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HomeMy WebLinkAboutCity of Huntington Beach Economic Development Strategy - 10- Council/Agency Meeting Held: 9S Deferred/Continued to: _ LU Approved ❑ Conditionally Approved ❑ Denied &46ty Clerk's Signature Council Meeting Date: December 4, 1995 Department ID Number: ED 95-49 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, City Administrator/Executive Direc �' ._ PREPARED BY: DAVID C. BIGGS, Director of Economic Development X0 SUBJECT: APPROVAL OF ECONOMIC DEVELOPMENT LONG--RANGE OPPORTUNITIES AND CONSTRAINTS ANALYSIS ITStatement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments) Statement of Issue: The City of Huntington Beach has a stated goal to improve the economic base of the City. Working through the consulting firm of Cunningham and Associates, City staff, with input from the business community, prepared various studies outlining future direction for the City. On October 16, 1995, the City Council approved the City's first Economic Development Strategy, which is an overall plan for the immediate and mid--term time frame. On November 6, 1995, the City Council approved the Edinger Corridor Market Study, an action plan for one of the City's major retail areas. The.attached Economic Development Long--Range Opportunities and Constraints Analysis, approved by the City Council Economic Planning Committee on November 17, 1995, deals with additional long--term areas on which the City can focus to improve its economic future. Funding Source: None as a result of this action Recommended Action: Motion To: 1. Adopt the recommendations contained within the Opportunities and Constraints Analysis. 2. Implement recommendations in priority order according to availability of funding and staff. Alternative Action(s): 1. Do not adopt the Opportunities and Constraints Analysis. 2. Direct staff to revise and/or modify the Opportunities and Constraints Analysis. REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: December 4, 1995 DEPARTMENT ID NUMBER: ED 95-49 Analysis: The City is currently embarking on a process to more actively encourage economic growth through policies and tools contained within the recently approved Economic Development Strategy and Edinger Corridor Market Study. What has not been fully addressed is where Huntington Beach should be headed in the future based on its relative strengths and weaknesses; that is, how the City can best position itself for tomorrow's ever changing, highly competitive economic marketplace. This is the role of the Long--Range Opportunities and Constraints Analysis, attached with findings and recommendations summarized as follows: OPPORTUNITIES: • Business Growth Revolving Around "High Tech Clusters" • Health Care and Ancillary Support Services • Tourism Cluster • Entertainment Retail • International Trade and Commerce • Regional Opportunities LIMITING FACTORS: • Lack of Clear Community Identity • Current Community Image • Difficult Access and Restricted Visibility • Shortage of Home Grown Jobs • Relatively Weak Local Tax Base • Lack of Public Financial Resources RECOMMENDATIONS: • Implement new business attraction and retention efforts of firms in the targeted clusters and emphasized areas, such as entertainment/retail and international trade, through a coordinated marketing program incorporating the following tools: Community information packet Print and broadcast media Business retention interviews and employer satisfaction surveys Tours and site visits for business prospects Participation in trades shows and trade missions • Join forces in collaborative ventures with Chamber of Commerce and Conference & Visitors Bureau to encourage international business activity in Huntington Beach using: Red Team Direct mail/trade shows/trade missions RCA9549.DOC -2- 11/22/95 8:10 AM w ® ® ®pq REQUEST FOR COUNCIL/REDEVELOPMENT MENT AGENCY ACTION MEETING DATE: December 4, 1995 DEPARTMENT ID NUMBER: ED 95-49 Attachment(s): . Long--Range Opportunities and Constraints Analysis RCA9549.DOC -3- 11/21/95 9:45 AM Cunningham & Associates MUNICIPAL MANAGEMENT CONSULTING 0 sic ever Submitted to: The City of Huntington Beach September, 1995 673 Vista Bonita ' Newport Beach,California 92660 ' 714/644-7304 ' FAX 714/644-9357 �1 t TABLE OF CONTENTS Page 1. Introduction.........................................................................................................3-4 2. Background......... ......................... ............................4-6 ........................................... 3. Future Vision.....................................................................................................7-10 4. International Trade....... ...................................................................................10-13 5. Conclusion............................................................................................................14 1 J; ATTACHMENTS Page A. Huntington Beach Vicinity Map........................................................................15 2 INTRODUCTION In recent months, the City of Huntington Beach has been reviewing several key plans and strategies which have contributed to a more thorough understanding of the local economic base on the part of policy makers and city administration. The studies offer a cogent statement of community economic development goals and objectives, as well as challenges faced by the City at the current time. These documents include: • City General Plan -Land Use Element -Economic Development Element • City Economic Development Strategy • Edinger Corridor Economic Market Study Taken as a comprehensive blueprint for community economic development in Huntington Beach, the General Plan, Economic Development Strategy, and Edinger Corridor Study provide general long-term development guidelines, as well as more immediate implementation strategies for improving the City tax base, creating quality employment opportunities, and filling gaps in the local economic base. What has not been fully addressed by these analyses is a future vision for where Huntington Beach should be headed in terms of economic development "opportunities and constraints", or, based on its relative strengths and 3 weaknesses, how the City can best position itself for tomorrows ever changing highly competitive marketplace. The following report represents an effort to evaluate the City's long- range future in order to identify the most appropriate and productive directions which can be taken to optimize achievement of the City's overall economic development goals. BACKGROUND The foregoing strategic planning documents present a framework and set parameters around which a broader vision for the City's future can be articulated. Each of the plans emphasizes one or more key objectives, policies, and/or recommendations which help point the way toward where Huntington Beach should be directing its future economic development energies: 1) Land Use Element "Accommodate the development of a balance of land uses that (a) provide for the housing, commercial, employment, educational, cultural, entertainment; and recreation needs of existing and future residents, (b) provide employment opportunities for residents of the City and surrounding subregion, (c) capture visitor and tourist activity, and (d) provide open space and aesthetic 'relief from urban development". (Objective LU 7.1). 4 2) Economic Development Element • "Seek to capture the'new growth'businesses such as, but not limited to: -Telemarketing; - "Shop for value" or"big box" stores; -Entertainment-commercial developments; -Knowledge-based retail and entertainment-information retail uses; -High sales tax producing businesses". (Policy ED 2.4.2) • "Seek to capture'new growth'industries such as, but not limited to: - Knowledge based industries (higher technology communications and information industries); - Communication industry service providers and equipment manufacturers which are creating the next series of consumer and utility company equipment and services; - Biotechnical industries; - Environmental technology; and - Point of sale industries". (Policy ED 2.5.2) 5 3) Economic Development Strategy • "Develop a site-specific marketing program, utilizing all available economic development tools including the 'Red Team' recruitment approach to attract business, especially targeted firms in the identified High Tech and Tourism clusters to available properties". (Recommendation 3) • "Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's long-range future in terms of 'Opportunities and Constraints', particularly as related to international trade and commerce". (Recommendation 9). • "Work in partnership with private business community on a regional basis, through the Orange County Business Council/Economic Development Consortium, to attract targeted new business". (Recommendation 22). 4) Edinger Corridor Study • "Implement a retail tenant marketing campaign targeted toward large discount retailers, movie theaters, and restaurants". (Recommendation 1). • "Encourage expansion and redesign of the Huntington Beach Mall around an entertainment/retail theme with buildings physically oriented more toward Edinger Avenue". (Recommendation 4). 6 FUTURE VISION Several recurring themes emerge from the previously described economic development plans and analyses which can serve to help illuminate Huntington Beach's long range vision. Among the areas of opportunity which present themselves for the future are: • Business growth revolving around the "High Tech Cluster" including research and development, manufacture, and marketing/sales of products and services related to computers, electronics, measuring instruments and devices, and medical equipment/bio- technology. • Increased emphasis on provision of health care services, including medical office and ancillary support services. • Business attraction and retention related to the "Tourism Cluster" including recreation, lodging, retail sales, and scientific research and education related to oceanography, marine biology, and ecology as well as surfing, and other water sports. • Shopping and dining around an "Entertainment Retail" theme focused on the City's primary retail anchor districts -Downtown and the Edinger Corridor. • Expansion of international trade and commerce development related to regional attributes defined in terms of Orange County's reputation as a high technology business center, and major tourism destination. • Economic development opportunities related to close geographic proximity to Los Angeles/Orange County regional international trade resource network. 7 In order to successfully achieve its economic development goals, Huntington Beach must address certain community constraints while, at the same time, taking full advantage of its significant attributes. Limiting factors.include: • Lack of a clear community identity: "Is Huntington Beach business friendly, or rather, simply an exclusive beach enclave?" • Community image predominantly related to youthful, boisterous beach/surfing crowd: "Can Huntington Beach be taken seriously as a business center?" • Difficult access and restricted visibility from major transportation corridors. • Shortage of"home grown"jobs, as well as quality employment opportunities, currently available within the community. • Relatively weak local tax base, particularly in regard to retail sales and shopping amenities. • Lack of sufficient public financial resources to effectively provide services, and offer business incentives. Clearly, any perceived negatives related to Huntington Beach are far outweighed by its obvious advantages as a place to live, work, and play. The challenge lies in adequately packaging community attributes in a way which "sells" to business prospects, thereby addressing any doubts or concerns as to the City's viability as a business location. 8 Huntington Beach has begun to initiate this process through the formation of a high level "Red Team" comprised of top business executives who live and/or work in the community. These individuals offer a tremendous resource in terms of their contacts, experience, and ,motivation to contribute to the City's emergence as a regional business center. Spearheaded by the City Council Economic Planning Committee, this group has held one introductory meeting where the City's general direction - i.e. perceived "opportunities and constraints" - and the Economic Development Strategy were discussed. The consensus of opinion among those in attendance was that Huntington Beach needs to aggressively market and promote itself as a business location to targeted corporate prospects. Tangible economic development incentives, with measurable savings to the business in terms of time and money, need to form the basis of the City's package. The Red Team members agreed to lend their names and support to future marketing campaigns, serving in the capacity of ambassadors to Huntington Beach. Testimonial endorsements of this kind have traditionally been recognized as one of the very highest and most credible forms of community promotion. New business attraction, as well as retention of existing Huntington Beach firms, in the targeted clusters and emphasized areas such as entertainment/retail and international trade should be implemented through a coordinated marketing program incorporating the following tools: 9 1 • Community Information Packet detailing basic economic/demographic data and economic development incentives for business, along with information on schools, shopping, and employment opportunities. • Print and broadcast media Advertising Campaigns aimed at targeted business prospects in identified clusters and geographic areas. • Business Retention Interviews and Employer Satisfaction Surveys focusing on existing firms. • Business Attraction Mailers directed toward new business prospects, followed up by personal phone calls to key decision-makers. • City Tours and Site Visits for serious business prospects. • Participation in business trade shows and trade missions targeted toward specific areas such as retail trade or export development. INTERNATIONAL TRADE With its strategic Pacific Rim location and close proximity to the largest U.S. Customs Port of Entry at the Ports of Los Angeles and Long Beach, Huntington Beach is in the perfect position to capitalize on international trade opportunities directly related to the High Tech and Tourism clusters, with spin-off benefits accruing to the Entertainment Retail sector. In addition to the Long Beach and Los Angeles seaports, the vicinity is well served by the Los Angeles International (LAX), John Wayne/Orange County and Long Beach airports, and a 10 sophisticated freeway and rail transportation network among the world's largest. The Orange County region, in particular, has emerged as a U.S. leader in the fields of bio-technology, computers, and electronics. These and related areas possess tremendous potential for increasing exports of American-created goods and services on a worldwide basis. A number of conveniently located business development organizations and agencies related to international trade and commerce currently cover the Orange County region. These include: • World Trade Center Association of Orange County(Leine) • Orange County Economic Development Consortium- International Committee (Irvine) • U.S.Department of Commerce - International Trade Administration and Bureau of Export Administration (Newport Beach) - SBA District Office(Santa Ana) -Foreign Trade Zone No. 50(Long Beach- Santa Ana) • Greater Los Angeles World Trade Center(Long Beach) -U.S. Export Assistance Center - SBA Export Assistance -California Office of Export Development • California Export Finance Office(La Palma) 11 International trade and export assistance entities such as those referenced above can be instrumental to existing Huntington Beach-based firms in opening new market potential for the sales of their products and services. In addition, new firms operating in the international arena can be attracted to a Huntington Beach location as a direct result of the availability of such resources, coupled with the abundance of business opportunity in the High Tech and Tourism cluster areas. As indicated by the attached map, Huntington Beach is situated near. the center of the Los Angeles area international trade resource network. By virtue of this strategic location, the City is situated literally at the hub of international trade activity for the Los Angeles/Orange County area. According to Jack Kyser, Chief Economist of the Los Angeles Economic Development. Corporation: "International trade continues to set the pace for the economy of the Los Angeles five-county area. In 1994, two-way trade value surged ahead 13.5 percent and growth during the first quarter of 1995 was moving along at.a sizzling 20 percent pace. 1994 was also a landmark year for the Los Angeles Customs District, as it moved past New York to become the nation's top customs district as measured by value of two-way trade." The foregoing information serves to illustrate the tremendous economic development potential which Huntington Beach is offered by way of international trade. In order to take advantage of this area of opportunity, City government, the Chamber of Commerce, and the 12 The foregoing information serves to illustrate the tremendous economic development potential which Huntington Beach is offered by way of international trade. In order to take advantage of this area of opportunity, City government, the Chamber of Commerce, and the Conference and Visitor's Bureau need to join forces in a collaborative venture specifically aimed at encouraging international business activity in Huntington Beach. Utilizing the aforementioned marketing tools, and led by the corporate "Red Team", the international trade program should actively seek out existing as well as new business firms. showing potential for expansion into world markets, especially related to the locally prominent High Tech and Tourism clusters. Incorporating a theme such as "The Smart Choice,"the campaign should endeavor to make contact with existing as well as new firms who could profit from international trade development. Once contact has been established, either through direct mail, trade shows, or trade missions, the program should strive to demonstrate Huntington Beach's strategic advantages in terms of its highly trained and educated labor pool and proximity to the regional international trade technical resources, which are centered in and around Orange County, rather than Los Angeles. The city's scenic natural shoreline environment and attractive residential areas can serve as "icing on the cake" for business prospects who have already acknowledged the strategic advantages of a Huntington beach location. 13 CONCLUSION The "Opportunities and Constraints Analysis" is an attempt to identify and chart future economic development initiatives on the part of the City of Huntington Beach and its business community. Revolving around the targeted High-Tech, Tourism, and emerging product/services clusters named in the citywide Economic Development Strategy, the current analysis recommends an additional future focus on the growing areas of international trade and health care services which are centered in Orange County. Due to its key location and amenities, both for business and living, Huntington Beach is poised to derive significant benefits from regional international trade development. 14 ..................... .................... AttachmentA I� � IlAtlln�� c►s i -Y ��L(i -1� � .� { � �-- 1.� 1 11•� �, +� r ` 1111111111.- IR, L�IHh�IIIIIIIL�ii -•:���1� (=�17i1 €T h_ IJi=111-sa �._.� 12y1��.��11���t 1 1111�%iJ..�f, ��� I�J�11 i�wl.�- -�� �• ������•a .., I,vtN?�I)h'•� '� ,/ ._II_ .cam.... -, , ,.i.• 11�t- tlNnal'1' >.I„I<I 1.11111��111�'111111111111111� na Fpps�` nt .:SIG!='��'i'ai ._�i�5_ � 11� wr.�IAt�►•:`:• v�s���'Z! 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III��II..V..m 'f� i1 A•.,1►1; � , �► y .