Loading...
HomeMy WebLinkAbout05/06/2008, STUDY SESSION 1 - ECONOMIC DEVELOPMENT PROGRAM STATUS UPDATE /1 \ council MKS 5-6-2008 j ac,Enaa nEpont CITY OF SAN LUIS OBISPO FROM: Shelly Stanwyck, Assistant CAO Prepared By: Claire Clark, Economic Development Manager SUBJECT: ECONOMIC DEVELOPMENT PROGRAM STATUS UPDATE CAO RECOMMENDATION Receive an update on the City's Economic Development Program and discuss present program direction. REPORT IN BRIEF Since the mid-1990s, the City has had a formal Economic Development Program. Over time, the program has evolved and matured. Initially, it was an added duty of the Assistant City Administrative Officer (ACAO). As needs changed and as General Plan policies and Major City Goals were adopted that focused on economic development, a full time position of Economic Development Manager was created. A consistent theme throughout the evolution of the program has been a focus on developing a program that is just right for San Luis Obispo. As such, the Economic Development Program is complimented by the City's Natural Resources Program. The managers of both programs collaborate to achieve common goals and work with the community to accomplish specific goals that are balanced and reflective of the community values. This program update will serve to highlight the past and present and provide an opportunity for Council to discuss the future. This discussion is timely, as recent economic studies, such as the UCSB Economic Forecast Project, have shown negligible job growth since 2001, Attachment 1. Demographic and other trends (including housing costs) will continue to challenge the City in the future. As we enter another national economic downturn it is critical to continue to refine the City's efforts to create a vibrant, diverse, and healthy local economy. There are many opportunities on the horizon for proactive economic development work on the part of the City, including: • Updating the City's Targeted Industry goals; • Coordinated use of new commercial properties (by expanding or new businesses) as a result of the annexation of Airport Area properties; I Economia Development Program Status Update Page 2 ■ Developing more extensive, and City specific; demographic data using GIS based software. ■ Continuing to coordinate significant projects including Chinatown, Garden Street Terraces, and the Perfumo Creek Commons. ■ Continuing to encourage the location of new autodealers in the Autopark Expansion area. ■ Working with Cal Poly on the possible implementation of a Business Incubator project; ■ Assisting the Downtown Association's implementation of its Strategic Plan, including major projects that will fill existing Downtown voids (such as a downtown hotel); ■ Assisting the Chamber of Commerce with the update of its Economic Development Vision document; • Coordinating with the Economic Vitality Corporation in business retention, expansion, and recruitment efforts; ■ Assisting new businesses that may locate in the Broad Street Corridor as a result of an anticipated area specific plan. ■ Considering other ideas or program enhancements during the 2009-11 Financial Plan and goal setting process. DISCUSSION Economic Development Program History 1. The Early Years The 1990s brought tough financial challenges to the City which, like other cities, was hit hard by the recession and concurrent State budget take-aways. Recognizing the challenge of the economic times, the City Council established an Economic Stability Program as part of the 1991- 1993 Financial Plan. The economic stabilization function was undertaken by then ACAO Ken Hampian. It included notable successes such as retention of County Administration offices in the Downtown, retention of the Telegram Tribune offices, San Luis Sourdough, JBL Scientific, and development of the Downtown Centre. Economic stabilization also included support of destination tourism, encouraging the expansion of the Auto Center, completion of the Downtown Physical Concept Plan, completion of the Broad Street Annexation, and enhanced customer service programs such as a user friendly building permit guide. These and other achievements provided a positive impact on the City and in 1993 the Council established a 1993-1995 Major City Goal to implement a defined, proactive Economic Stability Program. 2. Program Formation In 1993, the Council endorsed appointments to an Economic Strategy Task Force (ESTF) for the purpose of formulating recommendations for strengthening the role of City government in the local economic environment. On October 1, 1993, A Vision for Economic Stability in San Luis Obispo was released by the ESTF, Reading File 1. The Council held public hearings on the recommendations and in November conceptually accepted the recommendations of the ESTF and referred them to staff for further analysis and recommendations for implementation. a - a. Economic Development Program Status Update Page 3 Staff analysis resulted in an implementation matrix, Reading File 2, which addressed 59 recommendations. The key issues included 1) consistency of recommendations with the.Land Use Element in the General Plan; 2) alternatives for staffing an economic stability position; and 3) formation of a economic stability committee/advisory body. The Council affirmed the ESTF's statement that any economic strategy needed to support the three sides of the so-called "Community Triangle", namely economic, environmental, and social concerns. A close working relationship was fostered between the City and the established external groups such as the Chamber of Commerce, the Downtown Association, the Economic Vitality Corporation and the Economic Advisory Committee to continue to make recommendations regarding the economic vitality of the City. In 1995, these groups worked with City staff to inform and encourage the Council goals to establish a goal for Economic Development that was balanced with Environmental Protection, in keeping with the "Community Triangle". At that time the Council established a full-time Economic Development Program and, at the same time, a full-time Natural Resources Management Program. This balance between values. persists today in the General Plan's statement of Community Goals on page 1-14 of the Land Use Element, Attachment 2. 3. Major City Goals over the Years Focused on Economic Development The City's Economic Development program is flexible and intentionally designed to be responsive to changing business conditions. Because the City does not have a redevelopment agency, the program has been carried out without some of the tools available in other jurisdictions — but the program still works for San Luis Obispo. Interestingly, as time goes on, and aggressive incentive-based programs fail to achieve results, many jurisdictions are turning to programmatic models similar to ours. In addition to specific policies throughout the General Plan that are supportive of economic development, the Council's Major City goals have informed the program's efforts for more than ten years. Economic Development focused Major City Goals have included the following: 1995—1997:Implement and Expand Existing Economic Development Program. This goal focused on the implementation of the economic development program approved by the Council in 1994. To implement this goal, the Council approved a workscope for a Targeted Industry Study, Attachment 3, with the assistance of an ad hoc working group of local industry experts known as the Targeted Industry Cluster Committee (TICC). Clean industries and head of household jobs in three industry segments are the focus of this study. A related goal at the time was the Seismic Retrofit Program which tasked staff to implement a reasonable approach for a seismic strengthening program for the identified unreinforced masonry (URM) buildings. 1997- 1999: Three Separate But Related Goals—Economic Development in General, Revitalization of the Madonna Road Shopping Area and the Annexation of the Airport Area. a -3 Economic Development Program Status Update Page 4 (a) Economic Development Program. Staff was directed to continue to implement the economic development program, including focused business 'recruitment efforts consistent with the results of the targeted industry cluster study. (b) Madonna Plaza and Central Coast Mall Revitalization. At the time both properties were underperforming or failing as a result of a variety of factors. Council recognized the need to proactively work to revitalize Madonna Plaza and Central Coast Mall. The Economic Development Program facilitated and coordinated meetings with owners/developers/users, with assistance from Community Development. Both properties subsequently redeveloped or remodeled and are very successful retail centers today.. (c) Airport Area Annexation. The economic development portion of this goal was to coordinate property owner liaisons and review the specific plan drafts. 