This program to be continued permanently as an incentive for long-term sponsorships. Re -Allocate Staff to. Economic Development Four staff members from various departments were re -allocated to Economic Development to expedite the implementation of the 21 -Point Business Plan. As a result of the re -allocation, the Economic Development Division was able to successfully implement all of the programs of the 21 -Point Business Plan, while maintaining the programs and responsibilities in existence prior to the 21 -Point Business Plan's approval. Most importantly, staff was able to reach out to local businesses in person, developing new relationships, all while maintaining the high levels of customer service expected from the division by its target audiences. Recommendation: It is recommended that re -allocated staff remain working with the Economic Development Division through December 2010 to assist with follow-up needed for various programs, as well as continued business outreach. y WorkSource Center The Santa Clarita WorkSource Center was transitioned to the City's Economic Development Division in July 2009 and physically moved to a new location at the College of the Canyons in February 2010. This move brought the WorkSource Center to the College's central hub for local business assistance in the same wing as the Small Business Development Center (SDDC), Employee Training Institute, and the College's Economic Development Division. The results of this transition and relocation have been notable. The close proximity of the WorkSource Center to the SBDC has allowed for cross -promotion of services at several of their events. DME Direct, a medical device manufacturer, has filled positions through the center; Pharmavite, Bank of America, and Green Convergence have worked with the WorkSource Center to recruit candidates; and the U.S. Census held several recruitments filling their positions with WorkSource customers. The City was successful in getting over $200,000 of additional federal WIA monies allocated to Santa Clarita over the past six months, to be used to help local unemployed people prepare for and get placed in jobs. Recommendation: This program is ongoing. Continue the increased focus on the services available to the local business community and to residents. Stimulus Dollars — Infrastructure Projects The City aggressively pursued and secured ARRA funding. Once grant funds were secured, goals included maximizing the economic development impact from City -led infrastructure projects totaling more than $10 million, including expeditiously spending dollars to maximize economic and job -creation impact while improving infrastructure, and publicizing this impact to the community. Projects in this area included bridge rehabilitations, traffic circulation improvements, expansion of parking at the Newhall Metrolink Station, and McBean Regional Transit Center Park and Ride. It is estimated the Asphalt Roadway Rehabilitation Phases 1 & 2, as well as the Traffic Circulation and Safety Improvements at Newhall Avenue and Sierra Highway helped City contractors retain 25 full-time equivalent jobs. Recommendation: Continue program until all funds have been expended. Once the funding is depleted, the program should be discontinued as this is a one-time only program. Apply for additional funding as opportunities arise (if applicable). Stimulus Dollars — Non -Infrastructure The City team aggressively pursued and secured ARRA funding. More than $3.2 million of federal funds were secured. Staff focused on maximizing the amount of stimulus dollars to fund projects in the areas of justice (COBRA), community development (CDBG-R), energy efficiency and conservation (EECBG), and neighborhood stabilization (NSP) in ways that align with supporting businesses. The City successfully secured more than $3.2 million in funding. With these funds the City successfully developed and implemented the Green Energy Incentive Program providing matching funds to local businesses as well as the Building Improvement Grant (BIG) program, ,5 funded with EECBG and CDBG-R funds, respectively. Both programs received positive interest from the business community, with a quality selection of grant applications for review. The City Council also created an Industrial Development Authority and administered the Federal Recovery Zone Facility Bond program to assist businesses in gaining access to capital. Aerospace Dynamics International is also utilizing the Recovery Zone program, and the City has authorized the issuance of $13 million in bonds that ADI plans to use to build their 100,000 square foot addition along with additional equipment purchases. Along with the Use Tax Incentive Program, this has been instrumental in the creation of over 200 new jobs. Recommendation: Continue program until all funds have been expended. Once the funding is depleted, the program should be discontinued as this is a one-time only program. Apply for additional funding as opportunities arise (if applicable). Economic Development Corporation On November 10, 2009, City Council approved $200,000 in funding and support to the Santa Clarita Valley Economic Development Corporation. A total of $75,000 of those funds was provided immediately and the additional $125,000 is to be a dollar -for -dollar match of other funds the SCVEDC secured. The