•41f r �L �E m,�IILn'I�I �ti���.i�� �7♦\`\ �n""1 «I ��IllYn►:�I�+rR'► Ali` °' �`,S�'v i - " `t�Il 'r' {��"�Yil� -tll 111,' I,FI:•�1Qro-.�A y �'�P� _ ��I�1a711�1 �I���IIII�'�ci �iF`�i,�e.� r . �i �I �t 5�11•i�ir•� 1.`E/��.s I�grs 1 1 1 � , *.- IIII �•■ � \+•�+ �.\� ��'/��� �6%��= I 1 1 1 1 I I I :II RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of Economic Development Long Range Opportunities and Constraints Ana Isis COUNCIL MEETING DATE: December 4, 1995 RCA ATTACHMENTS : :STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Attached Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FOR RDED Administrative Staff Assistant City Administrator Initial City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: if Clerk s Use Only) (Below$pace For Citj } F ND MADE A PART OF THE RECO THE COUNCIL MEETING OF /Z_-%S OFFICE OF THE CITY CLER-K CONNIE BRO(6XWAY,CITY CLERK Long-Range Opportunities and Constraints Analysis December, 1995 1 Goal ® To determine future vision for City Where we should be headed in terms of economic development, based upon relative strengths and weaknesses. 2 Background • "Final" Component of Written Plans • Economic Development Element-- straw votes from Planning Comm. • Economic Development Strategy-- Council approved 10/16/95 • Edinger Corridor-- Council approved 11/6/95 3 Methodology ® Hire Cunningham & Assoc. - February, 1995 ® Input from "Red Team" ® Recommended by City Council's Economic Planning Committee on 11/17/95 4 Opportunities 'i • High Tech. • Entertainment Clusters Retail • Health Care • International • Tourism Trade/Commerce • Regional Opportunities 5 Limiting Factors • Lack of Clear • Limited Identity Employment • Community Base Image • Lack of Public • Access/ Visibility Financial • Weak Tax Base Resources 6 Recommendations • Target Business Retention and Attraction Toward Clusters, incorporating following : — Community Information Packet — Print/ Broadcast Media — Retention Interviews/ Surveys —Tours/ Site Visits/ Trade Shows/ Missions 7 More Recommendations ® Collaborate with Chamber and C&VB to encourage international business in the City, using: — Red Team — Mail/ Trade Shows/ Missions 8 -CConnie Brockway ;• ilk° CITY OF I�l�lt TINGTON BF—AC" Clerk INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH �^1 ' a C«1 , 7 Y TO: Honorable Mayor and City Council ' FROM: Michael T. Uberuaga, City Administrato / .�_ BY: David C. Biggs, Director of Economic Development DATE: November 1, 1995 SUBJECT: ECONOMIC DEVELOPMENT STRATEGY Attached is a copy of the City's first Economic Development Strategy, recently approved by the City Council. This document contains programs_and priorities to enhance the City's economic base. These programs will be implemented over the next three to five years. If you have any questions please do not hesitate to call me or Jim Lamb. xc: Ray Silver, Assistant City Administrator Department Heads Jim/ecdevstg Curningharn & Associates NWMaPAL MMGEWM CONSUMNG ....... ...... .......... . ........... ............ .......... .......... .............. .......... ... ................ .... .. ....................... .. ... .. . . ... . ..... .. . .... . . . .. ....... .. . . .... ... ....... .................... Prepared by: Cunningham & Associates August, 1995 673 Vw4a Bonita Newport Beach,CaUfm"92660 714(644-7304 FAX 714/644-9357 Table ®f'Contents Page ExecutiveSummary............................................................................................................1-7 Introduction......................................................................................................................8-10 Part I a Community Economic Base Analysis Relationship of Economic Development Strategy to City General Plan.........................................................................................11-15 Regional Economic Perspective.....................................................................................15-21 RealEstate Trends..........................................................................................................22-24 Reliance on Retail Trade Sector.....................................................................................25-29 Part II-Marketing Plan for business Attraction and Detention CityCouncil Policy Role......................................................................................................30 City of Huntington Beach Economic Development Program.........................................30-32 Focus Group Discussions...............................................................................................32-37 Cluster Driven Business Attraction and Retention..........................................................3740 Economic Development Incentives................................................................................40-48 Recommendations.......................................... ...............................................................49-54 Reference Tables Pa e 1) Greater Los Angeles Area Regional Population/Employment Ratios...................................................................................17 2) Major Orange County Business/Industrial Sectors......................................................19 3) Locational Quotients, Orange County/U.S..................................................................20 4) Basic Orange County Business/Industrial Subsectors.................................................21 5) Manufacturing-Distribution/Research and Development Space Inventories Vacancy and Absorption..........................................23 6) Office Space Inventory Vacancy and Absorption........................................................24 7) Retail Space Inventory Vacancy and Absorption........................................................25 8) Retail Sales Activity-Major Orange County Cities....................................................27 9) Taxable Retail Sales Orange County,West County Cities..........................................30 Attachments Em 1) Shopping Center Market Analysis.................................................................... 57 2) Shopping Center Locations.............................................................................. 59-66 3) City of Huntington Beach Economic Development Programs......................... 68-71 4) Economic Development/Redevelopment Services Budget/ Staffing Comparisons.................................................................................,.... 73 5) Schedule of Public Discussion/Input to the Planning Process......................... 75 6) Questions and Answers on Economic Development Strategic Planning........ 78-79 7) Focus Group Survey....................................................................................... 81 8) Comments By Chamber's Focus`Bu siness Group"....................................... 83-86 9) High Tech Cluster by SIC Code/Tourism Cluster by SIC Code............. 88-89 10) Financial Incentives: Debt Instruments.................................................... 91 11) Economic Development Zones- Summary of Benefits/Incentives............ 93-94 w�. 12) Comparison of Development Fees and Tenant Costs................................ 96 13) Economic Development Incentive Criteria for Financial Assistance.......... 98-102 Executive Summary The City of Huntington Beach Economic Development Strategy is divided into two major sections identifying our position in the Greater Los Angeles Area regional economy and laying out a marketing plan. The aim of the marketing plan is to: (1) attract desirable new businesses and industry, and (2) retain existing employers on a targeted basis. The effort identifies the City's fundamental economic development mission: "In order to promote business and create new jobs, develop an aggressive program that would use entrepreneurial approaches to attract and retain commercial and light industrial businesses, high-tech manufacturing and retail business." The Strategy strives to address the following economic development issues, and relate each to specific "Higher Priority" recommendations listed at the conclusion of the document. 1 Community Attributes • Challenge How to identify and package the essence of what makes Huntington Beach the ideal location to live, work, and play. • Response Concentrate economic development efforts on selling Huntington Beach's unique blend of tourist and recreation-oriented amenities related to its ocean beaches and natural environment, coupled with its vast high-tech business potential related to low taxes, an 1 affluent, highly trained labor pool, and ample supply of quality housing available to all income levels. Ma • Related Recommendations - Expand cooperative ventures and relationship with Huntington Beach Chamber of Commerce aimed at both retention of existing business and attraction of new business. - Work with the Conference and Visitor's Bureau to attract more tourists and visitors to Huntington Beach in keeping with the Tourism Cluster theme, and construct more hotels so the tourists can stay in Huntington Beach. - - Expand the successful Mayor's Business Forum and Industrial Interview Program as a means of promoting business retention by addressing business needs prior to any relocation decisions being made. 2) Clusters ® Challenge How to encourage existing business expansion and new business attraction which accrues the highest economic development benefits for Huntington Beach. 2 • Response In addition to generalized business expansion and tourism/visitor promotional efforts, focus business attraction and retention activities upon identified "Tourism" and "High Tech" clusters, as well as'expansion of the retail trade sector of the local economy. • Related Recommendations - Develop a site-specific marketing program, utilizing all available economic development tools including the 'Red Team" recruitment approach, to attract targeted firms especially in the identified High Tech and Tourism Clusters to available properties. - Establish a Real Estate Broker Network to apprise local commerciaVindustrial brokers of current City plans and policies, while taking advantage of thee- expertise and business contacts to attract and retain business in the community. - Concentrate on attracting and retaining job and tax generating tenants in the High Tech Cluster, particularly related to subcontractors and suppliers to the McDonnell Douglas Corporation facility. h.' 3) Targets 0 Challenge How to effectively P focus upon the most favored business/industrial clusters. 3 • Response Utilizing a market segmentation approach, target incentives towards individual firms and evaluate the relative cost/benefit to Huntington Beach in terms of: - Economic benefit - Tax base enhancement Public financial investment Targeted"Cluster" Catalyst Effect • Related Recommendations - - Target business attraction efforts toward firms operating within the incorporated boundaries of the City of Los Angeles due to their inordinately high tax burdens. - Undertake a Restaurant Attraction Program to bring more fine dining establishments to Huntington Beach, especially in the downtown area. - Actively seek to attract major retail tenants, including movie theaters, to the Edinger Corridor area and Huntington Beach Mall. - Strive to attract the highest sales tax-generating uses to available vacant or under- utilized sites located in Commercial zones. 4 4 Priorities • Challenge How to effectively prioritize the many economic development options currently at hand for Huntington Beach. • Response Utilizing available marketing tools and financial incentives, adopt the highest benefit/lowest cost alternatives which serve to further achievement of Huntington Beach's economic AM development goals. - • Related Recommendations Adopt an objective economic development rating criteria for evaluating the potential benefits of particular private business concerns to Huntington Beach in terns of jobs, tax base, image enhancement, and other factors. The following financial incentives which are either not being utilized or could be applied more extensively, are recommended for consideration according to availability of sufficient staff and funds. • US Small Business Administration Loans and Loan Guarantees ® Sales Tax Generation Equivalency Loans q cY • Value Added Tax Equivalency Loans • Micro Loans for Machinery and Equipment 5 C Use-Specific State Loan Guarantees ® Commercial Rehabilitation Loans ® Commercial Facade Rebates/Grants 0 Commercial Tenant Improvement Loans ® Tax Exempt Industrial Development Bonds C Community Facilities District Bonds ® Fee Waiver/Reductions ® Tax Allocation Bonds ® Business Improvement Districts • Hotel Districts Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's :z. long-range future in terms of"Opportunities and Constraints", particularly as related to international trade and commerce. Complete redevelopment of the Downtown Business District in order to convey a "ready for business" look and feel. Strongly consider adaptation of formerly institutional sites, such as schools, to large discount retail uses. 6 5 Conclusion ® Challenge Huntington Beach currently has deficiencies in its economic base related to retail sales activity, particularly around its northernmost anchor at the Huntington Center/Edinger Corridor,and despite strong demographic characteristics on a citywide basis. In addition to retail, Huntington Beach needs to develop to its fullest potential within business and industrial sectors related to the natural shoreline environment and the highly trained professional labor pool which serve to define the essence of the community's identity as a business location. - ® Response rate to identify and implement general It is the intent of the Economic Development St gy ify p business attraction and retention initiatives in particular directed at two primary business clusters - High Technology and Tourism as the key underpinning of this document to accomplish the Mission Statement stated above. ® Related Recommendations Consider implementation of all Strategy Recommendations, both Higher Priority and Lower Priority. 7 INTRODUCTION With a population approaching 200,000 residents, Huntington Beach is the third largest city in metropolitan Orange County, California. Situated along eight miles of scenic Pacific Ocean beach front,the City attracts over nine million tourists and visitors annually. The U.S. Open of Surfing,to be held in August, is among the many water-oriented sporting competitions taking Place immediately adjacent to the revitalized Downtown area. A world renowned environmental treasure, the Bolsa Chica Ecological Reserve, has been selected to play host to the 1996 Watchable Wildlife Conference. The City's affluent, highly educated populous experiences a variety of lifestyle and housing options in this predominantly residential enclave which has been named the "Safest Big City in America." The City provides many employment opportunities for local residents ranging from hospitality, retail, and tourism-related jobs in the Downtown and North Huntington Beach business districts to high technology-oriented professional positions at the Ci s largest manufacturing McDonnell- Douglas Corporation. As is the case with public safety for residents and visitors, Huntington Beach has been ranked by California Business Magazine as the"Best Big City for Business in California." Yet, Huntington Beach is not without its challenges from an economic development perspective. The jobs-housing balance is such that many residents must necessarily commute outside the City, and even the immediate area to find suitable employment. The City's retail sector is somewhat weak, with per capita retail sales at one of the lowest levels of any major city in Orange County. The community's relative isolation, in terms of major freeway access, further limits realization of its potential as a 8 ion. The effectiveness of the Strategy will ultimate) be regional business and/or shopping destination. gY Y measured by its ability to respond to the challenges currently at hand. In an effort to make Huntington Beach the best possible place in which to live, work and do business, the City Council recently adopted a series of goals and objectives directly related to the fundamental rationale behind the creation of an economic development strategy for the City. GOAL: "Establish policies and strategies to ensure a viable business environment throughout the community and expand the City's revenue base". - One related objective, in particular, reflects the City's desire to take a proactive approach toward the achievement of its overall economic development goal: "In order to promote business and create new jobs, develop an aggressive program that would use entrepreneurial approaches to attract and retain commercial and light industrial businesses, high-tech manufacturing and retail business." The City of Huntington Beach Economic Development Strategy which follows is an effort to operationaae and implement the aforementioned City Council goals and objectives, while also addressing the underlying reasons for embarking upon the process at the present time. The strategy is divided into two major sections: 9 1 Communi Economic Base Analysis tY Y 2) Marketing Plan for Business Attraction and Retention 3" fog 10 COALWUNITYECONOMICBASEANALYSIS Relationship of Economic Development Strategy to City General Plan The logical starting point in undertaking an economic development strategic planning process for any community is to access the characteristics and conditions of the existing economic base. This h i n well i information enables local policy makers and managers to access the c ty's strengths, as a as is areas of challenge, on an objective, quantitative basis. Huntington Beach has the advantage of currently being involved in a comprehensive update of its General Plan. This is the long-range planning document which guides the City's future direction in terms of the following areas of concern or "elements", some of which are mandated by State law, and others such as Economic Development,which are included at the discretion of local government: • Land Use • Urban Design • Housing • Historic and Cultural Resources • Economic Development • Circulation • Public Facilities and Public Services • Recreation and Community Services • Utilities • Environmental Resources/Conservation 11 • Air Quality • Environmental Hazards ® Noise The already completed General Plan Economic Development Element provides an excellent existing point of reference and foundation for the Economic Development Strategy. The Strategy can be viewed as a companion piece which serves to provide an implementation mechanism for much of the general direction and data base which the Element provides. In addition, the Plan's Land Use Element effectively delineates the parameters, on a site and area-specific basis, for guiding the City's business attraction and retention efforts. The City's foresight in positioning the Strategy soon after the completion of these two important long-range planning documents serves to enhance the effectiveness of the strategy as an implementation tool. The "Goals, Objectives, and Policies" section of the Economic Development Element specifically references its relationship to the strategy with the following statements: • "The Economic Development Element sets forth the broad economic goals and objectives of the City. Economic Development strategies will be prepared in the future to implement these goals and objectives." o "C reate an Economic Development Strategy that: a) is based on the most recent growth and economic forecasts, and b) reflects both the City perspective and the business community perspective for economic development". 