1999—2001: Area Specific Goals: Enhancements to Downtown and the annexation of the Airport Area (a) Court Street - Chinatown. The Court Street development was the highest priority project in the City during this timeframe. This development increased sales tax revenues and strengthened the Downtown shopping district as the outskirts of the City were being developed to accommodate large format stores. The Economic Development Program facilitated and coordinated the staff effort to complete the City's review of the project and assisted the owners/developers to successfully complete this project. (b) Airport Area Annexation. The economic development tasks continued to focus on serving as liaison to property owners; providing recommendations regarding needed land uses and appropriate development standards, and reviewing the draft specific plan. 2003—2005 Generating Revenue to Combat Continued State Takeaways- Two Goals. (a)Economic Development: Transient Occupancy Tax. Staff was directed to encourage and promote projects that will increase lodging and conference facilities in order to generate additional Transient Occupancy Tax revenues. In addition to assisting with project review staff and the Promotional Coordinating Committee (PCC) updated the City's Tourism Marketing Plan and began to implement more competitive advertising and promotional efforts in the hopes of increasing hotel occupancy rates. . (b) Economic Development. Sales Tax. Staff was directed to encourage and promote retail projects that will increase sales tax revenues. The Court Street project continued to be the major focus for downtown retail and the expansion of the Irish Hills Plaza and approval of Costco were the regional retailing projects staff focused its efforts on. 2005 — 2007: Continued Efforts Toward Generating Revenue to Combat State Takeaways. Staff continued to provide development review support and coordination for large development projects resulting in increased sales tax and transient occupancy tax r� Economic Development Program Status Update Page 5 revenues. This resulted in the opening of Court Street in June 2006; Costco's opening at the end of the year, and the subsequent opening of the Courtyard by Marriott in mid-2007. Current Economic Development Activities Today, the activities of the Economic Development Manager continue to be informed by the General Plan and the Major City Goals of 2007-2009. Of particular focus for this two year Financial Plan period is the Major City Goal to strengthen support for the Downtown. The Economic Development role for this goal has been to assist with update of the Downtown Association's Strategic Plan and evaluation of alternative organizational forms and to support efforts for compliance with seismic deadlines for URM buildings. The Economic Development Program also provides staff support for completion of important revitalization projects such as Garden Street Terraces and Chinatown and continues support for expansion efforts of the Art Center and Children's Museum. Furthermore, as mentioned above, the General Plan Land Use Element continues to reflect the Community's Goals for Society and Economy. The General Plan calls for a well balanced community acknowledging the balance of environmental, social, and economic factors, the "Community Triangle values". This balance is reflected in the specific goals that are listed in the General Plan, Attachment 4. Day to Day Focus Much of the Economic Development Program focus is on the routine. Although the Program Manager has, over the years, been involved in a wide variety of high profile projects that accomplish various Major City goals, the day to day business of economic development is on a much smaller scale. A typical day involves answering basic questions about doing business in the City, researching a question posed by a small business looking for suitable space for relocation, solving a problem for an existing business or finding needed demographic information so that a business plan can be completed. Coordination of internal and external meetings where community group partnerships are enhanced is a service offered to benefit both City staff and those interested in coordinating their efforts with the City. The Program makes particular efforts in the following areas: 1. Seismic Coordination A part time temporary Seismic Coordinator position was established by the Council in 2004 to . address the need to help building owners subject to the seismic retrofit rules. The position was located in the Economic Development program in recognition of the economic development activities embedded in the Seismic Coordination role. Since 2006, seismic coordination duties have been folded into the role of Economic Development Manager. Seismic.Coordination has included building and maintaining a high community profile to help those affected by the retrofit requirements find the information they need to comply with the program or meet the challenges imposed by the retrofit deadlines, support for building and business owners in obtaining permits, assistance in identifying alternative locations for tenants A -� Economic Development Program Status Update Page 6 affected by a retrofit project, communication of the requirements of the URM ordinance for seismic strengthening and installation of fire sprinklers, assistance with the permitting process where changes in the existing permit is desired by the building owner and work with City staff and applicant for effective and efficient processing. This has meant understanding the breadth and depth of the 126 listed properties, their owners, their tenants, and the properties potentially affected in the vicinity of the URM buildings. To date, 64 buildings have been fully retrofitted, with good progress underway for the July 1, 2008 deadline. Obviously, the positive aspect of this part of economic development is that it is people centric with many opportunities to help find solutions for those affected by the program and many opportunities for outreach. An unintended consequence of theretrofit deadlines has been a blossoming of economic vitality primarily due to the many building owners to have chosen to upgrade their buildings in addition to the seismic strengthening. Throughout the downtown we see evidence of buildings that continue to be upgraded, inside and out, adding character and interest to our City. 2. Business Retention and Attraction Over time, many cities have discovered that growing local businesses is the most likely path to success. This style of economic development has been called Economic Gardening. It has been the style used by our program - even before it had a catchy name. Since 2000, the City has maintained a listing of available commercial property on the Economic Development web pages for businesses wishing to locate or expand. This listing is updated monthly and includes properties within city limits offered by realtors and individual building owners. Before the Program took on this task, there was no central location for this information. Businesses large and small use this resource. Started in the late 1990s in coordination with the San Luis Obispo Chamber of Commerce, the City's Business Visitation Program visits approximately 10 businesses per year. Council members'and Chamber leaders attend these diverse visits. Recent visits have ranged from such diverse businesses as Meridian in its new format outside of Downtown to ZooMed, a pet food supplier with a local, growing operation. The program offers specific assistance with questions and concerns raised by applicants in the permitting process. When it comes to setting up a business in the City, communication about the City's requirements for business licensure, as well as coordination with small business advisors available through Cuesta College or the US Small Business Administration, is a small piece of the assistance offered. It is also common to help with demographics, with location, with questions about what else might be happening in their chosen block, and to refer them for help with other City departments. Staff expends considerable time focused on site location efforts related to business retention and expansion and, to a limited degree, recruitment. Staff has worked closely with most of the property owners in the Airport Area in preparation for future annexations. The Annexation of the properties in Phase 1A in the Airport Area offers the first real example of space for significant expansion of existing businesses, or even new businesses, to create new jobs in the Economic Development Program Status Update Page 7 .City. With this annexation comes the opportunity to update of the City's Targeted Industry Goals (setting forth the nature and types of businesses that will compliment existing City businesses) to better focus staff's efforts. Attraction projects have included work to populate the auto lots on Calle Joaquin and work with landowners on various retail projects throughout the community. 