City Manager has been installed as a member of the Board of Directors and attends the monthly Board meetings. Recommendation: Continue support of the Santa Clarita Valley Economic Development Corporation to attract large companies within the City's targeted business industries. Contribute 5200,000 per year for three years to the SCVEDC then re-evaluate after the three year term. Incentives to Purchase Local On May 19, 2009, the City Council voted to increase the Shop Local purchasing incentive from 5% to 10%. Staff has encouraged our local partner organizations to do the same. Crown Trophies was awarded the contract to manufacture the 2009 Santa Clarita Marathon participant medals as a result of the increase of this incentive to 10% for local businesses. The Chamber of Commerce now includes all City purchase requests in their weekly eblast, promoting the City's incentive to purchase locally. Recommendation: This program is ongoing. Staff will continue to outreach to the local community to promote this program. Develop a Tourism Marketing District (TMD) City Council established the Santa Clarita Tourism Marketing District (Business Improvement Area) on May 25, 2010. At the meeting, City Council designated the Tourism Marketing District (TMD) Advisory Board for FY 2010/2011. On June 9, 2010, the newly formed TMD Advisory Board met and reviewed the Brown Act and Public Records Act, the goals for the FY 2010-2011 Tourism Marketing District, expectations of board members and first year of the TMD and the draft budget was reviewed. The next TMD Advisory Board meeting is set to take place on July 27, 2010, and the TMD 2% assessment collection began on July 1, 2010. Recommendation: This program is ongoing. Use Tax Incentive for Business Expansion The City created this program to allow for increased revenue allocation to the City and as a way to encourage local businesses to expand or grow in the City. Economic Development staff and HDL Companies, the City's sales and use tax consultant, have reached out to over 500 businesses letting them know about the program. Staff continues to promote the program, including an article in the June issue of the Santa Clarita Valley Business Journal and through staff's weekly site visits to local businesses. Aerospace Dynamics International (ADI) has been successfully taking advantage of the Use Tax Program. Currently, located in the City, ADI is participating in the business expansion rebate portion of the program to subsidize the permit costs associated with their expansion. Recommendation: Continue program permanently. Economic Development staff will promote this program and administer it in coordination with Finance. Neighborhood Stabilization Program The City of Santa Clarita successfully received a Neighborhood Stabilization grant of $1,187,003, which was the full amount staff applied for. The City will use this grant to move forward with the acquisition of property in the Redevelopment Project Area. A California Healthy and Safety Code 3343 report has been completed, and additional environmental compliance work is being conducted. The land will be used for a project that will contain affordable housing units, which should be ready for occupancy by 2013. Recommendation: Continue program until all funds have been expended. Once the funding is depleted, the program should be discontinued as this is a one-time only program. Apply for additional funding as opportunities arise (if applicable). OVOV — Economic Development Element Staff worked with various members of Santa Clarita's business community, including leaders with organizations such as the Santa Clarita Valley Chamber of Commerce, Valley Industrial Association, Santa Clarita Valley Economic Development Corporation, College of the Canyons, and the Los Angeles Economic Development Corporation, to draft an economic development element outlining Santa Clarita's goals for future decades in this area. The element includes a review of economic advantages and challenges, emphasis on collaborations, provides direction for targeted business outreach, provides direction with regard to land use, planning and redevelopment efforts, and underscores the importance of economic development initiatives locally and regionally. The draft element was made available to the public for review on March 16, 2010, and was presented to the Planning Commission at a study session that same evening. 7 Recommendation: Continue to liaise with Community Development following the work program in place for the OVOV plan, once approved. The City can attribute the 21 -Point Business Plan as playing a crucial role in positioning our local economy for recovery from the recession. The plan has created or enhanced many partnerships with local and regional agencies. It also has allowed us to keep our pulse on the local economy by directly outreaching to local businesses, listening to their concerns, and helping in any way we can. This is a brief overview of the successes seen thus far and recommendations for continuance of the program. More details will be provided to the City Council in the presentation by the City Manager. ALTERNATIVE ACTION Other action as determined by the City Council. FISCAL IMPACT Any financial impacts will be made during the continued appropriations process which will come before City Council in August.