12 The Element discusses Huntington Beachs competitive position within the larger Orange Count Y subregional marketplace, as well as the effects of changing land use patterns upon the local economy. The latter trend has been evidenced by a shift of the more "land-intensive" manufacturing and distribution uses to less expensive areas such as Riverside-San Bernardino, and to a lesser extent, outside of California entirely. Traditional heavy industrial activity has gradually been replaced to a Y �'Y tY 1� Y P large extent by commercial office, retail, and high technology light manufacturing and research and development (R&D) uses. As a result, the Element predicts that future business growth will be occurring in firms at the forefront of technological change and/or new technologies, highly automated firms requiring skilled technical and professional staff, and larger corporations where it is feasible and more efficient to separate basic manufacturing and warehouse/distribution functions from administrative office, sales, and research and development activities. From a competitive standpoint, Huntington Beach lagged behind the overall county in annual employment growth during most of the 1980's in both the Retail Trade and Services sectors of the local economy. In addition, the City actually experienced a net decline in annual retail sales activity between 1985 and 1990 the worst performance of an City in the West County area. The Element P Y tY tY also identified significant retail "leakage" as many Huntington Beach residents chose to spend their disposable income outside city borders. The report's retail section concludes by saying that: "Any retail positioning strategy for the near - and long-term future will need to identify the practical and relevant market niches which the City should pursue, rather than presume to attempt head-on competition with already established nearby centers and specialties." 13 The Land Use Element, unlike the optional Economic Development Element, is a required element of the City General Plan under existing State Law. The Land Use Element governs allowable types of land uses in particular geographic areas of the city, and all City zoning regulations must be in conformance with its provisions. Because of its critical long-range planning function, this Element is especially important to the Economic Development Strategy. Developable land both in public and private use represents the following relative shares of Huntington Beach's total land area: - % Acres -Residential 41.3 7,321 ® Commercial 7.5 1,325 -Industrial 8.3 1,476 - Institutional 1.1 199 -Public/Quasi-Public 11.1 1,959 Vacant 2.7 473 The preceding figures show that Huntington Beach, with only about 15 percent of its total land area in commercial or industrial use, and less than 3 percent currently vacant, would have a difficult time taking many major new economic development project initiatives, particularly those involving land intensive retail or manufacturing uses. The Element identifies less than 20 such potential sites, and only two of which exceed 17 acres in size. 14 As is the case with Cityzoning, it is essential that the Land Use and Economic Development Elements � P be compatible and internally consistent. For example, the Land Use Element states that city government should: "Promote development in accordance with the Economic Development Element". It is important to note, therefore, that the Land Use Element places the following future growth limitations on commercial/industrial development in the City. n.' Commercial Retail 3,165,000 s.f. • Commercial Office 1,570,000 s.f. •Industrial 2,505,000 s.f. Hotel 2,200 rooms _ At the same time, the Land Use Element demonstrates its consistency with the goals of the Economic Development Element via the following policy directive: "Accommodate the development of additional jobs-generating land u which p J g g uses c improve the 1992 jobs to housing ratio of 0.82 to 1.0 or greater, to meet objectives of the Regional Comprehensive Plan and Air Quality Management Plan. These should capitalize upon existing industrial'strengths'and emphasizing the clustering of'like!or'thematic'industries." Regional Economic Perspective The City of Huntington Beach is strategically located in the five-county Greater Los Angeles Metropolitan Area, one of the world's largest and most diverse economic regions. Comprised of the 15 counties of Orange, Ventura, San Bernardino, Riverside, and Los 1� Angeles, the region has a combined g total population exceeding 15 million. The economy of this complex,geographically dispersed area has suffered, in particular, in recent years from the nationwide decline in aerospace and defense-related manufacturing. The persistent national recession, coupled with an untimely string of natural disasters, has contributed to a general weakening of the regional economic base along with a concomitant loss of many high-wage technical and professional-level jobs. Huntington Beach is situated within the West Orange County urban area, one of 26 such concentrations making up the majority of the Greater Los Angeles regional economy. These urban areas can be characterized as "export-oriented" business centers which typically import workers from the surrounding vicinity, while exporting goods and services to other areas both within and beyond the boundaries of the region. With nearly one-half of California's total population residing in the Greater Los Angeles Area, the contribution of the region to the overall state economy cannot be underestimated. An important indicator of a region's economic health is a statistic known as the "employment-population ratio". Table 1 depicts this ratio for the individual counties, the region, the state, and the City of Huntington Beach. As is apparent from viewing this chart, employment-population ratios for both Orange County as a whole and the City of Huntington Beach in particular, exceed the regional and state figures to a significant degree. Generally, this indicates that the City and County are major employment centers importing skilled labor from outlying areas to fill available jobs. It is important to note, however, that -3 16 while the Coun s ratio increased slightlydurin the 1990-94 period, the Ci 's declined b tY` g P � tY Y approximately 5 percent. Table 1 Greater Los Angeles Area Regional Employment/Population Ratios 1990 1994 Pop. Emp. Ratio Pop.Emp. Ratio Change California 29,557,800 12,494,900 .42 31,960,500 14,428,700 .45 7.1 5-County Region 14,438,700 6,569,800 .46 15,484,500 6,925,000 .45 -2.2 Los Angeles 8,832,500 3,981,000 .45 9,230,600 4,121,000 .45 — Ventura 666,800 342,800 .51 708,200 349,200 .49 -3.9 Riverside 1,144,400 391,000 .34 1,347,400 536,200 .40 17.6 San Bernardino 1,396,600 521,000 .37 1,591,780 638,200 .40 8.1 Orange 2,398,400 1,172,400 .49 2,596,500 1,280,400 .50 2.0 Huntington Beach 181,100 109,200 .60 189,200 107,800 .57 -5.0 Source: California Department of Finance and California Employment Development Department. On the other hand, the more subtle yet less reliable, "jobs-housing balance," which incorporates the actual number of jobs generated by establishments located in the City rather than the employment status of local residents, is below the optimum index of 1.00. The City's 0.91 index indicates a need to bring the estimated number of jobs(67,100) into closer alignment with that of housing units(73,900). The "jobs" figure is a less exact estimate than is the case with "em to ent" and should, therefore, be � P Y►n viewed with some caution. One method for identifying primary or basic business and industrial sectors within a given local economy is called the "locational quotient" (LQ). The locational quotient is a simple, yet revealing, 17 indicator which is calculated b dividing the percentage of local employment in a articular sector b Y g P gP Y the national share in the same sector. A locational quotient of greater than 1.00 indicates a basic or export producing industry which exceeds the consumption needs of the local marketplace. Table 2 illustrates locational quotients within major categories of business and industry, officially known as "Standard Industrial Classification" (SIC) codes. Three major sectors - Durable Goods Manufacturing with an LQ of 1.32, Wholesale Trade at 1.25, and Finance, Insurance, and heal Estate (FIRE)at 1.32 - emerge as overwhelmingly basic industries within Orange County, thereby warranting closer analysis as focal points in terms of their economic development potential. For the purposes of this study, a community's economic development potential may be defined by its ability to generate employment and tax base sufficient to meet the needs of its resident population at a minimum, and ideally,to produce an excess of goods and services available for export to outside markets. 18 Table 2 MAJOR ORANGE COUNTY BUSINESSANDUSTRIAL SECTORS 1994 SIC OC us LAQ Goods Producing 21.9% 20.7% 1.06 Mining 0.0 0.1 -- Construction 4.0 4.4 0.91 Manufacturing 18.3 15.8 1.16 Durable Goods 11.9 9.0 1.32 * Nondurable Goods 6.4 6.8 0.94 Service Producing 77.5 79.3 0.98 Transportation/Utilities 3.5 5.2 0.67 Wholesale Trade 6.6 5.3 1.25 * Retail Trade 17.6 17.9 0.98 Finance/Insurance/Real 7.8 5.9 1.32 * Estate Services 30.5 28.2 1.08 Government 11.6 16.7 0.69 Source: U.S. Department of Labor, Bureau of Labor Statistics and California Employment Development Department. Table 3 provides a historical perspective regarding Orange County's locational quotients in the aforementioned major busines&'industrial sectors. While no clear trends are evident over the past five years, the chart does illustrate the highly publicized downturn in Construction ( - 12.5%), due to a general decline in regional building activity, as well as an upswing(+ 10.2%) in Transportation/Utilities due to an increasing regional emphasis on mass transit modalities. The area's basic export sectors - Finance/Insurance/Real Estate, Wholesale Trade, and Manufacturing - remain unchanged from 1990 up to the present. 19 Table 3 Locational Quotients Orange County/U.S. SIC 1990 1991 1992 1993 1994 Change Goods Producing 1.13 1.13 1.15 1.08 1.08 -4.4 Mining 0.17 0.17 0.17 0.20 0.20 17.6 Construction 1.04 1.14 1.02 0.93 0.91 -12.5 Manufacturing 1.19 1.18 1.16 1.15 1.16 -2.5 Service Producing 0.96 0.97 0.97 0.97 0.99 2.1 Transportation/ Utilities 0.59 0.59 0.60 0.64 0.65 10.2 Wholesale Trade 1.21 1.13 1.27 1.26 1.25 3.3 Retail Trade 1.04 1.00 1.00 1.01 0.99 -4.8 Finance/Insurance/ - Real Estate 1.34 1.24 1.38 1.36 1.33 -0.1 Services 1.05 1.07 1.06 1.08 1.08 2.9 Government 0.65 0.67 0.66 0.67 0.70 7.7 Source: U.S. Department of Labor, Bureau of Labor Statistics and California Employment Development Department. Table 4 further reduces these major SIC code groupings to their component parts in an effort to discover especially well-represented sectors in the county economic base. The following six basic categories of business and industry exhibit locational quotients at or above 1.25: g ry -Industrial Machinery and Equipment Manufacturing -Electronic and other Electrical Equipment Manufacturing -Instruments and related products Manufacturing -Wholesale Trade-Durable Goods -Insurance -Real Estate In addition, despite the fact that the overall Services sector locational quotient was only 1.08, three of its subsectors are very well represented locally: -Business Services -Amusement and Recreation Services -Engineering and Management Services 20 +p Table 4 BASIC ORANGE COUNTY BUSINESSANDUSTRIAL SUBSECTORS 1994 SIC OC US LLQ Durable Goods Manufacturing 1.89% 9.04% 1.32 Lumber and Wood products/ Fumiture and Fixtures 0.89 1.07 0.83 Stone,clay,and glass products 0.22 0.47 0.47 Primary metal industries/ Fabricated metal products 1.75 1.82 0.96 Industrial machinery and equipment 2.33 1.71 1.28* Electronic and other electrical equipment 2.20 1.37 1.61 * Transportation equipment 1.68 1.52 1.11 Instruments and related products 2.52 0.74 3.41 ** Misc. manufacturing 0.30 0.33 0.91 Wholesale Trade 6.60 5.34 1.25 Durable goods 4.57 3.04 1.50 Nondurable goods 2.03 2.29 0.89 Finance/Insurance/Real Estate 7.78 5.93 1.31 Finance 3.21 2.84 1.13 Insurance 2.44 1.90 1.28 Real Estate 2.13 1.19 1.79 Services 30.46 28.18 1.08 Business services 8.26 5.79 1.43 Amusement and recreation 2.61 1.55 1.68 services/Motion pictures Engineering and management services 3.31 2.31 1.43 Source: U.S. Department of Labor, Bureau of Labor Statistics and California Employment Development Department. 21 Real Estate Trends Measured in terms of real estate activity rather than employment, Huntington BeachVest County are sending out mixed signals in regards to the market for both Manufacturing-Distribution and R&D space. The 1994 annual Grubb&Ellis Real Estate Forecast reported a combined inventory for the two uses of over 31 million square feet of leasable space. While the West County industrial/warehouse market was slow with the County's second highest vacancy rate at 15.7 percent, the growing R&D market boasted its lowest rate at 12.6 percent(Table 5). Other sources have presented generally lower vacancy figures, however, their data is not considered to be as reliable as that regularly published by Grubb&Ellis. These trends are indicative of the general shift away from ombasic or "heavy" manufacturing industry in the Greater Los Angeles Area toward more high technology, information-based businesses. The presence of McDonnell Douglas Aerospace West Corporation, one of the largest high tech employers in Orange County, provides a ready catalyst for spin-off development opportunities to a vast network of small to mid-sized subcontractors and suppliers. Huntington Beach should be wary, however, of becoming overly reliant upon a single, large corporation, particularly in view of recent cuts in defense- related contracts. Industrial space needs in Orange County are greatest for Class A buildings exceeding 75,000 square feet in total area, but heavy demand also exists for small users in 5,000 sf- 10,000 sf size range. 22 Table 5 MANUFACTURING-DISTRIBUTION SPACE INVENTORY VACANCY&ABSORPTION 1994 Rentable Vacant %Vacant Net Avg. Square Square Ft. Direct Absorption Asking Feet Direct 1994 Rent Area 0001s 0( 00,$) 0( 00's) s.f./mo Airport 32,862 5,800 17.6% 2,400 $0.32 South 8,010 900 11.2% 870 0.53 Central 23,265 2,470 10.6% 2,100 0.36 North 39,761 4,620 11.6% 2,500 0.34 !Nest 24,853 3,904 15.7% 1,800 0.35 Manufacturing-Distribution Total 128,751 17,694 13.7% 9,670 0.40 RESEARCH&DEVELOPMENT SPACE INVENTORY VACANCY&ABSORPTION 1994 Rentable Vacant %Vacant Square Square Ft. Direct Net Asking Feet Direct Absorption Rents Area 000's 0( 00's) 000's s.f./mo Airport 32,829 4,419 19.4% 1,615 $0.55 South 10,702 1,762 16.5% 1,230 0.62 Central 4,915 800 16.3% 320 0.47 North 9,923 1,500 15.1% 385 0.42 West 6,662 840 12.6% 410 0.56 R&D Total 55,030 9,321 16.9% 3,960 0.52 Source: Grubb&Ellis Real Estate The Huntington Beach/West County office inventory is relatively small comprising just under five million square feet of leasable space. The City, however, contains several large office complexes including Guardian Center, One Pacific Tower, and Seacliff which are in the 150,000 to 200,000 square foot size range. Vacancy rates are slightly below the County average at 14.5 percent(Table 6). 23 Table 6 OFFICE SPACE INVENTORY VACANCY& ABSORPTION 1994 Rentable Vacant %Vacant Net Net Square Square Ft. Direct Absorption Asking Feet Direct 1994 Rent Area O( 00's) 0{ 00's) O( 00's) s.f./mo Airport 26,903 3,880 14.4% 553 $1.45 South 5,519 658 11.9% 175 1.41 Central 13,593 2,592 19.1% 222 1.33 North 3,688 458 12.4% 114 1.34 West 4,875 705 14.5% 208 1.36 ®range County'Total 54,578 8,293 15.2% 1,273 • 1.38 Source: Grubb&Ellis Real Estate A key resource for Huntington Beach's growing tourism and visitor industry are the City s 1,000-plus hotel rooms. The largest of these, at over 200 rooms each, are the Waterfront Hilton and the Holiday Inn. The expansion of this important sector of the local economy is certain to require more hotel rooms and conference facilities. Huntington Beach and vicinity show some definite signs of movement in the important retail trade sector. The City demonstrated measurable competitive progress in at least two key indicators during 1994. According to the Grubb&Ellis report, the West County area, of which Huntington Beach is by far the largest City, absorbed more retail space than any other area of Orange County. As illustrated by Table 7,the area also contains the largest total inventory of space. These data are encouraging because of Huntington Beach's as yet not fully realized potential for generating increased retail sales activity. With a median family income level of$58,200, which exceeds the County average by over 10 percent, Huntington Beach represents fertile ground for expanded retail activity. 24 Table 7 RETAEL SPACE INVENTORY VACANCY& ABSORPTION 1994 Rentable Vacant %Vacant Net Net Square Square Ft. Direct Absorption Asking Feet Direct 1994 Rent Area 0( 00's) 0( 00's) 0( 001s) s.f./mo Central Coast 8,063 195 2.4% 40 $ 1.93 West 13,923 703 5.0% 203 1.85 North 8,437 518 6.1% 81 1.55 Central 13,303 1,052 7.9% (68) 1.45 South 9,716 635 6.5% 185 1.80 Orange County Total 53,444 3,103 5.8% 441 1.75 Source: Grubb&Ellis Real Estate Reliance on Retail Trade Sector Since the passage of Proposition 13 in 1978, many communities in California have been actively engaged in an ongoing battle to lure additional tax generating business, particularly retail sales, to supplement dwindling General Fund revenue sources. In some ways, this competition for tax dollars has been a zero sum game since a finite amount of disposable income exists within a given market trade area. While this internal competition has been waged within California, a number of other states have successfully targeted local business and industry, especially manufacturing, for o relocation outside this area. The net effect of this trend has been an erosion of the employment base in high skill, high wage occupations related to basic manufacturing activity, and their replacement with less desirable jobs tied to the retail trade sector of the economy. Coupled with the lingering impact of the regional economic recession and accompanying job losses,the total number of quality available jobs, and hence disposable personal income,has declined significantly over the past five years. 25 Numerous localities, both inside and beyond California's borders, are offering an array of financial subsidies in order to attract new business or retain existing firms within their jurisdictions. The reasons for doing so are fairly obvious. A single large retail establishment, for example, occupying 100,000 square feet of space could generate as much as $300,000 to $400,000 in annual sales tax revenue. Auto dealerships, a major subject of debate and intense competition throughout California, often bring in over$200,000 per year in sales tax. Auto sales tend to fluctuate more dramatically than the above mentioned general merchandise category of retail trade according to national economic trends, but the importance of retail sales activity to any city budget cannot be underestimated. In Huntington Beach, sales tax currently accounts for roughly 17 percent of total General Fund revenues and this figure can run much higher on a relative basis in more heavily retail-oriented communities. An over-reliance on sales tax revenue can be problematic from a municipal budgeting perspective in that retail sales activity can vary considerably from year to year because of national and regional economic trends which are largely beyond the control of local government. Table g illustrates that, on a relative per capita basis, Huntington Beach retail activity lags behind that of many other major cities in Orange County. For example, while Huntington Beach has approximately twice the total retail sales volume of much smaller Brea, its per capita rate is less than one-half that of its north county neighbor. Moreover, only the county's two largest cities in terms of population, Santa Ana and Anaheim, have lower per capita spending rates despite median family income levels well below that of Huntington Beach. 