3. Marketing the City as a Place to do Business Marketing the City is accomplished in conjunction with all City departments and by making the Economic Development marketing messages available through access to the City's website, printed copy, and participation with local organizations. Networking locally with business-focused organizations such as the Chamber of Commerce, Economic Vitality Corporation, Downtown Association, commercial real estate brokers, and County Economic Activities Committee, as well as working as a liaison to property owners in Airport Area Annexation helps to enhance the City's proactive and community service oriented image. `: Our message to Shop SLO, in an effort to combat internet sales and keep it 1\0/eal raise awareness of locally oriented spending, is a keystone in the efforts to support local businesses. Started in 2005, the program continues annually. This year the City partnered with Pacific Gas and Electric to provide reusable bags to local merchants in a pilot program. The focus of Shop SLO also includes support of the environmentally sound practice of shopping in your own community. 4. Community Relations a The Chamber o Commerce. The Program has a positive and ( ) f proactive relationship with the Chamber of Commerce that is borne of open communication, regular meetings, and City participation on the Chamber's Economic Development Committee. City staff also participates on the Seismic Task Force to address concerns as they arise from this Chamber group. SUCCESS The Economic Development Manager and Chamber frequently 62(16lt �fqcompare notes and share ideas to facilitate understanding of proposed policies and positions. Joint business visits continue to vi: =flec,Ow,sFa�-s t,lSL°'�XyCC offer opportunities to better understand our local business Iiwing.do nate for'businns cuar_ss t!nt cus<afi co quility cf Iil?.7%w l wvw Jo community. Recent retention efforts included Chamber President d,;<,gs ditr�_ndy,find uc at vrawelcat. g. Dave Garth in discussions with a local business looking for ;1�c:n.(,FkajUlj, „,,, teav,,;. expansion opportunities to great effect. The Chamber often includes the Economic Development Program in the City-wide mntusorasw Economic Forecast panel, the Chamber Leadership program, and rwnomic Dmelopment Program as a local expert at various Chamber committees. C,LAJRE CLARK NvelopnvaNlanager Additionally, the City uses several Chamber print opportunities ” 5)781-7164 bVWWJ Ltprq to welcome to new businesses, including the Chamber newsletter a -� Economic Development Program Status Update Page 8 and Membership Directory where the newly updated City Economic Development message is presently placed. We also employ the Chamber's City Map, and activities such as the Mixer Showcase, as ways to send the message that we welcome businesses to our community. (b) Economic Vitality Corporation. Through its services agreement, the City also enjoys a good relationship with the Economic Vitality Corporation (EVC) through informal participation in Board meetings and regular meetings with the EVC President and CEO, Mike Manchak. Council Member Carter presently serves as Council representative on the EVC Board of Directors. As a result of a joint effort between the City, Chamber, and the EVC, an Economic Development Professionals' Group has been formed and affords better understanding between the.separate jurisdictions in the County through periodic meetings and tours of each jurisdiction. In addition, the EVC continues to facilitate the City's support of businesses through the Revolving Loan Program, including both small businesses and established businesses such as Cuesta Equipment. Recently, the City was invited to showcase its economic development successes at the EVC Board. Mike Manchak continues to convey community concerns and kudos to the Economic Development Program and was instrumental in facilitating communication with a business ripe for expansion in our jurisdiction. Assistance with expansion area business retention is on the horizon with the EVC. (c) San Luis Obispo Downtown Association. Over the past several months, in keeping with the major City goal supporting the Downtown, the Economic Development Program has facilitated the transition to a separate non-profit organization of the Downtown Association. Other ongoing work includes coordinated efforts with Downtown Association staff to address issues raised by members of the Downtown community such as bench placement, parking meter bags, and seismic retrofits. The San Luis Obispo Downtown Association (SLODA) and the City continue to work in support of projects that bring economic vitality via development of downtown hotel rooms. These projects, including Chinatown and Garden Street Terraces, have the potential to take the Downtown to a new level with housing and hotel space. The Economic Development Program participates on the Downtown Association Economic Development Committee to offer support for issues that arise on such diverse issues such as seismic retrofit impacts on neighboring businesses, new and moving businesses, and the work of the Downtown security in addressing issues such as graffiti and transient activity in the Downtown. The most important recent work has been the successful transition to a separate Downtown Association through coordination of efforts between City staff and Downtown Association staff. (d) Cal Poly and Cuesta. The Economic Development Program is invited to participate in classes where economic development is introduced to Cal Poly students. This opportunity to showcase the City's programs and processes is a special treat due to the high level of interest in the City's programs. The success of the City's Seismic Retrofit program has been showcased on several occasions and the program is used in case studies that help students understand the way that economic development, local regulations, and planning efforts all fit together to effect the resulting livable City. Cuesta's connection with the US Small Business Administration offers tools for growing small businesses and through program referrals helps small businesses in our jurisdiction. a -g Economic Development Program Status Update Page 9 5. Interdepartmental Coordination Success in economic development, whether in support of the small business or large, is incumbent on the effective coordination among City Departments. Quick Response Team meetings are offered to developers to encourage development consistent with the community values. Cross-departmental meetings provide high levels of customer service whether the question is annexation, water service, or a desire to relocate a business. It is the work of staff in various departments who clarify the City's policies and rules for community members doing business with the City that is key to the City's success. Economic Development staff is supported by staff members from Public Works, Fire, Community Development, Utilities, and Police in an effort to address the broad range of questions that are posed through telephone calls, emails, and work with external partners. Project coordination occurs through weekly meetings of the Development Review Team where staff is kept informed and timetables are reviewed for completion of work in a timely fashion. Looking to the Future The City, as a service business, is weathering this latest economic downtown as well as it can. That is because the Council and the community put in place various mechanisms to increase revenues and decrease costs. Along with Measure Y, the City's enhanced retail position in recent years has certainly helped us a great deal. However, many local businesses are struggling. Looking forward, there is always more that can be undertaken to encourage a resilient economic base, able to tolerate changes in its parts, without causing overall harm to the community. We find our community, once again, in a time of economic challenge but one which holds opportunities for the City in participation with external partners. The City's job growth is stagnant when viewed as an average of all sectors. This is a concern for the health of the City's economy. The City's fastest growing sector is retail jobs which pay the lowest wages, on average. Overall, there has been negligible job growth in the City since 2001 according to the 2007 San Luis Obispo City UCSB Economic Forecast seen at Attachment 1. Although the City has well established programs that address retention and expansion, there are steps the City can take to do more to help businesses stay here, expand here, and locate here. These steps require obtaining more information about our local "powerhouse" businesses. One way to accomplish this is through one on one business interviews, the application of various GIS technologies, and data collection, activities not currently accommodated by the Economic Development Program with one full time employee and a budget of$217,000. Web communication that is proactively maintained, updated and with refreshed content is another way that the City could, with redirected resources, better publicize its accomplishments, in economic development, natural resource protection, and all other areas. This step would also offer better access to information about doing business in San Luis Obispo, an important tool in today's economic climate. Current web presence lacks a consistent message for readers, and only begins to scratch the surface of the opportunities available to Cities today. Once again, present staff constraints limit these efforts. Economic Development Program Status Update Page 10 An opportunity for refreshing direction is updating the Targeted Industries Study completed in 1997 as part of the work of the original dedicated Economic Development staff. In addition, City staff has been invited to be part of the update to the Chamber's Vision Document and the visioning trip to Boulder Colorado in late June. One or two representatives of the City Council may also be invited to participate in the Boulder trip and the update of the Chamber's Economic Vision Document. Conclusion Several future plans, and potentially some new paths and ideas for the Economic Development Program, have been outlined in this report. The business community and others may bring forward other similar or new ideas for consideration by the Council during our discussion, or as a result of the Boulder trip, subsequent Chamber visioning and the City's two-year goal setting process. The ongoing discussion and consideration of opportunities to support a balanced approach to the community's economic, social, and environmental concerns is of great importance to the members of the community as we experience another challenging cycle in our economy. ATTACHMENTS 1. 2007 San Luis Obispo City UCSB Economic Forecast, pages 14 and 15 2. General Plan Land Use Element, pages 1-14 through 1-16 3. Targeted Industry Cluster Committee Final Report READING FILE 1. A Vision for Economic Stability in San Luis Obispo dated October 1, 1993 2. Summary of ESTF Implementation Recommendations T:\Council Agenda Reports\Admin\EconDevProgramUpdateFnal O ATTACHMENT I Employment Distribution San Luis Obispo Metro Area 2006 San Luis Obispo City's jobs are Agriculture concentrated in the Public, Re- Public Sector 1% Mining tail, and Services sectors, and 0% this concentration is becoming ,. Construction an ever-larger proportion of the 4% h' Services _ - -- Durable Goods City's economy. 36% 2% Non-Durable Goods 3% Trans.,Comm.&Utilities 4% Finance,.lns.&Real Estate Retail Trade 6% 22% wholesale Trade 2% Source: C-I Emplavment Development Deparnnent Total Employment and Employment Growth line:jobs San Luis Obispo Metro Area bar:percent 45,000 San Luis Obispo City has seen 20 negligible job growth since 40,000 is 2001. We see no reason for an acceleration in job growth 35,000 10 within the forecast horizon. 30,000 5 FIF FIFIr 25.000 0 7 20,000 _5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2.007 2008 2009 Note:The last three years are estimated/forecasted So+nve: CA Emplownenr Development Department Employment Distribution San Luis Obispo Metro Area 2006 Public sector - ,. . - ___._.___. This chart is another way of ob- Services :.: _ - -------_ :- serving San Luis Obispo City's Finance.Ins.&Real Estate dependence on the Public, Retail Trade ' Services, and Retail sectors. Wholesale Trade Trans.,Comm.&Utilities -- Non-Durable Goods Durable Goods Construction - Mining Agriculture 0 3,000 6.000 9,000 12,000 15,000 jobs Source: CA Empinvment Development Deparnrrent 14 The City of San Luis Obispo Economic Forecast•2008 a - Ii ATTACHMENT 1 Employment and Salary 1-Year Employment Growth by Industry San Luis Obispo Metro Area Retail Trade, with 181 new City 2006 Public Sector jobs, continues to dominate Services San Luis Obispo City's job Finance.Ins.&Real Estate growth. The domination is a Retail Trade Wholesale Trade reflection of new or expanded Trans.,Comm.&Utilities retailers and the weakness of Non-Durable Goods many other sectors. The Ser- Durable Goods Construction vices sector generated about Mining 61 new City jobs. Agriculture .50 0 50 100 150 200 jobs Source: CA Emplo ment Developmenr Depm•rment Total Average Salary and Average Salary Growth line:$per worker San Luis Obispo Metro Area bar:percent San Luis Obispo City's aver- 45,000 30 age salary growth has been at 40,003 za about the inflation rate for each 35,000 of the past two years. 18 30,000 12 25,000 20,000 6 15,000 lr=i0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Note:The last three years are estimated/forecasted Source: CA Emplgvment Development Department Average Salary by Industry San Luis Obispo Metro Area Public Sector 2006 San Luis Obispo City's fast- Services growing Retail sector pays, Finance,Ins.&Real Estate on average, the City's lowest Retail Trade Wholesale Trade wages. Trans.,Comm.&Utilities Non-Durable Goods Durable Goods Construction Mining Agriculture 0 20,000 40,000 60,000 80,000 dollars per worker Source: CA Emplgvment Development Department The City of San Luis Obispo Economic Forecast•2008 ib (` ATTACHMENT Y n a is olsp Land Use THE GENERAL PLAN Community's Goals Introduction Goals describe desirable conditions. In this context, they are meant to express the community's preferences for basic future directions. In the goal statements, "San Luis Obispo" means the community as a whole, not just the City as a municipal corporation. The statements also indicate what the City should do and what it should influence others to do. The goals state San Luis Obispo's basic positions on the extent, rate, composition, and financing of growth. The following Growth Management section includes policies and programs which offer more specific guidance on these topics. Later sections, dealing with parts of the City and with land-use categories, give more detailed direction on preserving neighborhoods and designing new development. Approach to Planning San Luis Obispo should: 1. Choose its future, rather than let it happen. San Luis Obispo should be proactive in implementing its vision of the future, and should work with other agencies and institutions to create our desired mutual future. Environment San Luis Obispo should: 2. Protect and enhance the natural environment, including the quality of air, water, soil, and open space. 3. Protect. sustain, and where it has been degraded, enhance wildlife habitat on land surrounding the city, at Laguna Lake, along creeks and other wetlands, and on open hills and ridges within the city, so that diverse, native plants, fish, and animals can continue to live within the area. 4. Protect public views of the surrounding hills and mountains. 5. Recognize the importance of farming to the economy of the planning area and the county, protect agriculture from development and from incompatible uses, and protect remaining undeveloped prime agricultural soils. 6. Protect and restore natural landforms and features in and near the city, such as the volcanic morros, hillsides, marshes, and creeks. 7. Foster appreciation among citizens of the complex abundance of the planning area's environment, and of the need to respect natural systems. S. Identify, map and monitor our community's natural assets to preserve and protect them. Society and Economy San Luis Obispo should be a well balanced community. Environmental, social, and economic factors must be taken into account in important decisions about San Luis Obispo's future. A healthy economy depends on a healthy environment. The social fabric of the community for both residents' and visitors must also be a part of that balance. Therefore, complementary to the goals and objectives of this element, the City shall maintain and bi-annually review goals and objectives that promote the economic well being of the community. San Luis Obispo should: a - 13 1-14 ATTACHMENT 2 0 sompo Land Use ssAn THE GENERAL PLAN 9. Provide employment opportunities appropriate for area residents' desires and skills. 10. Provide goods and services which substantial numbers of area residents leave the area regularly to obtain, provided doing so is consistent with other goals. 11. Retain existing businesses and agencies, and accommodate expansion of existing businesses, consistent with other goals. 