26 Table 8 RETAIL.SALES ACTIVITY -MAJOR ORANGE COUNTY CITIES 1993 (000's) Taxable Retail Retail Population Sales Sales Per Capita Anaheim 290,712 $2,772,512 $1,441,500 $ 4,959 Brea 34,598 779,213 528,127 15,263 Buena Park 72,898 721,320 538,293 7,384 Costa Mesa 102,360 2,160,102 1,629,794 15,916 Fullerton 121,456 1,079,256 806,846 6,640 Huntington Beach 189,159 1,437,388 1,150,635 6,081 Irvine 121,173 2,151,115 1,027,664 8,479 Orange 117,956 1,587,490 1,064,126 9,018 Santa Ana 310,417 2,562,440 1,544,396 4,976 Tustin 59,751 918,110 714,857 _ 11,955 OC Total 2,596,511 $ 26,837,111 $ 16,812,710 $6,475 Source: California State Board of Equalization and California Department of Finance. According to the "leakage index" devised as an analytical tool in conjunction with the Economic Development Element, a score of 1.00 denotes a perfect balance of retail activity within a given community. Only the following three retail sales categories fell below the overall City score of 0.84: •Apparel Stores 0.56 •Eating and Drinking Establishments 0.74 •General Merchandise 0.77 The preceding indices demonstrate that Huntington Beach as a whole loses approximately 16 percent of its potential retail sales to surrounding communities. The main beneficiaries of this lost revenue, especially in regard to Apparel and General Merchandise purchases, are Costa Mesa, Westminster, and 27 Fountain Valley. As depicted by the accompanying trade area map, both Westminster and Fountain Valley fall within the 5-mile ring radiating out from the intersection of Beach Boulevard and Edinger Avenue,the location of Huntington Beach's only super regional shopping center,the Huntington Beach Mall. Attachment 1 aptly illustrates the tremendous buying power contained within this affluent area The estimated 1995 population exceeds 525,000 people who command median family incomes of nearly$61,000 per year. As indicated by Attachment 2,the only"problem"with the area, at least from Huntington Beach's point of view, is the intense competition for available retail dollars. With total Gross Leasable Area (GLA), in excess of 7 million square feet of retail space, the trade area houses 52 separate shopping centers includingthree regional and two super-regional malls. The latter category is dominated b the 191- g► g rY Y store Westminster Mall located only 1.3 miles from the Huntington Beach Mall. The close proximity of this shopping center has been particularly damaging from a competitive standpoint since it has attracted major discount retailers in addition to mall tenants to the outer perimeter of Huntington Beach. The recent relocation of the J.C. Penney's Department Store from the Huntington Beach Mall is indicative of the competitive challenges at hand. If the immediate internal competition weren't enough, the mammoth South Coast Plaza Shopping Center lies just beyond the 5-mile ring in Costa Mesa and undoubtedly draws numerous Huntington Beach shoppers to its doors. The Economic Development Element estimated the 1990 level of retail sales "leakage" at approximately $250 million per year, based on total sales activity of$1.23 billion. Retail leakage can be defined as the dollar value of purchases by Huntington Beach residents occurring outside the City's 28 boundaries. Utilizin a similar methodology to that employed b the Element, 1993 retail leakage is g gYY � g estimated at around $80 million on $1.15 billion in annual sales. While on the surface the reduction in t leakage represents good news, it may in large part be due to the steady decline in overall retail sales levels in all but two West County cities, as well as the entire County, since 1990 in particular(Table 9). TABLE 9 TAXABLE RETAIL SALES ORANGE COUNTY, WEST COUNTY CITIES Change 1985 1990 1993 1990-93 Costa Mesa $1,608,194 $1,722,577 $ 1,629,794 -5.4 Fountain Valley 314,661 494,649 515,975 4.3 Huntington Beach 1,426,392 1,225,477 1,150,635 -6.1 Santa Ana 1,672,252 1,606,956 1,544,396 -3.9 Seal Beach 96,887 96,497 98,565 2.2 Westminster 707,790 714,234 661,059 -7.4 West County 5,826,176 5,910,390 5,600,424 -5.2 ®range County $ 16,305,974 $ 17,483,433 S16,812,710 -3.8 Source: California State Board of Equalization 29 A"RKETING PLANFOR BUMVESSAMAC IONAND RETENTION City Council Policy Role The City Council Economic Development Comrruttee (EDC) assumed the lead role in the policy- making process related to the Economic Development Strategy with assistance and advisement from the Economic Planning Committee (EPC). The former group is charged with primary policy-level responsibility for current, implementation-oriented economic development activities, while the latter operates on a long-term basis to identify opportunities and constraints related to public economic development initiatives. The EPC is currently in the process of forming a high-level 'Red Team," comprised of top corporate executives who live and/or work in Huntington Beach, to assist with business attraction and retention efforts through "executive to executive" and other recruitment activities. Cfty of Huntin on Beach Economic Development Pro am Like most major cities competing for limited property and sales tax revenues within a large, urbanized metropolitan area, Huntington Beach possesses an active and sophisticated economic development program. Attachment 3 details the many and varied activities conducted by the City's Business Development Division for the purpose of retaining existing business and industry, as well as attracting new investment and jobs to the community. Organized under the City's Department of Economic Development,these range from advertising and promotional activities and permit processing assistance, to the highly successful Industrial Interview Program designed to retain job-generating manufacturing and distribution uses in the City. In addition, the very well received Mayor's Business Forums have 30 been held "in the field" outside of CityHall for the purpose of gauging business community opinion, and surfacing City government plans and policies in order to gain critically important public input to the process. The Business Development Program augments redevelopment and housing rehabilitation and development activities within the department to form the basis of a comprehensive overall economic development program for the City. As a point of reference, Attachment 4 compares city budget allocations for economic development/redevelopment services for several major programs in the Greater Los Angeles Area. The survey reports comparative numbers related to population, staffing, annual budget, and operating costs for the cities of Huntington Beach, Long Beach, Anaheim, Santa Ana, and Whittier. Each city's total economic development/redevelopment bud et is resented on a per capita basis while the g P P P subcategory of"Operating Costs," is expressed both in dollars and as a percentage of total budget. The latter term is defined as salary and benefits, debt service, rent, maintenance, equipment, and interdepartmental transfers. This chart illustrates that Huntington Beach devotes significantly less in staff and financial resources to economic development/redevelopment than other large Southern California municipalities. The Whittier example is included to show that the expenditure levels are more in line with those of older, medium-sized cities. 31 i Focus Group Discussions Recognizing the importance of a viable partnership between the public and private sectors of the local economy, the Economic Development Department, in consultation with the City Administrator's office, determined early on that a series of"focus group" discussions with various sectors of the business community should be an integral part of the strategic planning process. The Business Focus Groups, which met over an eight week period were divided into the following topical areas and/or sectors of the local business community: • Huntington Beach Chamber of Commerce(general)-3 meetings; • Development- 1 meeting; • Finance- 1 meeting; C Tourism- 1 meeting; • Retail/Service/Professional- 1 meeting; • Economic Development Professionals (California Association for Local Economic Development)- 1 meeting. Attachment 5 identifies a "Schedule of Public Discussion/Input to the Planning Process" for the Strategy. The schedule reflects the extensive level of City Council and staff, private business community, and outside economic development professional input which was contributed to the strategy process. 32 In order to establish the fundamental parameters or "ground riles" for the focus groups, the attached P "Questions and Answers" document was circulated to all participants at the onset of each meeting (Attachment 6). This document served to frame the ensuing discussions, thus avoiding the undesirable potential for completely unstructured dialogues which often tend to dwell on negative and/or highly personalized experiences. First, and very importantly, the Question and Answer sheet defined the sometimes vague and/or ambiguous terms of "economic development strategic. planning" and "community economic development potential". This established a uniform perception and understanding as to what the plan entailed, why it was being done, and what were its expected outcomes. Absent this structure, the comments generated with the focus groups might very well have been too general to be of any real analytical value. In addition, participants were provided with copies of"Tools/Incentives" questionnaire(Attachment 7)to solicit their thoughts and ideas in written form. The Business Focus Group discussions effectively laid the philosophical foundation for the Economic Development Strategy by thoroughly detailing and recording the critically important views of the private business sector. The Chamber of Commerce discussions which spanned a total of over five hours elicited a wealth of information which was categorized into three areas of response and/or need which are reported in summary as Attachment 8: • Attitude • Incentives ® Marketing 33 One of the Chamber group's first formal actions pertaining to the strategy was to adopt the following "Recommended Mission Statement/Purpose-Economic Development Strategy;" "To assist in the development and implementation of an Economic Development Strategy designed for the attraction, expansion, and retention of business in Huntington Beach. Included in the Strategy will be the evaluation of economic incentives and the reduction of regulatory barriers." The language contained in the preceding statement serves to emphasize the Chambers priorities in P g P terns of both the Strategy and the City's economic development program. The group wishes to see a program which combines various incentives with an accompanying decrease in government "red tape" which acts as an impediment to profitable private business enterprise. Clearly, the business community appropriately envisions itself to be at the forefront of local economic development policy-making since the majority of jobs and virtually all tax revenues are generated within the private sector of the economy. "Attitude" - oriented comments highlighted in the summary stress the need for a"pro-business"/"business friendly" attitude in City Hall where businesses, especially those going through the development review process, are to be treated like clients or customers. Similarly, "Incentives", in the opinion of the Chamber group, need to be of tangible financial benefit in order to be of real value to business. "Marketing" needs to be highly targeted and directed towards compatible "clusters" of business and industry which blend well with existing firms, and have a high growth potential. The City must also creatively "sell" its abundant attributes in terms of environment, quality of life, and business prosperity. Testimonials from existing business success stories, and 34 business retention in general, were seen to be the best possible form of advertising and promotion for g P g those firms considering a Huntington Beach location. The commentary from the Chamber of Commerce Focus Group, because it represented such a broad cross-section of the local business community, tended to be reflected in the views of the other assembled business groups. Among the additional insights which emerged from the other discussions were the idea that perhaps the downtown area had been historically over-emphasized by "City Hall" at the expense of other, more economically productive business centers, namely the North Huntington Beach area nearer to the San Diego (1-405) Freeway and the Beach Boulevard commercial corridor. The importance of the Beach Boulevard/405 Freeway "entrance" to the City was also stressed repeatedlyin several of the sessions (Retail/Service/Professional).. The need for more business friendly � ) Y development processing was emphasized by the frequency with which the following terms were mentioned in regard to development review: "consistency", "coordination", and "flexibility" (Development). Financial incentives were recognized to be a necessary component of a comprehensive economic development package, but as has been documented frequently in various business and professional journals,they are not among the main reasons cited for the choice of one particular business locale over another (Finance). Much of the fairly technical discussion which took place in this session dealt with the need for particular types of financing such as working capital and "start-up" business loans. U.S. Small Business Administration (SBA) programs were considered to be a particularly good resource in the latter regard. Finally, the concept of "eco-tourism", which involves capitalizing on Huntington 35 Beachs natural shoreline at attributes, was viewed to be an ideal marketing tool for attracting additional tourism and visitor dollars (Tourism). The idea of evolving beyond the "Surf City" image, without threatening this aspect of the community's traditional identity,was frequently mentioned. This meeting, which was well-attended by members of the Conference and Visitor's Bureau (CVB) also produced recommendations for the establishment of a major conference center and additional hotel rooms to generate more overnight visitors. The Economic Development Professional (CALED) Focus Group served as sounding board for the many ideas expressed by the locally-based business people, as well as an opportunity to tap their considerable professional expertise regarding new concepts and tools for attracting and retaining business and industry. With representatives from the Cities of Anaheim, Ana, and Brea, as well as Southern California Edison and specialized redevelopment and marketing consultants in attendance, this discussion served to illuminate and bring perspective to many of the earlier comments and ideas expressed by the "in-town" groups. While acknowledging the inevitability of some competition between cities for desirable tax and job-generating business, the group also recognized the importance of a regional approach to economic development strategic planning. The need for Huntington Beach to triumph over its somewhat negative image in the development community, related mainly to the highly publicized Bolsa Chica development controversy, by redefining the City as "user friendly" to business was discussed at some length. The economic development professionals felt strongly that the City should specifically target corporations with chief executives residing in or near Huntington Beach, as well as focusing on specialized businesses such as environmental products and services companies, classic car sales and service, and the music and entertainment industry where location is not an 36 overriding site selection criterion. The general consensus of opinion is related to the fact that Huntington Beach represents a regional amenity and attraction which benefits all of Orange County. Therefore, the City must emphasize its upscale, beach-oriented lifestyle, rather than attempt to compete °° r ' expensive 1 areas has h Riverside/San dollar for dollar for industrial uses with less exp ns a and eas such the Rivers San Bernardino "Inland Empire." In the area of incentives, it was recommended that Huntington Beach assist applicants/prospects with development fee reductions and/or processing assistance, rather than providing direct cash subsidies. The importance of establishing an effective and far-reaching commercial/industrial real estate broker relations programs was stressed, along with utilizing testimonials from existing business"success stories"who had chosen a Huntington Beach location over the available alternatives. Cluster Driven Business Attraction and Retention The development of a marketing program which builds upon areas of strength within the community economic base is certain to meet with greater success than a scattered, less targeted approach. Borrowing a term from the field of consumer product marketing, it may be useful to think of cluster- driven business attraction and retention as the "market segmentation" method. That is, a highly focused campaign which strives to reduce the target of the community's marketing program to its related and most compatible components, thereby achieving the maximum level of efficiency with limited public resources. Much of the research typically involved with the market analysis phase of an economic development marketing plan has been completed by way of the preceding community economic base analysis. The market segmentation approach to business attraction and retention 37 enables a community. to target its efforts. B doing the locality has a much better chance of g Y g so, tY achieving measurable success at an affordable cost. Huntington Beach's economic development mission may be defined as it was earlier in this report in terms of the city's ability to realize its potential to create quality, high-wage jobs and expand the local tax base to the fullest extent. With employment generation as one important criterion of success, Huntington Beach would derive optimum benefit from its marketing program expenditures by concentrating on the High Tech and Tourism Clusters. Generally speaking, the High Tech Cluster encompasses research and development, manufacture, and marketing/sales of products and services related to computers, electronics measuring instruments and devices and medical equipment/bio- technology. P � g � The Tourism Cluster includes recreation, lodging, retail sales, and scientific research and education related to the City's natural shoreline environment. The most effective marketing campaign must be targeted toward the most highly coveted end users, namely those which meet the ciWs adopted economic development policy goals in terms of business attraction and retention,job creation, tax base enhancement diversification,and revitalization, and improved business efficiency and competitiveness leading to a stronger economic climate. It is, therefore, essential that the identified clusters be operationally defined by SIC code. In this way, business attraction and retention incentives and costly marketing program implementation tools can be narrowly focused on the desired target audience, or market segment. In Huntington Beach's case, the High Tech Cluster, including Orange County's well-represented medical/bio-tech 38 field and Tourism Cluster may be very specifically identified b the 4-digit SIC codes delineated in Y rY P Y Y � Attachment 9. Once the appropriate target clusters have been identified, new business attraction prospects should be contacted in the following manner: (1) Mail promotional materials; (2) telephone follow-up; and (3) tourstsite visits. Typically, a business prospect list would be generated according to the selected SIC classifications through the services of computerized information services such as Dun & Bradstreet, Inside Prospects of California, and Retail Lease Trac. Firms of this type are able to provide pressure sensitive mailing labels tailored to the needs of the client. For example, the service could generate a geo-based list of major restaurants operating in the Southern California region. Or, it could create a list of consumer electronics manufacturers distributors and/or retailers. Targeted mailings of city promotional materials, including available economic development incentives and potential site locations, could be directed toward business prospects on a periodic basis. The mailings would generate certain desired contacts which could be followed-up by telephone. The most highly sought after prospects could be taken one step further through invitations to participate in guided city tours and site visits. It is important to note that some discretion should be exercised in regard to business solicitation within a local trade area such as Orange County. Internal local competition could undermine cooperative regional business attraction efforts such as those of the Orange County Economic Development Consortium. 