12. Emphasize more productive use of existing commercial buildings and land areasalready committed to urban development. 13. Provide an adequate revenue base for local government and public schools. 14. Provide high quality public services, ensuring that demands do not exceed resources and that adequate facilities and services can be provided in pace with development. 15. Cooperate with other agencies in the county to assure that increases in the numbers of workers and college and university students in the San Luis Obispo area do not outpace housing availability. 16. Accommodate residents within all income groups. 17. Preserve existing housing which is affordable to residents with very low, low, and moderate incomes. 18. Actively seek ways to provide housing which is affordable to residents with very low, low, and moderate incomes, within existing neighborhoods and within expansion areas. 19. Encourage opportunities for.elder care and child care within the city. 20. Enrich community cultural and social life by accommodating people with various backgrounds, talents, occupations, and interests. 21. Provide a resilient economic base, able to tolerate changes in its parts without causing overall harm to the community. 22. Have developments bear the costs of resources and services needed to serve them, except where the community deliberately chooses to help pay in order to achieve other community goals. 23. Provide for high quality education and access to related services such as museums, art galleries, public art, and libraries. 24. Serve as the county's hub for: county and state government; education; transportation; visitor information; entertainment; cultural, professional, medical, and social services; community organizations; retail trade. 25. Provide a wide range of parks and sports and recreational facilities for the enjoyment of our citizens. 26. Retain accessible, responsive, and capable local government. 27. Ensure that residents' opportunities for direct participation in City government and their sense of community can continue. City Form San Luis Obispo should: 28. Maintain the town's character as a small, safe, comfortable place to.live, and maintain its rural setting, with extensive open land separating it from other urban development. 29. Maintain existing neighborhoods and assure that new development occurs as part of a neighborhood pattern. 1-15 ^ I � �. ATTACHMENT 2 O sawn lots OBISPO land Use THE GENERAL PLAN 30. Keep a clear boundary between San Luis Obispo's urban development and surrounding open land. 31. Grow gradually outward from its historic center until its ultimate boundaries are reached, maintaining a compact urban form. 32. Foster an awareness of past residents and ways of life, and preserve our heritage of historic buildings and places. 33. Develop buildings and facilities which will contribute to our sense of place and architectural heritage. 34. Develop buildings and places which complement the natural landscape and the fabric of neighborhoods. 35. Focus its government and cultural facilities and provide a variety of business services and housing in the downtown. 36. Provide a safe and pleasant place to walk and ride a bicycle, for recreation and other daily activities. 37. Be a safe place to live. 1-16 � � 1� ATTACHMENT 3 I TARGETED INDUSTRY CLUSTER COMMITTEE FINAL REPORT Adopted by City Council September 9, 1997 I I I I All"' city Of san tui s OB,SPO a - .1 co TABLE OF CONTENTS ATTACHMENT 3 I. Background ....................................................................................3 ' Il. Committee Membership ...................................:.............................3 Ill. Process......................................................:..........................:.........:4 IV. Evaluation Criteria...........................:..............................................4 V. San Luis Obispo's Strengths......................................:......:..........5 VI. Recommendations .....................................:...................................5 A. Primary Target Clusters .........................................................6 B. Secondary Target Clusters.....................................................7 VII. Primary Clusters Analysis.............................................................7 A. Computer Software/Multimedia Cluster .................................7 1 1 . Background............................................................:......7 2. San Luis Obispo Companies in the Cluster..................8 1 3. Area Skills and Resources................:...........................8 1 B. Light Manufacturing ................................................................9 1 . Background...:..........................................................:....9 2. San Luis Obispo Companies in the Cluster..................10 ' 3. Area Skills and Resources............................................10 ' C. Business/Customer Service Centers .....................................10 1 . Background................................._................._...............10 2. San, Luis Obispo Companies in the Cluster..................11 3. Area Skills and Resources............................................11 I Vlll. Marketing Strategies and Priorities..............................................11 IX. Secondary Clusters .......................................................................12 A. Comm unications/S ace Technology .......12 ' B. Tourism/Lodging/Recreation .......................................:..........13 X. Summary and Conclusion.............................................................14 Appendices I A. Council Agenda Report dated December 3, 1996 B. Introductory Memorandum to Committee dated February 7, 1997 C. Cal Poly 1995-96 Enrollment ATTACH11 NT 3 I. Background In November 1993, the.City Council received a report from its Economic Strategy Task Force (ESTE) recommending several strategies for enhancing the City's economic development efforts. With regard to business recruitment, the report stated the following: "With respect to industrial attraction, there is currently no specific strategy in place. The absence of such a strategy could create missed opportunities to attract desirable, environmentally sensitive industries capable of providing higher-end jobs to our underemployed citizens." In January 1994; the City Council adopted several of the 59 goals recommended by the Task Force. A business recruitment program, however, was not among these adopted goals. Instead, the focus of the program at that time was on the retention and expansion of existing businesses in the community. In developing the 1995-97 Financial Plan, the City Council adopted a Major City Goal to expand the Economic Development Program `with an emphasis on developing and implementing a business recruitment strategy." To do so, the Council adopted a goal to "develop and implement a business recruitment/economic development plan that identifies target industries matching the character, environment, employment and product needs of our residents." To implement this goal, the Council approved a workscope for completing a Targeted Industry Study, with the assistance of an ad hoc working group of local industry experts. This group became known as the Targeted Industry Cluster Committee (TICC). II. Committee Membership Committee members included: Art Aguilar, San Luis Personnel Services, President/Owner Stephen Barasch, Barasch Architects & Associates, Inc., Architect/Real Estate Developer Lauren Brown, JBL Scientific, Business Owner Loretta Doukas, Seagate Software, Director Natalie Diggins, Call America, General Manager Barry Floyd, Cal Poly, Professor Shelly Stanwyck, Chamber of Commerce, Director of Governmental Affairs Howard Gordon, Xing Technology Corporation, President Missie Hobson/Dave Trupe, PG&E, Managers Charley Senn, Patterson Realty, Realtor Ira Winn, retired Professor of Urban Studies 3 � -c � ATTACIaMEMT 3 ' III. Process ' The Committee met monthly following the work plan as outlined to the City Council. During the course of the meetings the Committee heard presentations dealing with: ' Long-term planning in the City of San Luis Obispo • City of San Luis Obispo zoning • Water availability and allocation • Economic outlook (based on the UCSB data) • Labor force ' • Cal Poly and Cuesta College resources • Published Targeted Industry Studies for San Luis Obispo County • Software company life cycles and employment patterns • Available sites and buildings for new or expanded businesses The time spent on background information was necessary in assuring that all ' participants had the same knowledge base. The Committee assumed that the recommended industry cluster's fit in with existing community goals and related plans, ' ordinances and regulations. While