39 In the same regard, information services of this kind can be used to coordinate business retention activities. The data which they produce provides a ready reference guide for City policy makers and economic development officials to keep in touch with and gauge the needs of existing local businesses. .Y. Business satisfaction surveys conducted by mail, as well as telephone and/or in person retention interviews,are a natural component of a systematic retention program. Economic Development Incentives As mentioned previously, Greater Los Angeles Area business and industry has been the primary target of many out-of-state and out-of-area recruiters whose aim is to attract jobs and tax base to their areas. Typically, these recruitment activities have involved offers of significant financial incentives including property tax abatement,customized job training, and cheap or free land for development. During the past five years in particular, California State and local government, in partnership with the private business community, has begun to successfully counter these raids by creating various incentive programs designed to retain existing business and industry in the State. All economic development incentives share the following purposes in common: • Reduce or eliminate physical and/or economic blight. • Create and/or retain jobs. • Enhance the tax base of local government. • Encourage business investment and help increase profitability. 40 The following represents a detailed listing or menu of economic development incentives which a municipality may consider utilizing in order to attract and retain desirable business and industry in the local community. The list is not all inclusive, nor are the incentives described "right" for every community. The particular area in question needs to first evaluate its range of potential options and decide which of these alternatives best fit the situation at hand. The recommendations section of the Strategy will identify those incentives which seem most appropriate and feasible for Huntington Beach. In addition, Attachment 10 summarizes some of the most commonly used debt instruments which are Y available to augment local economic development efforts. 1) Loans/Rebates • Small Business Administration Loans and Loan Guarantees - SBA sponsored Certified Development Corporation may issue low-interest rate debentures for up to $500,000, or 40% of total project cost, for acquisition and/or construction. - SBA may directly provide loan guarantees of up to $500,000 for most business-related costs, including inventory and/or working capital. • Sales Tax Equivalency Loans - As specifically allowed by its Charter authority, a city or Redevelopment Agency may offer loans or pledge a portion of new taxes generated by desirable development projects. 41 • On a limited basis the state of California may provide loan guarantees for specific types of land uses. • A City or Redevelopment Agency may allocate funds for commercial rehabilitation loans, grants, and/or rebates. 2) Bonds • Subject to federal and state governmental limitations, a city may issue tax-exempt Industrial Development Bonds for plant expansions (Note: IDB's are "conduit" financing which do not involve any pledge of future tax revenues). • As specifically allowed by its Charter authority, a city may issue taxable municipal bonds in _Mn support of desirable development projects. • As specifically allowed by its Charter authority, a city may issue Communities Facilities District Bonds (AKA "Mello Roos" bonds) to finance needed public infrastructure improvements. ® A Redevelopment Agency may issue Tax Allocation Bonds which pledge future property tax increment revenues to repay debt, the proceeds of which can be used to achieve legitimate redevelopment purposes under state law. 42 3 Assessment Districts • A city may form a wide-variety of special purpose assessment districts to help offset the costs of needed public infrastructure improvements. - Business Improvement Districts generally utilize a portion of Business License fees to fund promotional activities,particularly in business centers such as downtowns. - Parking Districts, Street Maintenance Districts, Landscape Districts, and Street Lighting Districts generally utilize a portion of property tax revenues, calculated on an ad valorem, linear foot, power usage or other reasonable basis, to pay for desired maintenance, land acquisition, and/or physical improvements. i • Hotel/Tourism Districts can be formed which apply a portion of the Transient Occupancy Tax to fund desired promotional activities and/or physical improvements. P o P Y P 4) Direct Public Financial Contributions • Public infrastructure improvements which are of general benefit to an area, rather than site specific, can be contributed by a city or redevelopment agency as an incentive to desirable private development and/or investment. 43 • Land assemblyutilizing a ci s and/or redevelopment agency's ower or eminent domain g � PP (condemnation) may be applied to assist in the provision of required public improvements, or to complete site assembly on a given development project. • Public facilities improvements, such as police or fire stations, libraries, or.parks, may be contributed by the public sector as an enhancement for a particular development project. • Public land leases may be incorporated as a means of project financial subsidy by having the city or redevelopment agency act as the lessee of privately owned property, making lease payments equivalent to a particular index, such as sales tax generation (Note: The "public purpose" of such arrangements, in a legal sense, is unclear thus incurring unknown financial risk for private developers and/or users). P P ,E • Fee waivers/reductions for targeted users may be offered as incentives, but can complicate budget revenue projections, as well as raising questions of equitability and fairness to existing businesses. • Land cost write-downs for targeted uses can be applied within the limitations posed by state law. • Contracts for services with business organizations can be offered to pay for needed municipal activities such as image enhancement through promotion and/or advertising. 44 ® Business"incubator" facilities may be established to assist newer firms, articular) those in Y particularly areas of emerging technologies,to survive the critical initial three years of operation. 5) Special Purpose Zones/Districts ® Various federal and state chartered zones and/or districts exist which can provide tax credits and other financial incentives to encourage economic development (Note: A shortcoming is that the number of zones are legislatively limited, and awarded somewhat sporadically to "blighted,"usually highly urbanized areas). 6) Technical Assistance ® Many types of in-kind technical, assistance, including site selection assistance, "ombudsman" services develo ment processing/permit expediting, and business attraction/retention marketing, can be provided by local government at relatively little cost, with tremendous potential gain in terms of achieving community economic development goals. One form of incentive package which has gained popularity as well as publicity in recent years are Enterprise Zones and Empowerment Zones sponsored by State and Federal governments to achieve economic development purposes,especially in blighted and/or low-income areas. Businesses operating within the boundaries of such zones are offered a variety of financial benefits ostensibly making it more 45 economically viable to locate in marginal or high crime areas. Attachment 11 summarizes the tax credits, low-interest loans, plan/permit expediting, fee waivers, and other assistance made available to zone participants. In California, 36 Enterprise Zones and 40 Recycling Market Development Zones, which encourage the use of recycled materials in the manufacturing process, have been established throughout the State. The federal government, in kind, has created 6 Empowerment Zones and 65 Enterprise Communities in various urban areas of the country. While it is too early to thoroughly measure the effectiveness of these zones, they certainly represent a worthwhile attempt to improve business and economic conditions in depressed areas. Another popular incentive is the so-called business "incubator". Generally, these are publicly owned and operated facilities offering a variety of services to tenants including common clerical/reception, duplicating, FAX, conference rooms, computer, job training and business counseling services at drastically reduced rental rates. These resources are usually provided under one roof to assist newer, small businesses duringtheir initial "start-up" phase when the potential for failure is greatest. Most P P P incubators have a set "graduation" period not exceeding three years after which the firm should be able to compete on their own in the open marketplace. Incubators often involve substantial upfront capital costs in land and buildings, so it is advisable to attempt to adapt existing vacant or underutilized facilities to this use. Huntington Beach already offers a number of the previously described economic development incentives. In combination with the City's quality living environment and strategic location, the application of certain incentives toward the attraction or retention of highly desirable business and 46 industry will undoubtedly meet with a high level of success. Huntington Beach will not, however, be able to duplicate the federal and State tax breaks offered in the specialized zones of which the only Orange County locations are in Santa Ana and Anaheim. Nor can Huntington Beach easily compete with large privately owned high tech business parks such as the Irvine Spectrum. Property owner- driven deals have a major advantage in terms of land price and infrastructure, both which have been covered in advance of any project-specific economic development initiatives. One of the most important enticements which a municipality can offer to targeted business and industrial prospects is a "fast and fair" system of development processing, along with an equitable development fee schedule. The old business adage that "time is money" could not be more true than as it applies to development. The community which can assure that development applications will be processed within a reasonable, designated timeframe and at an affordable cost to the developer, will already have a distinct advantage over their competition. Attachment 12 compares Huntington Beach to three other large Southern California cities, Anaheim, Los Angeles, and Long Beach, in regard to both anticipated development fees as well as ongoing tenant costs. The above referenced examples are taken from the 1995 annual Kosmont Survey of Municipal Fees, Taxes, and Economic Incentives. As can be seen from the chart, a firm could expect to pay significantly less in Huntington Beach for a business license than in any of the cities surveyed. Other than Anaheim, which has no Utility User Tax, Huntington Beach emerged lower than the alternatives in nearly eve ry category. This is paicu1ary true when compared to Angeles, which levies taxes on payroll, commercial property rental, and parking occupancy, which none of the others 47 impose at all on their resident businesses. In this regard, Los Angeles presents a very appropriate a ro riate target for Huntington Beach's business attraction efforts. Whichever economic development incentives a city utilizes for the purpose of attracting and retaining k targeted business and industry must be applied on a uniform, equitable basis. Otherwise, existing business which provides the employment and tax base foundation for any community, will rightfully feel neglected by the government which they support. Attachment 13 offers a systematic means by which to evaluate the relative cost/benefit of an individual business to the community in terms of the following rating criteria. 1) Economic Benefit 2) Tax Base Enhancement 3) Public Financial Investment 4 Targeted "Cluster" Catalyst g Y This evaluation relates directly to the Economic Development Element policy recommendations identifying the need for thorough"fiscal impact analysis" pertaining to major policy decisions. 48 i Recommendations The following list of recommendations is divided into one of two categories according to their relative cost/benefit in terms of implementation. •Higher Priority •Lower Priority It should be noted that each of the referenced items are very important, and take precedence over the IMF many potential activities and projects which are not mentioned. Moreover, items which may be of high potential benefit, but also bear high costs, are generally ranked lower than those of high benefit/low cost. Higher Priority 1) Adopt an objective economic development rating criteria for evaluating the potential benefits of particular private business concerns to Huntington Beach in terms of jobs, tax base, image enhancement and other factors in order to gauge the fiscal impact of proposed project. 2) The following financial incentives which are either not being utilized or could be applied more extensively, are recommended for consideration according to availability of sufficient staff and funds. • US Small Business Administration Loans and Loan Guarantees • Sales Tax Generation Equivalency Loans • Value Added Tax Equivalency Loans 49 • Micro Loans for Machinery and Equipment • Use-Specific State Loan Guarantees • Commercial Rehabilitation Loans Commercial Facade• e acad Rebates/Grants • Commercial Tenant Improvement Loans • Tax Exempt Industrial Development Bonds • Community Facilities District Bonds • Fee Waiver/Reductions • Tax Allocation Bonds • Business Improvement Districts • Hotel Districts 3) Develop a site-specific marketing program, utilizing all available economic development tools including the "Red Team" recruitment approach, to attract business, especially targeted firms in the identified High Tech and Tourism Clusters to available properties. 4) Establish a Real Estate Broker Network to apprise local commercial/industrial brokers of current City plans and policies, while taking advantage of their expertise and business contacts to attract and retain business in the community. 50 5 :Implement specific action items including: P P g ® Target business attraction efforts toward firms operating within the incorporated boundaries of the City of Los Angeles due to their inordinately high tax burdens. ® Undertake a Restaurant Attraction Program to bring more fine dining establishments to Huntington Beach, especially in the downtown area. ® Actively seek to attract major retail tenants, including movie theaters, to the Edinger Corridor area and Huntington Beach Mall. ® Complete redevelopment of the Downtown Business District in order to convey a "ready for business" look and feel. ® Strive to attract the highest sales tax-generating uses to available vacant or under-utilized sites located in Commercial zones. ® Stronglyconsider adaptation of formed institutional sites such as schools to large discount P Y g retail uses. ® Increase Economic Development Funding. 51 �f 6 Concentrate on attractingand retaining job and tax generating tenants in the High Tech Cluster, gJ g g � , particularly related to subcontractors and suppliers to the McDonnell Douglas Corporation facility. ') Continue to expand cooperative ventures and relationship with Huntington Beach Chamber of Commerce aimed at both retention of existing business and attraction of new business. 8) Continue to work with the Conference and Visitor's Bureau to attract more tourists and visitors to Huntington Beach in keeping with the Tourism Cluster theme, and construct more hotels so the tourists can stay in Huntington Beach. 9 Continue to expand the successful Mayor's,Business Forums and Industrial Interview Pro P Y gram as a means of promoting business retention by addressing business needs prior to any relocation decisions being made. 10) Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's long-range future in terms of "Opportunities and Constraints," particularly as related to international trade and commerce. 11) Evaluate the financial feasibility of development of a Conference Center facility to attract more luxury hotel growth and business visitors. 52 rl. Lower Priority 12) Adopt formal policies and procedures for the City's Development Assistance Committee in order to help expedite the plan/permit review process and centralize decision-making. 13) Create a methodology for a simplified consolidated fee schedule so that a developer/user can readily pre-determine direct costs related to a particular project. 14) Strive to attain a Jobs/Housing Balance of 1.00 by creating at least one new employment opportunity for every new housing unit approved for construction. 15) Work with the Chamber of Commerce to expand services and staff support to the Small Business Assistance Center in order to serve the requirements of Huntington Beach's many small business establishments. 16) Work closely with Golden West College and the Orange County Private Industry Council (PIC)to create industry-specific job training programs and resources to augment the City's Economic Development Program initiatives. 17) Work in partnership with the private business community on a regional basis, through the Orange County Business Council/Economic Development Consortium,to attract targeted new business. 53 18 Workingwith local businesses and roe owners consider creating other Business property rtY g Improvement Districts, such as the successful collaborative effort by the Huntington Beach Auto Dealers Association,which funds the maintenance and operation of the I405 readerboard sign. 19) Create a comprehensive and regularly updated Commercial/Industrial Space Inventory utilizing data provided by real estate firms covering the Huntington Beach area. 20) Focus High Tech attraction incentives on Manufacturing-Distribution, and Research and Development firms in the 50,000- 150,000 square foot size range. 21 Institute a "KeyTenant Loan Program" for the Downtown and North Huntington Beach Areas �' � in order to attract targeted retailers to these key business districts. 22 Developi B "a High Tech c Business Incubator Facility for the purpose of growing targeted business enterprises of particular benefit to the local economy. 23) In keeping with the policy directives of the City General Plan, encourage the development of concentrated "commercial nodes" along Beach Boulevard through special economic development incentives made available to businesses located along this key corridor. 