there was discussion regarding price and availability of land and regulatory issues and their impact on the ability to recruit new businesses, the Committee in general pursued the TICC Report recognizing current City policies. The Committee's approach utilized consultant business recruitment studies prepared for San Luis Obispo. County. The initial list of proposed clusters for the region included: • Electronics f • Biotech/Medtech • Software/Multimedia • Agriculture and Food Processing • Space Technology • Business Services • Light Manufacturing ' • Computer Manufacturing IV. Evaluation Criteria The Committee evaluated the list of potential targets to determine if they were appropriate fit based on the following criteria: • The growth of the industry • Environmental impact • Existing and available infrastructure • Availability of existing buildings and land ATTACHMEENIT 3 i • Local suppliers I • Non-local buyers • . Qualified employment market I • Water intensity • Land intensity - • Local resources and support V. San Luis Obispo's Strengths I In determining the strengths of doing business in San Luis Obispo, the Committee identified and consideredthe following attributes of the City: I • Quality of life • Lo;;ation - strategically located on Highway 101, midpoint between San Francisco I and Los Angeles • Abundance of skilled laborers including underemployed, degreed employees • Cuesta College and Cal Poly technical resources/expertise • Availability of San Luis Obispo County Airport • Financially sound City government • City government support for targeted industry clusters recruitment efforts VI. Recommendations After reviewing the resources of the City and comparing them with the proposed regional business targets, the Targeted Industry Cluster Committee (TICC) recommended a set of three (3) primary targets and two (2) secondary targets. It is believed that the City should focus its efforts on the primary targets and encourage the secondary targets as time and resources permit. The Committee concluded that a business decision to locate.to the Central Coast, and San Luis Obispo in particular, is motivated by a superior quality of life. Therefore, f maintaining the beauty of the area and the ambiance is important. Providing adequate physical infrastructure, particularly fiber access, and facilitating a knowledge-based economy are important elements. As the hub of commercial activity in the County, the Committee believes that San Luis Obispo is and will continue to be home to the majority of business support services such as legal, administrative, and accounting. The Committee also expressed the need for competitive contemporary retail operations within the City as a means to capture the multiplier rate of the new and existing business base. The Committee's research indicates that the assets of the City and the region appeal to a broad base of non-homogeneous niche market companies. Information supplied by the Committee indicated that many existing businesses located here because the principal had been a student at Cal Poly and chose to return, or perhaps had never left 5 �_� ATTACPME"T 3 the area. Therefore, the marketing strategy for each cluster presumes that the target market already has-some familiarity with the City of San Luis Obispo, either as a Istudent or a visitor. It was believed that the decision to locate a business or expand a business here is or I would initially be an emotional/subjective one, based on quality of life. A critical issue is maintaining a climate of growth for the prospective businesses. An additional factor is the affordability of the area as compared to our geographic target markets of San Jose; San Francisco, and Los Angeles. Retaining the businesses .in San Luis Obispo is believed to be a business decision based on operating costs. The Committee's recommendation presumes that the City would be proactive in recruiting targeted businesses to locate, supporting land, buildings, infrastructure, and housing to accommodate new businesses. The existing I Economic Development Marketing Plan is a pragmatic one, designed to facilitate the decision to retain, expand or attract a business here by being able to provide timely information to assist in the decision-making process. Direct mail has been tested I through the.Economic Development program to prospective industrial users, but most contact to date has been responsive and through business networking. The TICC proposes to elevate that effort. PRIMARY TARGET CLUSTERS 1. Computer Software/Multimedia I This cluster includes business application software, communications software, games and animation, and agriculture computer technologies. Common characteristics include an educated workforce, a creative environment, high-salaried individuals, and a desire for a superior quality of life. 2. Light Manufacturing/Light Industrial This cluster includes a wide variety of niche products from bicycles to medical technologies. The cluster is not homogeneous but has the common characteristic of the importance of quality of life to the owner/operator. 3. Business/Customer Service Centers Customer service centers have existed for some time and tend to be thought of as telemarketing centers, where wages and skill levels are typically low. A new market has emerged for customer service centers at a more technical level such as equipment installation, computer software, and some types of order fulfillment. Merry products are now sold through catalogues and also over the Internet. While most shopping . will probably continue to be done in person because of the socialization aspect, catalogues, television, and Internet shopping are becoming very common for niche markets and technical goods and services. As the public 6 CQ - DA ! J ATTACM.E.'3 3 utilizes more types of software programs to do their finances, plan their gardens, and make their travel itineraries, software companies have had to create Help Desks to provide support for users. SECONDARY TARGET CLUSTERS 1. Tourism/Lodging/Recreation l This cluster is and will continue to be an important part of the local and regional economy, but could potentially gain more market share. 2. Communications/Space Technology/Electronics ; The commercialization of technologies at Vandenberg Air Force Base provide an opportunity for a variety of high-tech and high wage rate companies. This industry is �1 perceived as a high-growth industry with greater importance to San Luis Obispo in s the future as the production processes become more environmentally sound. VII. Primary Clusters Analysis . A. Computer Software/Multimedia Cluster 1. Background The Central Coast of California is fast becoming a mecca for small entrepreneurial start-up software companies. These new companies have originated in San Luis Obispo due to their familiarity with the area, most likely from prior enrollment at Cal. Poly. The quality of life on the Central Coast, low crime rate, lack of commute, peer group of fellow software pioneers, and availability of intellectual talent from Cal Poly and Cuesta College has created a spawning ground for small software companies. These entrepreneurs require the vitality, synergism, and creativity of proximity to other technology buffs. The intellectual capital of San Luis Obispo is perceived to be the strongest natural resource for this cluster group. The growth of this industry has been in large part due to small and very small start-ups that hit the market for their idea at the right time. Within the overall umbrella of software is a multitude of types of software. The multimedia market is emerging to be a solid market. Multimedia is a combination of video; animation, still pictures, voice, music, graphics, and text into a single system. It also combines the industries: computers, software, consumer electronics, communications, publishing and entertainment. Peripherals, which include video and sound boards and CD-ROM drives, is expected to be the fastest growing category. [Y`15" 21 '7 -- ATTAR�t f•_ 2. San Luis Obispo Comaanies in the.Cluster The San Luis Obispo area has a number of companies that are in the ' software industry: Advanced Applications & Technical Services, ALH Group, Art Engineering, Atelier Pictures, CalAg.com, Call . America, Convergence Venture Partners, Copius Systems, Copytron, Dega Technology, Inc., Diagrammatic Programming Corp., Distinctive Solutions, Dover Pacific Computing, Inc., Experts Exchange., Inc., Export Planning Service, Fast Internet X.Change, IMAGE Multimedia, INACOM, Industrial t Peer-To-Peer, Inc., INET, Infinity Information Incorporated, Information Presentation Technologies, Inc., Intedink,. Management Information Control Systems, Miranova Systems, Moon Valley, Mosaic, NovaQuest, ' Oddworld Inhabitants, Outback Resource Group, Inc., Pacific Connections, Progressive Communications, Seagate Software, Sunset Gower Studios, Supermarket Kiosks, Inc., Systems and Software ' Consortium, The Grid, UUPIus Development, Virtual Reality Laboratories, Vtech Internet, Wynd Communications, Wavequest, Xing Technologies, Ziatech Corporation. 3. Area Skills and Resources Cal Poly State University, College of Engineering, is expected to grow to 4,500 students. The Computer Engineering Department and the ' Computer Science Department have a total of 810 undergraduates. (Additional graduate information is addressed in Appendix C.) The Management Information Systems concentration of the Business College focuses on designing software applications for business. The approximate 200-plus undergraduates have practical application experience as the University requires extensive hands-on training through internships, co-ops and senior projects. San Luis Obispo companies have an abundance of talented individuals available and trained on the latest technologies. Also; the faculty at Cal Poly provides expertise to local industry. Softec, the Central Coast Software & Technology Association, is a local trade organization to support this industry and provide a forum for the members to stay abreast of the newest technologies and trends. The San Luis Obispo area has a. strong link of fiber and telecommunications networks. Virtually every area of the community has access to cable for computer applications. 8 a �a3 • Start-Up Software Companies To market to this niche is difficult because they tend to be home-based and" not networked With the traditional business groups. The path to success for this niche appears to be to maintain the creativity vital to their design needs, to have a local industry association for members to have a context in which to stay abreast of the latest trends in technology and to have sources of capital available to them. Recruitment/Large Company Spin-offs This niche would require identifying large software companies that would be able and willing to spin off a small group of the creative people to maintain their creativity. This concept would have to overcome corporate resistance to satellite offices and the corresponding administrative costs. However, it was. recommended that it be pursued to determine its feasibility. It was acknowledged that this strategy does recruit people as the core component of the business and that attrition would provide positions for existing residents. Recruiting software companies was perceived to be challenging due to the many different kinds of software products and the companies' need to be near their client. It was believed that the most likely candidate would be a company that produced a product that was specific as to its desired use by the purchaser, easy to install and use, and did not require a high degree of customer interaction. For companies specializing in highly customized products need to be near the customer; the geographic location of San Luis Obispo would not be an asset to those companies. Differentiating companies to find this niche was perceived to be difficult. It p was determined that it was more important to make it easy for them to find San Luis Obispo rather than for San Luis Obispo to find them. B. Light Manufacturing 1. Background Light manufacturing includes a wide variety of businesses from guitar manufacturers to the printing of labels for wine bottles. Many of the existing manufacturers locate in the city for personal reasons. While their products are not similar, they share the characteristic of being relatively small, shipping nationally and internationally, and being an independent in a very niche market. It is important to recognize that while the decision to locate or start up in San Luis Obispo is an emotional one, as companies become more 9 successful -and are either bought or need to expand, attitude .and operating costs become more .important. For example, many small I sporting good ' manufacturers begin manufacturing in one location and then move to manufacture an existing or knock-off product offshore, impacting their sales. This group is heavily dependent on manufacturing ' space and availability of developed land. This cluster is seen as a basic stabilizer to the economy and also balances the software industry. I2. San Luis Obispo Companies in the Cluster Companies that fit into.the light manufacturing area include: R. Howard I Strasbaugh, Spice Hunter, Nth Degree Inc., Mountain .Cycle, GLA Agricultural Electronics, SAES Pure Gas, Cole Surfboards, Dove Systems, Light Control Instrument, JBL Scientific, Calzyme and Wallace Computer Services.. 3. Area Skills and Resources IThe light manufacturing industry has an association which provides peer I support and business assistance, the Association of Manufacturers and Distributors. In addition, the Cal Poly Colleges of Business and Engineering have a joint program to aid manufacturers, the Engineering I Management Program. At Cal Poly, Industrial Engineering and Manufacturing Engineering are courses of study that offer majors programs, with 60 students graduating from these majors last year. Cuesta Community College has programs designed to meet local manufacturing companies' needs, such as the Small Business Assistance Center, which provides small business assistance and training. In I addition, Cuesta Community College is the home of the Institute for Professional Development. With the increased need for business to produce their products more efficiently and to market them widely, the programs available through both Cal Poly and Cuesta College actively support the light manufacturing economy. C. Business/Customer Service Centers 1. Background This is a growing industry as business services from how-to-install- software to order fulfillment are handled over the computer or the telephone.. While historically looked upon as low wage jobs, the sophistication of companies utilizing customer service centers has grown, reaching virtually all industry groups. Of particular interest for 'San Luis Obispo may be software-related customer service centers. Many products are now sold through catalogues and the Internet. While most shopping will probably continue to be done in person because of the socialization aspect, catalogues, television, and Internet shopping are becoming very common for many niche market and technical goods and .services. As the public utilizes more types of.software programs to do their finances, plan their gardens, make travel itineraries, etc., software companies have had to create Help Desks to walk people through any problems that may arise. 2. San Luis Obispo Companies in the Cluster Call America operates a Customer Service Center and an Operator Center. . 3. Area Skills and Resources Customer service centers do represent an industry that can pay a "head- of-household" wage, as well as above-average wage rates on a part-time. basis. Many customer service centers utilize part-time employees due to the need to keep the employees "fresh". This cluster could take advantage of the part-time employment base represented by the student population as well as provide flexible work hours for individuals seeking only part-time employment. Cal Poly's reputation for computer training and skill levels could be a strong asset in recruiting. The type of space required may also be consistent with the City's desire for a compact urban area. The industry typically does not need to be in a specific geographic area. Because of the part-time employment, frequently on a 24-hour basis, the industry may require bus service for their employees, which is available in San Luis Obispo. Additionally, virtually every portion of the city has the telecommunications infrastructure necessary for this industry. VIII. Marketing Strategies and Priorities Current strategies to continue and improve: • Pursue the annexation of enough Airport area to providean inventory . of land for business expansions/relocations. I • Assure "internal readiness"to process permits for targeted industries in an organized and timely fashion. • Maintain up-to-date and concise information packets for targeted I business recruitment. • Maintain and market the ambiance, quality of life, and environment of San Luis Obispo. • Continue to support and participate in the various local and regional industry-specific organizations and associations. C Develop stronger networking linkages with Cuesta College and Cal I Poly. 11 a' L% ATS 5 fICihP:9Ei''3 3 I • Identify and consider participation in industry trade shows in the Bay Area or the Los Angeles area. I Continue outreach and networking with local brokers, developers, and other intermediaries including accountants, lenders, and attorneys. Continue to support and participate in regional marketing