54 r r SHOPPING CENTER MARKET AN. _PSIS Urban Decision Systems, Inc. Huntington Beach, CA 04/13195 5 Mile Ring POPULATION HOUSEHOLDS INCOME 2000 Projection 552,051 Number(1995) 175,095 Per Capita $20,899 1995 Estimate 526,410 Average Size 2.98 Agg Income ($Mill) 11,001.5 1990 Census 499,615 $0-$14,999 18,831 FAMILIES $15,000-$24,999 15,044 %90-95 Change 5.4% Number(1995) 125,573 $25,000-$34,999 18,371 Average Size 3.39 $35,000-$49,999 28,935 RACE $50,000-$74,999 41,425 White 366,842 AGE $75,000-$99,999 23,862 Black 7,500 0-13 100,303 $100,000-$149,999 20,629 American Indian 2,656 14-20 50,510 $150,000+ 7,996 Asian 109,779 21-34 140,526 Median Household $53,460 Other 39,632 35-54 147,097 Average Household $62,719 Hispanic 124,337 55-64 41,811 Median Family $60,849 65+ 46,163 Average Family $70,013 SHOPPING CENTERS 61 TOTAL GROSS LEASABLE AREA(GLA) 7,287 Neighborhood 30 Centers Reporting 52 Community 19 Centers Reporting Anchor GLA 10 Regional 3 Total Anchors GLA 1,269 Super Regional 2 Total GLA Excluding Anchors 6,019 GLA/Pop Ratio 13.8 Enclosed Centers 2 GLA 2,029 GLA/HH Ratio 41.6 Strip Centers 21 GLA 2,353 SIZE OF CENTER Neighborhood Community Regional Super- Regional Number Reporting GLA 29 18 3 2 Total GLA 1,449 2,538 1,271 2,029 GLA Excluding Anchors 1,364 2,163 1,087 1,404 Average Total GLA 50 141 424 1,015 Number of Stores 304 283 316 297 AGE AND STATUS Number GLA Under 5 Years Old 3 825 5-10 Years Old 18 1,622 11-15 Years Old 2 218 15-20 Years Old 10 515 Over 20 Years Old 17 3,808 Planned Centers 1 0 Under Construction 0 0 Note: All GLA statistics are in 000's of square feet. Source:1980,1990 Census,March 15,1995 UDS Estimates (SCMA) Urban Decision Systems Inc.13975 Fair Ridge Drive,Suite 200M 1 Fairfax,VA 220331(800)3"4837 154983` 00 JIM imm-mom ;HOPPING CENTER LOCATIONS Urban Decision Systems, Inc. iuntington Beach. CA 13-Apr-95 Mile Ring 154983 1D Name GLA Distance Direction Address To Site 065204 NEWLAND CENTER Total 170 3.98 179(S) 19640-19950 Beach Blvd. Anchors Huntington Bch,CA 92647 Community Opened 1983 Anchor Names Lucky Discount Supermarket 063170 PLAZA DE LA PLAYA Total 39 2.96 178(S) Beach Blvd.&Garfield Anchors Huntington Bch,CA 92648 Neighborhood,20 stores Opened 1986 041689 TOWN&COUNTRY SHOPPING CENTER Total 0 2.96 178(S) Beach Blvd., Btwn. Garfield&Ellis Anchors Huntington Bch,CA 92648 Unclassified 057075 CLOTHESTIME FIVE POINTS PLAZA Total 46 2.47 178(S) SWC Beach Blvd. &Main St Anchors Huntington Bch,CA 92648 Neighborhood,21 stores Opened 1985 Anchor Names Clothestime Eye Care U.S.A. 052259 LOEHMANN'S 5 POINTS PLAZA Total 155 2.47 178(S) Beach&Main 18593 Main St Anchors Huntington Bch,CA 92648 Community, 37 stores Opened 1964 Anchor Names Huntington Cinema Loehmann's Pier 1 Imports Trader Joe's 057602 GARFIEL.D PLAZA Total 56 3.18 156(SE) SEC Garfield Ave. &Magnolia St Anchors 31 Huntington Bch,CA 92646 Neighborhood, 12 stores Opened 1979 Anchor Names FHP Medical Suites 074039 MARIPOSA PLAZA Total 40 2.93 133(SE) NWC Brookhurst St &Phillips Ave. Anchors Fountain Valley,CA 92708 Neighborhood, 23 stores Opened 1989 Anchor Names Petco D41679 ALBERTSON'S CENTER Total 138 4.48 148(SE) SEC Brookhurst&Adams Anchors Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-9568 Pagel #OPPING CENTER LOCATIONS Urban Decision Systems, Inc. Huntington Beach.CA 13-Apr-95 .Wile Ring 154983 1D Name GLA Distance Direction Address To Site Huntington Bch,CA 92646 Community,40 stores Opened 1977 Anchor Names �- AlbertsoWs Oshman's Sporting Goods 53300 YORKTOWN PLAZA Total 20 4.04 144(SE) Yorldown&Brookhurst Anchors Huntington Bch,CA 92646 Neighborhood Opened 1969 Anchor Names 7-Eleven 041690 BROOKFIELD PROMENADE Total 108 3.60 140(SE) Garfield&Brookhurst Anchors 62 Huntington Bch,CA 92646 Community,23 stores Opened 1967 Anchor Names _ Pets Choice Pep Boys Tokai Bank of Calif. D67406 FOUNTAIN VALLEY PROMENADE Total 188 3.21 135(SE) NWC Brookhurst&Ellis 18315 Brookhurst Anchors Fountain Valley,CA 92708 Community Opened 1989 Anchor Names Payless Drugs Ralph's Supermarket T.J.Maxx . '0569DB CAL.LENS CORNER Total 103 3.21 135(SE) Brookhurst&Ellis St Anchors - Fountain Valley,CA 92708 Community Opened 19$6 Anchor Names Lucky Discount Supermarket D416BB SEACUFF VILLAGE Total 125 3.62 343(N) Golden West St &Yorktown Ave. &Main St Anchors 66 Huntington Bch,CA 92648 Community,35 stores Anchor Names Opened 1976 Lucky Discount Supermarket B41686 OLD WORLD VILLAGE Total 0 0.51 295(NW) 7561 Center Ave. Anchors Huntington Bch ,CA 92647 Unclassified,60 stores Opened 1977 058160 PLAZA ON THE BOULEVARD Total 98 3.01 356(N) Beach&Garden Grove Blvds. Anchors Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-95M Page 2 tin SHOPPING CENTER LOCATIONS Urban Decision Systems, Inc. Huntington Beach, CA 13-Apr--95 5 Mile Ring 154983 ID Name GLA Distance Direction Address To Site Stouton,CA 90680 Neighborhood, 13 stores Opened 1989 Anchor Names Alpha Beta Blockbuster Video 052880 BEACH&LAMPSON SQUARE Total 165 3.51 357(N) Beach Blvd.&Lampson Ave. Anchors Stouton,CA 90680 Community Opened 1987 Anchor Names Price Savers D67362 HARBOR PACIFIC PLAZA Total 16 3.52 357(N) Beach&Lampson Anchors Stouton,CA 90680 Neighborhood Opened 1989 067197 PLAYA GALLERIA Total 0 4.04 357(N) SWC Beach&Chapman Anchors Stouton,CA 90680 Neighborhood Opened 1988 041783 STANTON PLAZA Total 0 4.52 358(N) 11360 Beach Blvd. Anchors Stouton,CA 90680 Unclassified 074774 7-11 SHOPPING CENTER Total 14 Z69 357(N) 13351 Beach Blvd. Anchors Westminster,CA 92683 Neighborhood Anchor Names 7-Eleven 054589 THE PAVILION Total 306 0.50 178(S) Beach Blvd_@ Heil Ave. Anchors • Westminster,CA 92683 Regional Opened 1985 Anchor Names Target Von's Pavillion Supermarket 041794 UNNAMED SHOPPING CENTER Total 0 1.65 (N) Hwy-39-from 11th to 12th Sts. Anchors Westminster,CA 92683 Unclassified, 16 stores D41683 HUNTINGTON BEACH MALL Total 934 0.08 63(NE) Edinger Ave.@ Beach Blvd. &San Diego 7777 Edinge Anchors 170 Huntington Bch,CA 92647 Super-Regional, 106 stores Opened 1967 Source-National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admirarty Way Ste 6241 Marina feel Rey,CA 902921($00),6334568 Page 3 61 LOPPING CENTER LOCATIONS Urban Decision Systems, Inc. untington Beach. CA 13_Apr 95 ile Ring 1549M ID Name GLA Distance Direction Address To Site Anchor Names Broadway Department Store Circuit City Mervyn's Department Store Montgomery Ward 53301 WARNER PLAZA Total 24 1.24 137(SE) 8780 WamerAve. Anchors Fountain Valley,CA 92708 Neighborhood, 16 stores Opened 1978 Anchor Names China Pearl Restaurant i4Nautilus Newport 1672 GARDEN PLAZA Total 65 3.14 19(N) Magnolia Ave. &Garden Grove Blvd. Anchors Garden Grove,CA 92645 Neighborhood, 17 stores Opened 1974 Anchor Names Alpha Beta 141656 FOUNTAIN SHOPPING CENTER Total 73 1.43 128(SE) Warner Ave. &Magnolia St Anchors Fountain Valley,CA 92708 Neighborhood,25 stores Opened 1964 Anchor Names _ Alpha Beta Acme Mkt Emergi Center D41799 WESTMINSTER SHOPPING CENTER Total 12 1.15 i11 (E) Magnola&Heil Anchors Westminster,CA 92683 Neighborhood, 8 stores Opened 1978 - tM623 ASIAN GARDEN Total — 100 1.47 50(NE) Boisa Ave. &Magnolia Anchors Westminster,CA 92683 Community ' Opened 1987 063659 BOLSA PLAZA Total 0 1.47 50(NE) 9081-9113 Boisa Ave. Anchors �. Westminster,CA 92683 Unclassified 060083 UNNAMED SHOPPING CENTER Total 12 3.36 30(NE) 9618 Garden Grove Blvd. Anchors Garden Grove,CA 92644 Neighborhood 053302 PLAVAN PLAZA Total 48 1.79 118(SE) SWC Warner&Bushard Anchors 23 Fountain Valley,CA 92708 Neighborhood, 16 stores Source:National research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-9568 Page 4 F7 SHOPPING CENTER LOCATIONS Urban Decision Systems, Inc. Huntington Beach,CA 13 Apr 95 5 Mile Ring 1549M ID Name GLA Distance Direction Address To Site Opened 1981 Anchor Names Del Taco Sider Steak House Soft Warehouse 074452 PAVILLIONS PLAZA Total 141 4.40 27(NE) Brookhurst&Chapman Anchors Garden Grove,CA 92640 Community,29 stores Opened 1989 Anchor Names SavOn Drug 041676 GARDEN PROMENADE Total 515 3.81 34(NE) Brookhurst&Chapman Sts. Anchors Garden Grove,CA 92640 Regional,60 stores Opened 1956 Anchor Names PriceCostco JCPenney Marshalls Miller's Outpost - 041657 FOUNTAIN VALLEY PLAZA Total 116 2.81 129(SE) Brookhurst St &Talbert Ave. Anchors Fountain Valley,CA 92708 Community, 30 stores Opened 1974 Anchor Names Albertson's Clines Stationers Kmart Thrifty Drugs Von's Pavillion Supermarket 041655 BROOKHURST PLAZA Total 0 2.29 114(SE) 17155 Brookhurst Anchors Fountain Valley,CA 92708 Unclassified 064979 WESTHAVEN SHOPPING CENTER Total 61 2.04 83(E) Brookhurse St &Margo Ln. 15553-15691 Brookhurse . Anchors Westminster,CA 92683 Neighborhood Opened 1977 041796 WESTHAVEN NORTH SHOPPING CENTER Total 70 2.05 83(E) Brookhurst St &Margo Ln. Anchors Westminster,CA 92683 Neighborhood, 18 stores Opened 1974 064951 BROOKHURST FASHION PLAZA Total 0 2.09 78(E) Brookhurst&McFadden Anchors Westminster,CA 92683 Unclassified Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-SSN Page 5 63 LOPPING CENTER LOCATIONS Urban Decision Systems, Inc. Huntington Beach,CA 13-Apr--95 Mile Ring 154983 ID Name GLA Distance Direction Address To Site Opened 1987 1063658 LIBERTY SQUARE Total 60 2.27 67(NE) 9908 Bolsa Ave. Anchors Westminster,CA 92683 Neighborhood Opened 1989 041795 FAIRCHILD CENTER Total 68 2.87 50(NE) SWC Brookhurst&Westminster Aves. Anchors Westminster,CA 92683 Neighborhood, 11 stores Opened 1961 j041677 BROOK HURST SHOPPING CENTER Total 130 2.87 50(NE) Brookhurst&Westminster Anchors Garden Grove,CA 92640 Community,3 stores Opened 1986 041670 BROOKHURST NORTH SHOPPING CENTER Total 15 _ 3.36 42,(NE) 13301 Brookhurst Anchors Garden Grove,CA 92645 Neighborhood, 10 stores Opened 1979 Anchor Names La Casita Me)dcan Restaurant&Cocktail Oriental Foods, Grocery&Liquor 041668 UNNAMED SHOPPING CENTER Total 68 4.90 40;(NE) SWC Euclid&Chapman Aves. Anchors Garden Grove,CA 92645 Neighborhood Opened 1974 072849 EUCLID RETAIL CENTER Total 48 3.44 63(NE) Euclid St&Westminster 14241-91 Euclid St Anchors Garden Grove,CA 92643 Neighborhood, 35 stores - Opened 1988 041776 VALLEY CENTER Total 82 3.00 89(E) Edinger,&Euclid Sts. Anchors • Santa Ana,CA 92704 Neighborhood, 16 stores Opened 1962 072052 SOUTH GROVE PLAZA Total 106 3.63 60(NE) Westminster&Euclid Anchors Garden Grove,CA 92642 Community Opened 1990 070705 PRICE CLUB PLAZA Total 255 4.01 115(SE) NEC Talbert&New Hope Anchors 127 Fountain Valley,CA 92728 Community,20 stores Opened 1991 Anchor Names Pets Mart PriceCostco Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 1"76 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-9568 Page 6 Ad N 4/26/95 CITY OF HUNTiNGTON BEACH ECONOMIC DEVELOPMENT PROGRAMS REGIONAL ASSISTANCE PROGRAMS Lack of capital to start, expand, or relocate a business is one of the biggest problems facing businesses today. In an effort to relieve this problem,the Business Development division works to establish a good working relationship with local banks, state, and federal offices, and various other community, regional, and governmental resources. The division can then direct businesses in need to the proper sources and help them take advantage, of a multitude of business incentive programs, including community reinvestment programs, SBA loan programs, industrial development and job training, financial incentive programs, those offered by Air Quality Management District, and bond and loan programs operated by the US and California Department of Commerce. INDUSTRIAL INTERVIEWS A program to increase goodwill and understanding between the city and its industrial businesses. Staff members visit firms to thank them for being part of the Huntington Beach Community, receive suggestions on important city services, offer assistance with any relevant city or regional processes, and create awareness of special funding or other assistance programs that may prove beneficial. MAYOR'S BUSINESS FORUM Regularly scheduled breakfast meetings are hosted by the mayor to introduce city leaders to a diverse range of businesses and business leadership in the community, from bankers and developers, to child care providers and the media. The forum gives elected officials and city staff members a dedicated time to listen to any concerns or input these businesses may have. Benefits include opening the lines of communication between businesses and the city and increasing mutual understanding among the parties. BUSINESS IMPROVEMENT DISTRICT The auto dealers have formed a Business Improvement District to further enhance business and advance the goals of the Huntington Beach Auto Dealers Association. Regular assessments and organized communication help maintain the auto row along Beach Boulevard with staff providing assistance as needed. BUSINESS ASSOCIATION ASSISTANCE Business advisory organizations are essential to building a healthy business community. To promote the creation and success of these groups within the city, the Business Development division offers technical and staff support whenever needed. The division is in regular contact with organizations such as the Chambers Business Development Committee, the Huntinton Beach Auto Dealers Association, the Chamber's Downtown Business Committee, the Chamber of Commerce Huntington Beach Uptown Committee, and the North Huntington Beach Business Comittee. 68 4/26/95 TRADE SHOWS By attending and working the various city and area trade shows, including the Orange County Economic Development Consortium and those of the Chamber of Commerce, the Business Development division hopes to increase positive exposure and keep a finger on the pulse of the business community. Additionally,trade shows offer an ideal time to market the city as a viable location in which to expand or relocate. DIRECT BUSINESS ASSISTANCE Business Development staff provide both technical assistance and ombudsman services, depending upon the nature and complexity of the business request. OMBUDSMAN SERVICES The Business Development division provides much-need troubleshooting services in its effort to assist new, expanding, and relocating businesses through the governmental process. Staff members are available at early stages to help walk businesses through the system, assisting the permit process and working to identify any potential problems. To accomplish these goals, the division draws upon the talents of the civs Development Assistance Committee, comprised of key staff members from all city departments involved in the permit process. This alliance not only benefits businesses, but encourages better communication between the departments and a greater understanding of the needs of the business community. MARKETING AND ADVERTISING The Business Development division continues its ongoing marketing effort to publicize and promote the city of Huntington Beach. It is through this ad"ive promotion that the division receives the majority of calls and referrals- some as far away as Texas, Florida, and Guam — and thus, considers all its marketing efforts a vital part of accomplishing its stated goals. HBTV CHANNEL 3 The Business Development division promotes better community relations through public service announcements and shows such as Made in Huntington Beach. This show spotlights Huntington Beach manufacturers and takes viewers on a visual guided tour of some of the local facilities that are producing products here for export throughout the country and the world. Additionally,the Chamber of Commerce highlights members and special business development programs through a regularly aired show called the Business roundtable. 69 4/26/95 AD CAMPAIGN t The Business Development division promotes the theme liow to Turn Red Tape into Red Carpet,"by initiating a multi-media campaign with the goal of informing the public, especially the local and regional business communities that the Development Assistance Committee is on their side, ready to assist them in getting through the governmental process as smoothly as possible. Ads currently run in Orange and Los Angeles counties business publications, reaching approximately 70,000 business people, as well as in the d y's "Sands" publication, the Chambers monthly newsletter, and other trade directories. PUBLICITY The Business Development division regularly receives media exposure throughout the region in such publications as the Los Angeles Times, and the Orange County Register, Orange County and Los Angeles Business Journals, The Independent, The Local News, and the Huntington Beach Chamber of Commerce Newsletter. it is widely thought that exposure through public relations is much more valuable than even paid advertising. Such a program helps formulate a positive image for the city and its departments. SHOP HB CAMPAIGN The Business Development division and Chamber of Commerce recognize that keeping shopping dollars in the city is one of the most effective ways to increase sale tax revenue, and they have taken steps to address this issue. An overview of efforts to date include letters from the mayor and city council to 40,000 Huntington Beach households, Shop in Huntington BeacW street signs throughout the city, reminders sent out with municipal service billings, and other direct mailings, school district informational programs, publicity in the Sands and other local papers, and enthusiastic support from the Auto Dealers Association,the Huntington Beach Mail, and other local merchants. CONFERENCE AND VISITORS BUREAU As a program funded by the city's Economic Development Department, the Conference & Visitors Bureau is responsible for promoting Huntington Beach as a vacation and conference destination. The Business Development division assists the Bureau in marketing special events, jointly represents the city at trade shows, provides technical and staff support when needed, and assists in creating collateral material for various programs. INDUSTRIAL_DIRECTORY The Business Development division, acknowledging the Chamber of Commerce's knowledge and expertise of the local business community has contracted with then to compile information on approximately 400 industrial firms in Huntington Beach. A manufacturing business-to- business directory is an effective tool to help Huntington Beach's industry shop at home. A new, updated directory is published biannually and made available free to requesting businesses as part of this successful ongoing program. 4/26/95 BUSNNESS PERMIT GUIDE This helpful printed reference serves as a businessperson's first contact with the city and introduces the many programs, services, contact people, and other departments responsible for the various permits and processes. it is also designed to give an overview of other county,state, and federal agencies and their requirements. The goal is to take a User friendly'approach, essentially walking the reader through the entire permitting process, and becoming as beneficial and helpful to the business community as possible. TECHNICAL ASSISTANCE The Business Development division fills the need for new, expanding, or relocating businesses by offering the convenience of a comprehensive information source. Businesses need a central resource to turn to for authoritative information and advice on business-related subjects such'as marketing,licensing, permits,and financing. For more specific, in-depth information, the Business Development division utilizes the Small Business Assistance Center. SMALL.BUSINESS ASSISTANCE CENTER The Business Development division, partnered with the Huntington Beach Chamber of Commerce, and funded through generous grants from GTE, California and Southern California Edison Company, has created the Huntington Beach Small Business Assistance Center (HBSBAC). This invaluable center provides seminars covering topics unique to the small business environment and geared toward increasing new venture success, profitability, employment,and renewed vitality of the local economy. In addition, the Huntington Beach business owners, entrepreneurs and managers can take advantage of free one-on-one counseling services conducted by experienced business consultants,and can access a library of useful business—related information. The HBSBAC also provides businesses with access via computer to CD-ROM information provided by the US Department of Commerce on export opportunities. ORANGE COUNTY CONSORTIUM As an executive board member, the Business Development division is helping to conduct a complete analysis of available public and private resources to better prepare and assist those who call on the Consortium for help. The Orange County Consortium is a countywide economic development group comprised of leaders from cities and the private sector throughout the county. Realizing that working together toward the same goal is far more effective, the Consortium is taking a regional approach to business retention and attraction,working together as a coalition instead of each city competing.against one another. This effort will increase in value as the Consortium nears it's goal of raising capital and hires up to 10 staff focusing on regional marketing, attraction and business retention, TEAM CALIFORNIA The Business Development division is active in statewide trade shows and has access to state resources, funding, and other assistance made available to help local businesses, and is a member of one of the state's economic development programs'Team California.' 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'::F}:$:';'+.ERs:!.!yriL':'t:• !:::$$r+..:.};$,:•}:.::$.}.(5....�+ .:x:3�8a":?•.sr. �:z::lr: '{:�.. .�:•.`:.:::....,.nor::.•':-::n+':>J:..,J}: :.:}�•:>:•:..•-••rt••x.;F.::.: .... .n...v...::'..;.i.�n}:•.5:•i}::`v:•:::::}}'::l::iFr+?.i5::::?•}:h5:�{•:i 4:0:•f.•i.......................... ... .. ....... ..:}}:..yr:{:'.vv:+::: rx:.r:. .,}.>.•x:h?v.:::::�4:•.v:n:.....t:v...v•::v:...v..}.,.,::,....,.....v::v.:::..n:}.....,.;... yy�u� ..N.•rv..:::{..4:^r.54:hvx::rrv::::.vx\•:x{ 1s Follow-up with Chamber Focus Group. 26 Follow-up with EDC regarding Focus Group results. une: 23 Present first draft of Strategy to EDC for review and comment. 7 Present first draft of Strategy to EPC for review and comment. Segember: _ 4 Present completed Economic Development Strategy to City Council for adoption. (g\hc\timeline) 76 mow Am m W n n 3/30/95 QUESTIONS AND ANSWERS ON ECONOMIC DEVELOPMENT STRATEGIC PLANNING 1) What exactly is meant by the term"economic developmerntstmtegic planning?' Economic development strategic planning is a process for assessing a community's competitive position, both within and beyond the borders of its regional market place in terns of job opportunities, tax base, and general quality of life. Moreover, it is a means by which to adjust for any perceived imbalances in the communitys economic base through the provision of proactive business attraction and retention initiatives. Z) Which factors constitute a community's;economic development potential? Community economic development potential may be defined by the ability to generate employment and tax base sufficient to meet the needs of the resident population at a minimum, and ideally, to produce on excess of goods and services available for export to outside markets. 3) Why is Huntington Beach undertaking an economic development strategy at this time? _ Huntington Beach has identified several structural concerns in the composition of its economic base which make it difficult to provide the optimum level of public services due to financial constraints. Namely, the community exhibits below average retail sales activity and shopping opportunities for its residents, a declining commercialfindustrial property tax base, and a less than desired jobs/housing balance forcing many residents to commute outside the immediate vicinity to work 7a 3/30/95 QUESTIONS AND ANSWERS ON ECONOMIC DEVELOPMENT STRATEGIC PLANNING. 4) What form will the strategy document take? Typically, an economic development strategy is divided into two major components: • A community economic base analysis which serves to evaluate the local economy from a statistical standpoint • A marketing action plan for business attraction and retention which emphasizes the community's strengths as a business location, white minimizing and/or rectifying any perceived weaknesses. 5) What are the goals of the strategy? The specific goals of the Huntington Beach economic development strategy are in the process of being formulated through focus group discussions with the business community, meetings with the city council/economic development and economic planning committees, and city staff. The strategy's goal statement is really more of an outcome of the process, but will probably involve the following items at a minimum: Expansion of the retail base. • Expansion of the commercial/industrial property tax base. - • Attraction/retention within targeted business and industry clusters, probably high-tech manufacturing and service-oriented, and tourism related. • Local job creation in the above-mentioned dusters. 6) What are the expected outcomes of the strategy process? The successful economic development strategy will produce measurable results in terms of new tax revenues and jobs, specific to the cluster areas targeted by the plan. While these targets have yet to be specifically identified, they will no doubt follow-to a great extent along the above- mentioned lines. 0 00 >° »>.............. CITY OF HU NTIINGTOIN BEACH ECONOMIC DEVELOPMENT STRATEGY FOCUS GROUP SURVEY Mission Statement To assist in the development and implementation of an Economic Development Strategy designed for the attraction, expansion and retention of business in Huntington Beach. Included in the Strategy will be the evaluation of economic incentives and the reduction of regulatory barriers. Goals: The goals of the City of Huntington Beach for an economic development program are to reduce or eliminate physical and economic blight, createlretain jobs, and enhance the local tax base. Question for Focus Group: What toolsliincentives should the Huntington Beach economic development program have to retain, attract, and help grow businesses? 1. 2. 3. 4. 5. 6. 7 8. 9. 10. Please write down your ideas to answer this question and fax to Jim Lamb at City of Huntington Beach, (714) 375-,5087. Feel free to send as many ideas as you wish. Information as to sender will be confidential, but all answers will be shared with our consultant for inclusion into report to City Council. g.fcgrpsry 81 a XX X. i / .ci W W S T r .: M x. n � r ECONOMIC DEVELOPMENT STRATEGY COMMENTS BY CHAMBER'S FOCUS "BUSINESS GROUP" City walk the:talk— .?::.} t ty City goal to elevate City needs courageto make Pro-business attitude economic development to hard decisions neededI level of importance of environment :::et> a #�,:? .?>:-;. �►y�� :.:m .............:.. ... ....n. :....::::: ....:.....:::?:::::::... .r.....xr:::::::.�::Y???:.::.?:•>}:Jy::it J:•?::::•: ?{.•.: .......:..:.:......:v.;...:.i•.i;>;i^}::.:}:.;::f:i:'•:::vv'rvi:{{: fr:?:•:::is i::•:t v:•:L::::?:iv�i'.?:?:::?:.�•,v�}f;..v: ...f... ...>:... .??;:::<.??:•::•:.,.: ..:.,:•;::.::}•... .....:.}?:<•}:•:«•;;•:•?}<:;•>:<•.... iyt.Jvy:�:::�i�:}}:+};{.vJry,'•.v••Y•::•?i T'::-::'tiy'Y+:}�:'4?>:•} :> d? .........::. ,:.........:.. nr ff:e ri Image y created•I hrou�••.•h•.•. •�A.combination••of •�•�� g city g Koll project is anti-business incentives and pro- message business atmosphere is the key to ED success : . .. EQ "era: `t lv Il� ha�e>se�<a>ne at;�e> €::<::>: :::>::<:::.::�:.:;:A:;::>-:<:.::<-;::.::.>:.<;.;:;:;;<>:.?:.?;>;�.;>??:.>::::�:::>?:.?:. usinesses .................................:...::.... .....:.:......................:..................................... Economic Development A top priority needs to be should begin with for Huntington Beach to retention—existing become business friendly" business toR priority tin ..... :.:::..... :::•> r: ................. ::Treat siness bu _as special, Huntington Beach needs to Eke customers increase tax base,not taxes - ..........:. .. n :.:::::.... businesses. a tiie ci . ........:.»:. Publicize good economic Customer service needs to development decisions,e.g. be emphasized in HB ceremony honoring early payment of readerboard sign debt aCvnn bo fw 83 ECONOMIC DEVELOPMENT STRATEGY COMMENTS BY CHAMBER'S FOCUS "BUSINESS GROUP" 1-3 :..:ed: .:t bank and non- Go Need both b h extra mile— �Find•out what utility j bank access to credit (CDC, ombudsman,permit companies can do to help etc.) assistance,one-stop shop o `tuatio`" ��? ...� ... ... . ........ .. .....�.......... sue:»><> ::: ���....�... �n.......... .... ......:�a.................... •.....:..�n..........:t�. '. ..cam..:.... Till Q f Fee incentives/waivers/ ED Strategy needs to be the reductions implementation component of General Plan ED Element e :::;<>_:.:.:v:::>:;:::< > d::-10 `�'�s�ixzd n use ^i:?4fi?:O:?•i:;^:?::•iiii::^.i:•}iii:4iiiii:•iii:•:?L:f.:•:+:::..?^iih:4:+?^i:4::. :•. .i'::::::.••:•••••••••l.'•::•:vfii:•i:4iY•iii:•:•ii::ii:}:.? ::e.�t�?3�o2iTtien'�::�ol:•.:�fffCCf1�F�.:::•::::.:::: :?....:...................:.;..:•:;:::i'?.::;::s:;>:,:,,?>.?•?..:•:•:: }ii{il••�i::;;?�.�;:;'?�:iii::::i i::`}::::;j:<:} i:j::i:i:i�::iT:C:;i$:iiii:?:;:'::�i?:' :.:.�:.�:: :::v:::w::::::::::•::w::::._:::::•::: :::v::::•:: :.:n:�:._:::: ::.::v:n:w:::::v:•::.�::::.:::•:.::.:.:.:...::::?;•::.....v';??i?i+??4.i???......:...•:?•i..........';.bii::4iii;?4:?.i joint projects where city A combination of rebates portion of incentives and pro- sales/property tax business atmosphere is the key to ED success ?a tru <:as ;:Goorl:;l d>.use::a d:''n �ori�rt ::::_:';:.�;.:;:.;:::.:':::.::.:::::.:.. ::::.:::::.......::..:..:......:....:.:...:.::.:.:.:.:.... 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Need more than just mottos Need more than just talk, real commitment to ED necessary .Ca .. ust::sell.:beac :.::.;?.:::::.;:<. ::. >> > `< €>> >�>���`> > > >>»>< < : ``<���>`>��:<''<�> eeds€ ?::moo;.:: : iB:::::::::::.::......:.:: acted to be st€e ;:.;:.:`.:...... :::::::..::.::::::.:.:.......:..::....::.. ffe v < : ate ...r... area>:>: : ::::>: <<::<>:;;::: :;;:;.;:.::4:.::4:.;:.::?::::.::.i:::;:.>:.;:.>:::«:;:.is4:.:?.::.;:.;:.::.;:.::.;:.::.: Understand your Have information on competition and be better, available land and sites e.g.-Riverside County incentives usiM ss ustri;: rtn 84 ECONOMIC DEVELOPMENT STRATEGY COMMENTS BY CHAMBER'S FOCUS "BUSINESS GROUP" "mar �e k Marketing"package"for Tourism/ocean location ED Strategy needs to be the each business (big must be exploited (not just implementation component ) industry,small retailer, Surf City) of General Plan ED Element etc.) # :°•--.. ::<:<:?:r:>: ........... : . .. ......... �ex�:- eec�sui :: x::»:::;::,: .:i� u`� .>un� log........... .. ... .. ..................... j ; <:> - �� ... ... Public relations imPortant� In Internal education cationwith .-Assess..Huntington Beach j••• advertise in other residents as to importance strengths&weaknesses states/regional ads of businesses.to the city from a marketing (competitive standpoint) :l?etetinewtat:::ci:<::rvantHr eted:;ecanomrc::::<:::::>: 3unt ieeds# fX : :: ..o<.. .:.::::::::.::.:;;:;•>;:.?.................... hur#arS:::::::.::.::.:::.:.:::::.:.:::.:. :•: ?: '.?::: :. :. ::•:;...:: ;:??ii??}:ii:' ...: ..::: ':::ni....:f;•;i{:.•hii;i:i?:•?:.:.!;•:i!::iY;•;:4...: :...;;;;;;::;.w?,:J:;:♦"4:;;:jitii::::?:4:i?tiM??:::ti{:n':{..?iv <:»::>:>::::>:: ::develo. .men#-.-�.ftrac�;::»::>::r::><::>>:::>:ca u ....:.:.......:...::... ..................::sale: -tax:; .rod . r . 'be h::a�ccess:::::::>::::��::�:<::<.::::::.?;•.:�:.;:.??-.:?:.. Ideal locale for clean :. :::?::.: :: Educational•resources :-Several�large•projects�(i.e. industry important,e.g.local Koll) have set a negative community colleges ISO tone for future ED prog.: -<::.-?':.;�.::.:.?;. ram.:::::::.� ::::...::. :.. .::.�::::::;:::: :Pxo :>t e ent::rYec�.s� ns::e. <.;?:.; Euxifui on::Beacx: .:::::::::..:::::::.::.:.:::::.::.�.::::5::. . ::5 .::::::.::::::::::: uzd : hou�srn :<mrx::::>::::>ceremon ...... m . •- -• ••- • •: : :::le : Need morethan�ustmottos Connection between taxes Should be b to•identify-.•�•.•• and services top 10 reasons why business can be more profitable in Huntington Beach N.- de>��Huntin ::::.:..:.:.:...........................................:...::::::...... essful:Econtc:<>::><<::>:::::>>:: ::renfs:and:avaable::s :.P.................. `> Made in HB labels to put Do situational analysis— Identify what sets on products manufactured what do we have/need in Huntington Beach apart in city terms of business types from competition 85 .. ! ::..::.::.:.::::.:. .... .:.::.:.::.............:::......:::.; ..::>:......:.............<.:::<.::; :_: :.:. :. . ....... :....:,...:......... ::....: :: :.... . .... Can't just sell beach,HB Should target LA business Identify"ideal"Huntington needs to be cost effective which could benefit/profit Beach business (i.e. high from Huntington Beach tech,medical/bio-tech location clean industry,professional labor base) and go after them eed:. resent relative;::>::>::::>::::>::>:::::.<>;aklarket fa:MGDoririell ............ .... Need Ev..:blend:and packa e .:r.........::p:.:..:.:....: : :: :._::::::::::. ::.:.:.;.:.::.;.;:.:.;:.;:.;: g .6 ......::::::. A. untiri ton Beach.:.:::::>:>...........:: > :advanta es.:for:: ::.$...:. ......... ..:....... .:::...:.:::::.:... . .:.:. .. ...:.::..ta:..: i e vises':::i e<:'retail .... 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J:...::::::::::::....::.:...:....::.::::::::.::..::...::::.:::::::.: :::::::..:::::::::::. ::;.;:.;:.:.;:.;;:.;:.;..:::.:.::::: :..:.:::::.:::::.::..::.;::.;:.;:.:; R� III& M OW loop IN* JONI lows NMI I ........................................... ................................................. . ........ .......... . ..... ......... .......................... . ... .... ... .... ...... .... . .... ...... . ... ..... ..... . . .... .. .. ... ..... . ......... ... .. ..... . ...... . ......... .... ... ... .... .. . ..... . .. ... l'' ..... .... ........... ............ o0 . .... .... »` >>> ............... > :<> > > ATTACHMENT HIGH TECH CLUSTER BY SIC CODE Industry Industry Group No. No. 357 Computer and Office Equipment 3571 Electronic Computers 3572 Computer Storage Devices 3575 Computer Terminals 3577 Computer Peripheral Equipment 3578 Calculating and Accounting Machines 365 Household Audio and Video Equipment and Audio Recordings 3651 Household Audio and Video Equipment 3652 Phonograph Records and Prerecorded Tapes and Disks 366 Communication Equipment 3661 Telephone and Telegraph Apparatus 3663 Radio and Television Broadcasting and Communications Equipment 367 Electronic Components and Accessories 3671 Electronic Tubes 3672 Printed Circuit Boards 3674 Semiconductors and Related Devices 3675 Electronic Capacitors 3676 Electronic Resistors 3677 Electronic Coils, Transformers and Other Inductors 3678 Electronic Connectors 381 Search, Detection,Navigation, Guidance, Aeronautical, and Nautical, Instruments and Equipment 3812 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments and Controlling Instruments 382 Laboratory Apparatus and Analytical,Optical,Measuring and Controlling Instruments 3821 Laboratory Apparatus and Furniture 3822 Automatic Controls for Regulating Residential and Commercial Environments and appliances 3823 Industrial Instruments for Measurement, Display, and Control of Process Variables and Related Products 3824 Totalizing F1uid.Meters and Counting Devices 3825 Instruments for Measuring and Testing of Electricity and Electrical Signals 3826 Laboratory Analytical Instruments 3827 Optical Instruments and Lenses 88 394 Surgical, Medical, and Dental Instruments and gi 1, cal, Supplies 3941 Surgical and Medical Instruments and Apparatus 3842 Orthopedic, Prosthetic, and Surgical Appliances and Supplies 3843 Dental Equipment and Supplies 3844 X-Ray Apparatus and Tubes and Related Irradiation Apparatus 3845 Electronic and Electrotherapeutic Apparatus 395 Ophthalmic Goods 3851 Ophthalmic Goods 386 Photographic Equipment and Supplies 3861 Photographic Equipment and Supplies ECO-TOURISM CLUSTER BY SIC CODE Industry Industry Group No. No. 581 Eating and drinking places 5812 Eating places 5813 Drinking places (alcoholic beverages) 701 Hotels and motels 7011 Hotels and motels 783 Motion Picture Theaters 7832 Motion picture theaters, except drive-in 7833 Drive-in motion picture theaters 792 Theatrical Producers (except motion picture) Bands, Orchestras, and Entertainers 7922 Theatrical Producers and Miscellaneous theatrical services 7929 Bands, Orchestra,Actors and Other Entertainers 841 Museums and Art Galleries - 8412 Museums and Art Galleries 8422 Arboreta and Botanical or Zoological Gardena 873 Research, Development, and Testing Services 8731 Commercial Physical and Biological Research 8734 Testing Laboratories 951 Administration of Environmental Quality Programs 9511 Air and Water Resource and Solid Waste Management 9512 Land, Mineral, Wildlife, and Forest Conservation Source: Executive Office of the President, Office of Management and Budget 89 0 o� -� ;:;: � ,: �;'.i�'�.i:.�:;;.;:..:•,:..::'':;i`���.:��;: ;:;�:.:�'ii:;�:::y:�::::>:i:.:i:.:':i;i�;�li;;>isi:..,;..:as�:`?`"is�i: >.�9�>i:::;y,::�:; `i`ili'iiii2ia;: i;<Gi2ii>:iiiyiiii5'>�i�i%��iai�� fcii2`ii:; i':`'>'iiiiii:`<�i?"`i�>�f��% <fiasi> iii�� ii2i3iij% iiii '�iiiifi�i:ii;>f:<�>:`2G Jae t:anstrunts..::: .. ... . ... ... :::.: :: :.... 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Commercial Rehab Established by Varies Federal Grants(CDBG) Seismic reinforcement, Noe Encourages improvement of fl Loans/ Local Authority RDA Funds facades,signage, older buildings and business parking districts ion:::::<.::::;:.::::>:. .: : » <:::>:. <: . r 6s <:<: : <>:New construction<retiatz< >> No> sProvides'tax`exert t:interest :Industnal> <.:;;;<>:>: »_ '. 1.0:IvLlhon:>::::>;:::::: : :::Lon Term.......... .I?nvate.sou.ces. arks:::;:::::::>: _ .......................... .... ... :. .: ..:........ ...........:.::.::::::. ..... .g:... ......::.:.:.:.. ....::....................:..:.�.......:.:.::..:.. .. 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Community Facilities Established by Long-Term Property owner Public infrastructure No Allows developer to pass District Bonds Local Authority assessments improvements on on/amortize infrastructure private property costs : .... .... . . �:. »>:;:>:::::>::> <. <:::>::>::><:::<:: ::>:::<:»::::<> :>Loaris`: ts`:;'1"n :«.><':::::::::::::::::::Yes::::> <)rnatileS` .. evelo 6...... . :Taa Allocat<on........::.::.::..... ltshed b:::::::::::.: :I.on .Term::.::::::.. ..I?ro ... :tax:tnc.etnent::::::.:::: :.. .........: ran.. :.a. d.:::::,....... ........................ . :........... .. . .. y.....................$..................... ...... 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Benefit Assessment Established by Long-Term Property tax,business Parking,maintenance, No Allows property/business Districts Local Authority license tax,transient promotions owners to pool resources to occupancy tax assessments fund desired activities/ im rovements Footnotes: ' Non-Redevelopment Agency sales tax arrangements more difficult to demonstrate"public purpose." 2 Depends on source of funding. 3 "Conduit"financing-no city guarantees. &hoTminm) N O� ECONOMIC DEVELOPMENT ZONES SUMMARY OF BENEFITS/INCENTIVES STATE %...%:.:.:.. Ent r: � w......:..... ..: :�:I..... .�`.t 'a�:...I<:�............. ....:...:...... :?:i^ism::isi•?:::{•::4:.?:•??i}.:%::??::::} nnor:::>:.�t`alo :�:::: :#e� ...........:.....:...........................::......... IM :::: vial Iricenti ................. ..... .. . . ... M 100% Net Operating Loss Carry Forward Low Interest Loans (Up to 50%of Project (15 years) Cost, $1 Million Maximum) for M&E, Working Capital,Land Debt Refinance Per Employee Tax Credits ($19,000 or more) Sales Tax Credits on Machinery & _ Equipment Purchases (Up to $20 Million Per Year) Upfront Exp. of Depreciable Property Interest Deductions to Lenders Tax Credit Deferrals to Future Years >::»::>::>::>::;:::<:>::»::;::>::,:>::>::>::;::>::»:...... ::>::>;:<:»:<:>::>::::O..ho....a1 Y.ocal Bene s : :::::::.:::::::::::::.::::::::::: :. ...::::..::.::::::. Building Permit Fee Waivers/Reductions Preferential Leases of Public Land Plan/Permit Expediting Equivalent Value Added Tax Loans Utility Rate Reductions Equivalent Sales Tax Generation loans Low-Interest Loans Direct Loans and Loan Guarantees Zoning Variances Land Assembly Assistance Business License Fee Waivers/Reductions Public Parking Development Assistance Public Infrastructure Supplemental Assistance Planning and Engineering Technical Assistance Educational Assistance to Small Businesses Related to Key Development Issues/Regulatory Requirements Plan/Permit Ex editin ECONOMIC DEVELOPMENT ZONES SUMMARY OF EENEFITSANCE S FEDERAL ::•:Ct:?::':;i';+�'�ii�i$iY:iv:.'•:ii::::~:;:::iiiiiii::?i •1r•e�••.j�..�. �•i:riv'�i:'i:::::::•ti:'i':$::{{:ii:!�ii�:t:i:::?::?!:ii:iY:::i: :::niv.