efforts Iincluding the Economic Vitality Corporation of San Luis Obispo County (EVC). Fund the EVC's (Countywide) Revolving Loan Fund. INew strategies to pursue as priorities: I . Develop industry cluster-specific web pages with linkages to other appropriate web sites. Pursue organizing a "Welcome Back Weekend" for Cal Poly Alumni. I who own or who are executives in the cluster industries. • On occasion, utilize "Red Teams" composed of City and private sector representativesto attract priority industries to San Luis Obispo. I • Pursue with all interested parties an air link from San Luis Obispo to San Jose. • Encourage commercial brokers to develop a multiple-listing, or to I otherwise keep the Economic Development Manager apprised on building space availability.. • Encourage joint efforts between the private sector, the City, the ICounty, and regional business-marketing interests. Other new strategies to pursue: . I • Support the creation of a private sector venture capital group. Support the development of incubator space. I IX. Secondary Clusters IA. Communications/Space Technology/Technology Space Technology appears in the countywide target principally due to the proximity of Vandenberg Air Force Base. The county study concluded that the commercialization of space technologies provided numerous I private sector opportunities. The critical issue would be whether San Luis Obispo could capture a significant market share of the industry or whether the industry would cluster in Santa Barbara or Santa Maria. IThe space commerce industry consists of five major areas of space- related goods and services: commercial space launches, satellite communications equipment and related services, satellite remote sensing, materials research and processing in space, and space-based private R&D facilities. I 12 Ai PAC F The bulk of revenues from space commerce comes from satellite communications which includes satellite manufacturing, satellite services, and the sales of earth station equipment. This reflects the rapid growth of new satellite services and ground equipment created by new technologies. These new technologies include mobile services and equipment for.vehicle tracking and navigation positioning as seen in the newer luxury automobiles. The U.S. satellite manufacturing industry is expected to continue producing at a high level for the next couple of years, due mostly to the replacing of older satellite that have come to the end of their operational lives. Also on the rise is the market for direct-to- home pay-TV broadcasts. The. electronic components and equipment and accessories industry is composed of electron tubes, printed circuit boards, semiconductors and diodes, capacitors, resistors, coils and transformers, connectors and electronic components. The demand for electronic components comes primarily from the computer, telecommunications, medical equipment, and transportation industries. Increased demand for computers, .communications equipment, and electronic automotive devices will support the growth of this industry. Also, the demand for higher performance products will drive the industry to place a premium on compatibility among products. B. Tourism/Lodging/Recreation One of the principal sectors of the local economy is tourism. Due to the geographic location on the Central Coast of California, the area has long been a stopover for people traveling through the area. With the charm of the downtown, the proximity to beaches, Hearst Castle, wineries, and many special events and festivals, tourism plays an important part of the economy. San Luis Obispo is in a unique tourism position due to the availability of university students as temporary tourism workers. If San Luis Obispo did not have tourism, the student population would have very limited employment opportunities, and the tourism industry would not have this ready supply of entry level workers.. The importance of the wineries to the economy and ambiance of San Luis ' Obispo cannot be underestimated. Although the grape-growing areas are largely outside the city limits, the wineries have an important tourist draw which rebounds to the benefit of the San Luis Obispo economy. The San Luis Obispo tourism industry has the benefit of being at the intersection of Highway 101 and Highway 1 and also the site of a staffed train station. An issue to be addressed is to assure transportation from the 13 railroad station to hotels and motels in the area. The availability of surface transportation is stated in marketing materials and advertorial copy. Most of the San Luis Obispo visitors are from California with over 50% being repeat visitors. The goal .of the tourism cluster should be to get more destination resorts and lengthen the time of stay. To utilize the existing rooms to their fullest extent and reduce mid-week vacancy rates, it is important to have a small conference center. Cal Poly is evaluating the potential for an alumni/continuing education and conference center for the university that could be of benefit to the tourism sector. The San Luis Obispo Visitors and Convention Bureau promotes tourism county wide with the Chamber of Commerce promoting tourism to the City. The City also has its own contract (presently with Barnett, Cox & Associates). The Chamber of Commerce also provides public relations and order fulfillment for tourist needs on a contract basis for the City. The City of San Luis Obispo has a Promotional Coordinating Committee that provides funding for special events, advertising and managing of contracts with the Visitors and Convention Bureau, the Chamber of Commerce, and the City. The Chamber also staffs the Tourism Council, an industry group of hospitality providers, tour operators and special venues. 1 The Tourism Council promotes coordination of signage issues, special events such as large convention management, transportation issues, fiscal issues, training needs of the local hospitality industry, and many other issues impacting the tourism industry. X. Summary and Conclusion In summary, the Targeted Industry Cluster Committee has made numerous important conclusions: • To be successful in recruiting business, San Luis Obispo needs to focus on tcommunity preparedness and an effective and targeted marketing program. • Create programs and incentives authorized by City Council for expanding businesses and new businesses. . • Most existing companies decisions to locate to San Luis Obispo have been historically emotional decisions, based on the unique quality of life found in our City and environment. The recruitment of new companies relies on creating a critical mass of businesses. • Decisions to stay in San Luis Obispo tend to be based on operating costs. 14 a - � i ,llo ]il o. _._ iJ I As companies grow and ownership changes, the emotional tie may be less important but-the intellectual capabilities of the employees grows in value. I Cal Poly and Cuesta College. are two of the strongest resources the City has in recruiting new companies and the City needs to strengthen the connection with the education community. • Businesses providing a product that does not require a high degree of customer interaction'are most likely to locate in San Luis Obispo. The marketing plan needs to appeal to the high.-tech prospect. Allocate sufficient human and financial resources to implement the TICC Marketing Plan. In conclusion, the Committee supports identifying priorities to be pursued in the City's efforts to attract new businesses to the community. Therefore, the Committee advocates that the City encourage the addition of the businesses identified in the primary and secondary target clusters when considering expanding the City's economic base. The Committee believes that the aforementioned "clusters" would complement the existing,base of businesses presently located in the City. Additionally, the Committee believes the clusters consist of the type of industries that are compatible with the community and which will create the kinds of'"base level" jobs needed in San Luis Obispo. Identifying the recommended Targeted Industry Clusters is just the initial step. The next steps are to implement the TICC marketing strategies and to evaluate the progress and success. Therefore, the TICC recommends that the group remain as an Ad Hoc Committee that will meet occasionally to evaluate the progress of the proposed marketing strategies. Finally, the City should continue to coordinate regional marketing activit;as with the Economic Vitality Corporation of San Luis Obispo County. I The participation of the members of the Committee has been invaluable due to their industry-specific knowledge. As the effort moves into the implementation phase, the knowledge of the cluster industries will make the difference in the success of the program. I I 15