�::::::::.�:.ii':.::•:::-:•:-:•:'-:is i::.::...:...:.::..:::.:N••:::••:::..:::::.:.•:•:.v-:::::•::::. ..... ... :...... » : : ® =a Bdne :..:.::::.::::..;.:.::..;..:.::....:.. ............... ................:.:...::......:..:::.::..::.:.:.:..:.:. .,........ ..... .. . . Per Employee Wage Credits Priority/Targeting of CDBG Funds (up to 20% of first $15,000) Corporate Income Tax Deduction for Section 108 Loan Guarantees Qualified Zone Property Set Aside (up to $37,500) Tax-Exempt Bond Financing Section 108 Economic Revitalization (Up to $3 Million Per Zone) Grants Set Aside "One Stop p p Capital Shop" EDA Public Works Providing Investment Capital and/or Grants Extra Points Business Loans (Varying Program Maximums) Business Information Center Providing EDA Title IX Targeting Technical Business Development Services and Personal Counseling Tax Exempt Facilities Bonds JTPA Grants Set Aside (Various Titles) Social Service Block Grants T rn ................ r � � k � � � �fl�� C Y a . . ..... ..... ... .......... C 6hi arisph ......... ma eac ............ ell, i) Business License Per Employee: Gross Receipts: Per Employee: Gross Receipts: Tax(Annual) $75-:9 3 $60+$0.95 $217.61 +$5.64 $118.25-:9$100,000 +$4-:912 Per$1,000 (+$11.29-$16.29 +$1.18 per$1,000 +$3-!g 52 for occupational! +7.5%sur tax +$2->53 professional services) ..................... all; illftk#;:i ............. .......... .............. ... ....... ... .... ........................... Annual nnua1) . ..... . .......................................a .. ............................................................................................................................ ......................I.......................................... a - ": . �..`.wA...e ..ec.n...... ........... ...... ....... .. .............. .. 3) Transient Occupancy 10.0% 13.0% 12.0% 14.0% Tax(Annual) 4) Traffic':I F C*r��T mpact:� ......... rip feei.......... ......... .......... n .......... .. ...................... .... ... ..... !.................... ........... ............ .......................... . . ....... ..... ......... ............ ... .... .. ... .. ... ..... . ......... ... 5) Arts Fee -0- -0- 1.0% Per Sq. Ft: (One Time) (Downtown) $0.39-$1.57 (Max. 1%) ....... ..... X: ...... X. ...... . ..... ... .......... .a T X,..... ............ ..................................................................................................................................-.................................... .... -..X..............-....................................................-...............................-....................I.......................................... .. I .......... .. -XX ....... ................. ..... ... . . ... .... . .. ....... . ....... 7) Rental of -0- -0- -0- Gross Receipts: Commercial Property $110.86-:9$75,000 +SIAS per$1,000 X: :X X . ... ....... . .. .. ... ........ .... X: ..... . ....... ........... X.......... :IYi.Ntki 0 .0 n o� ' le ....c .. . .mid.Devmnq .. ....... ono p . rl.... ... .. :X.Xi X la Inanc.. . ...... ... ....... . ...... ..... ...... ... .... ... .. .. . .... .. ... .. ....... Ratin Variable: 1 2 3 4 5 6 7 8 9 10 bfidfi Mi. . .............. .. ........ Ann ... ........... . ........... ............. . ...... ....... ......... . . ... ............ ............ . ........... ............... . ............. ... ....... . .... ...... 2) Tax Base Enhancement 00 0 Sales Tax o Property Tax M -imei ed ..................... .........: .:: .. ......... 4) Targeted "Cluster" Catalyst .. .......... 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EL Note: Any project with average score exceeding 7.5 eligible for consideration of financial assistance depending upon availability of funds. 4 / I Council/Agency Meeting Held: Deferred/Continued to: �O� Approved ❑ Conditionally Approved ❑ Denied 6/,/ City Clerk's Signature Council Meeting Date: October 16, 1995 Department ID Number: ED 95-32 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Mayor/Chairman and City Council/Agency Members �--- SUBMITTED BY: Michael T. Uberuaga, City Administrator/Executive irect G� PREPARED BY: David C. Biggs, Director of Economic Development SUBJECT: Approval of The City of Huntington Beach Economic Development Strategy Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The City of Huntington Beach has demonstrated the need to establish an Economic Development Strategy to assist the City Council and staff in prioritizing, and implementing programs and tools to retain, expand, and attract business to the City on a targeted basis. The Strategy will also assist in increasing its competitiveness with other areas and agencies in attracting and retaining businesses. For this purpose, in February of 1995, the City retained the services of Cunningham and Associates, a consultant with expertise in this field to prepare the Strategy document with input and assistance from the Economic Development Committee, Economic Planning Committee, city staff, and various Focus Groups representing selected elements of the private business community in Huntington Beach. This item was reviewed and approved unanimously by the City Council Economic Development Committee on September 22, 1995. Funding Source: None as a result of this action. Recommended Action: Motion To: 1) Adopt the recommendations contained within the Economic Development Strategy. 2) Implement recommendations in priority order according to availability of funding and staff. Alternative Action(s): 1) Do not adopt the Economic Development Strategy. 2) Direct staff to revise and/or modify Economic Development Strategy. i REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: October 16, 1995 DEPARTMENT ID NUMBER: ED 95-32 Analysis: Despite high-income and educational levels on the part of its resident population, Huntington Beach's tax base and employment base are both in need of enhancement. Retail sales tax revenues, in particular, are below the regional average. Morehigh-quality local job opportunities are required to adequately provide for the needs of the available labor force. Proactive steps by both local government and business are necessary in order to address the community needs outlined above. The Economic Development Strategy strives to provide a model for analyzing the local economic base, and a blueprint for implementing an economic development program designed to attract and retain business in two key clusters: Tourism and High-tech. In addition, special emphasis is also placed on expanding the City's retail trade sector, particularly the North Huntington Beach and Downtown business districts which form the City's primary retail anchors. The Strategy presents a series of prioritized recommendations, related to and compatible with the updated General Plan Economic Development and Land Use Elements, which are aimed at maximizing the benefits of prudent business expansion at the lowest possible cost in terms of public investment. The recommendations are intended to guide the direction of City economic development programmatic activities in order to achieve the City Council's stated goals related to job creation and expansion of the tax base. The following list of recommendations is divided into one of two categories according to their relative cost/benefit in terms of implementation. • Higher Priority • Lower Priority It should be noted that each of the referenced items are very important, and take precedence over the many potential activities and projects which are not mentioned. Moreover, items which may be of high potential benefit, but also bear high costs, are generally ranked lower than those of high benefit/low cost. Higher Priority 1) Adopt an objective economic development rating criteria for evaluating the potential benefits of particular private business concerns to Huntington Beach in terms of jobs, tax base, image enhancement, and other factors in order to gauge the fiscal impact of proposed project. 2) The following financial incentives which are either not being utilized or could be applied more extensively, are recommended for consideration according to availability of sufficient staff and funds. RCASTRAT.DOC -2- 09/29/95 9:16 AM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: October 16, 1995 DEPARTMENT ID NUMBER: ED 95-32 • US Small Business Administration Loans and Loan Guarantees • Sales Tax Generation Equivalency Loans • Value Added Tax Equivalency Loans • Micro Loans for Machinery and Equipment • Use-Specific State Loan Guarantees • Commercial Rehabilitation Loans • Commercial Facade Rebates/Grants • Commercial Tenant Improvement Loans • Tax Exempt Industrial Development Bonds • Community Facilities District Bonds • Fee Waiver/Reductions • Tax Allocation Bonds • Business Improvement Districts • Hotel Districts 3) Develop a site-specific marketing program, utilizing all available economic development tools including the 'Red Team" recruitment approach, to attract business, especially targeted firms in the identified High Tech and Tourism Clusters to available properties. 4) Establish a Real Estate Broker Network to apprise local commercial/industrial brokers of current City plans and policies, while taking advantage of their expertise and business contacts to attract and retain business in the community. 5) Implement specific action items including: • Target business attraction efforts toward firms operating within the incorporated boundaries of the City of Los Angeles due to their inordinately high tax burdens. • Undertake a Restaurant Attraction Program to bring more fine dining establishments to Huntington Beach, especially in the downtown area. • Actively seek to attract major retail tenants, including movie theaters, to the Edinger Corridor area and Huntington Beach Mall. • Complete redevelopment of the Downtown Business District in order to convey a "ready for business" look and feel. • Strive to attract the highest sales tax-generating uses to available vacant or under- utilized sites located in Commercial zones. • Strongly consider adaptation of formerly institutional sites, such as schools, to large discount retail uses. • Consider increasing Economic Development Funding. RCASTRAT.DOC -3- 10/05/95 1:56 PM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: October 16, 1995 DEPARTMENT ID NUMBER: ED 95-32 6) Concentrate on attracting and retaining job and tax generating tenants in the High Tech Cluster, particularly related to subcontractors and suppliers to the McDonnell Douglas Corporation facility. 7) Continue to expand cooperative ventures and relationship with Huntington Beach Chamber of Commerce aimed at both retention of existing business and attraction of new business. 8) Continue to work with the Conference and Visitor's Bureau to attract more tourists and visitors to Huntington Beach in keeping with the Tourism Cluster theme, and construct more hotels so the tourists can stay in Huntington Beach. 9) Continue to expand the successful Mayor's Business Forums and Industrial Interview Program as a means of promoting business retention by addressing business needs prior to any relocation decisions being made. 10) Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's long- range future in terms of "Opportunities and Constraints," particularly as related to international trade and commerce. 11) Evaluate the financial feasibility of development of a Conference Center facility to attract more luxury hotel growth and business visitors. Lower Priority 12) Adopt formal policies and procedures for the City's Development Assistance Committee in order to help expedite the plan/permit review process and centralize decision-making. 13) Create a methodology for a simplified consolidated fee schedule so that a developer/user can readily pre-determine direct costs related to a particular project. 14) Strive to attain a Jobs/Housing Balance of 1.00 by creating at least one new employment opportunity for every new housing unit approved for construction. 15) Work with the Chamber of Commerce to expand services and staff support to the Small Business Assistance Center in order to serve the requirements of Huntington Beach's many small business establishments. 16) Work closely with Golden West College and the Orange County Private Industry Council (PIC) to create industry-specific job training programs and resources to augment the City's Economic Development Program initiatives. RCASTRAT.DOC 4- 09/29/95 9:16 AM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: October 16, 1995 DEPARTMENT ID NUMBER: ED 95-32 17) Work in partnership with the private business community on a regional basis, through the Orange County Business Council/Economic Development Consortium, to attract targeted new business. 18) Working with local businesses and property owners, consider creating other Business Improvement Districts, such as the successful collaborative effort by the Huntington Beach Auto Dealers Association, which funds the maintenance and operation of the 1-405 readerboard sign. 19) Create a comprehensive and regularly updated Commercial/Industrial Space Inventory utilizing data provided by real estate firms covering the Huntington Beach area. 20) Focus High Tech.attraction incentives on Manufacturing-Distribution, and Research and Development firms in the 50,000 - 150,000 square foot size range. 21) Institute a "Key Tenant Loan Program" for the Downtown and North Huntington Beach Areas in order to attract targeted retailers to these key business districts. 22) Develop a High Tech Business Incubator Facility for the purpose of "growing" targeted business enterprises of particular benefit to the local economy..... . 23) In keeping with the policy directives of the City General Plan, encourage the development of concentrated "commercial nodes" along Beach Boulevard through special economic development incentives made available to businesses located along this key corridor. Environmental Status: N/A Attachment(s): I Pa o - 1. Economic Development Strategy (Council Members). 2. Executive Summary of Economic Development Strategy. (g\hc\memos\rca strat) RCASTRAT.DOC -5- 09/29/95 9:16 AM Cunningham & Associates MUNICIPAL MANAGEMENT CONSULTING CITY OF HUNTINGTON BEACH ECONOMIC DEVELOPMENT STRATEGY .EXECUTIVE SUMMARY" ... August, 1995 673 Vista Bonita Newport Beach,California 92660 ' 714/644-7304 FAX 714/644-9357 Executive Summary The City of Huntington Beach Economic Development Strategy is divided into two major sections identifying our position in the Greater Los Angeles Area regional economy and laying out a marketing plan. The aim of the marketing plan is to: (1) attract desirable new businesses and industry, and(2)retain existing employers on a targeted basis. The effort identifies the City's fundamental economic development mission: "In order to promote business and create new jobs, develop an aggressive program that would use entrepreneurial approaches to attract and retain commercial and light industrial businesses, high-tech manufacturing and retail business." The Strategy strives to address the following economic development issues, and relate each to specific "Higher Priority" recommendations listed at the conclusion of the document. 1) Community Attributes • Challenge How to identify and package the essence of what makes Huntington Beach the ideal location to live, work, and play. • Response Concentrate economic development efforts on selling Huntington Beach's unique blend of tourist and recreation-oriented amenities related to its ocean beaches and natural environment, coupled with its vast high-tech business potential related to low 1 taxes, an affluent, highly trained labor pool, and ample supply of quality housing available to all income levels. • Related Recommendations - Expand cooperative ventures and relationship with Huntington Beach Chamber of Commerce aimed at both retention of existing business and attraction of new business. - Work with the Conference and Visitor's Bureau to attract more tourists and visitors to Huntington Beach in keeping with the Tourism Cluster theme, and construct more hotels so the tourists can stay in Huntington Beach. - Expand the successful Mayor's Business Forum and Industrial Interview Program as a means of promoting business retention by addressing business needs prior to any relocation decisions being made. 2) Clusters • Challenge How to encourage existing business expansion and new business attraction which accrues the highest economic development benefits for Huntington Beach. • Response In addition to generalized business expansion and tourism/visitor promotional efforts, focus business attraction and retention activities upon identified "Tourism" and "High Tech" clusters, as well as expansion of the retail trade sector of the local economy. 2 • Related Recommendations - Develop a site-specific marketing program, utilizing all available economic development tools including the 'Red Team" recruitment approach, to attract targeted firms especially in the identified High Tech and Tourism Clusters to available properties. - Establish a Real Estate Broker Network to apprise local commercial/industrial brokers of current City plans and policies, while taking advantage of their expertise and business contacts to attract and retain business in the community. - Concentrate on attracting and retaining job and tax generating tenants in the High Tech Cluster, particularly related to subcontractors and suppliers to the McDonnell Douglas Corporation facility. 3) Targets • Challense How to effectively focus upon the most favored business/industrial clusters. • Response Utilizing a market segmentation approach, target incentives towards individual firms and evaluate the relative cost/benefit to Huntington Beach in terms of: - Economic benefit - Tax base enhancement - Public financial investment - Targeted "Cluster" Catalyst Effect 3 • Related Recommendations - Target business attraction efforts toward firms operating within the incorporated boundaries of the City of Los Angeles due to their inordinately high tax burdens. - Undertake a Restaurant Attraction Program to bring more fine dining establishments to Huntington Beach, especially in the downtown area. - Actively seek to attract major retail tenants, including movie theaters, to the Edinger Corridor area and Huntington Beach Mall. - Strive to attract the highest sales tax-generating uses to available vacant or under-utilized sites located in Commercial zones. 4) Priorities • Challenge How to effectively prioritize the many economic development options currently at hand for Huntington Beach. • Response Utilizing available marketing tools and financial incentives, adopt the highest benefit/lowest cost alternatives which serve to further achievement of Huntington Beach's economic development goals. 4 • Related Recommendations Adopt an objective economic development rating criteria for evaluating the potential benefits of particular private business concerns to Huntington Beach in terms of jobs,tax base, image enhancement, and other factors. The following financial incentives which are either not being utilized or could be applied more extensively, are recommended for consideration according to availability of sufficient staff and funds. • U.S. Small Business Administration Loans and Loan Guarantees • Sales Tax Generation Equivalency Loans • Value Added Tax Equivalency Loans • Micro Loans for Machinery and Equipment • Use-Specific State Loan Guarantees • Commercial Rehabilitation Loans • Commercial Facade Rebates/Grants • Commercial Tenant Improvement Loans • Tax Exempt Industrial Development Bonds • Community Facilities District Bonds • Fee Waiver/Reductions • Tax Allocation Bonds • Business Improvement Districts • Hotel Districts 5 Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's long-range future in terms of"Opportunities and Constraints", particularly as related to international trade and commerce. Complete redevelopment of the Downtown Business District in order to convey a"ready for business" look and feel. Strongly consider adaptation of formerly institutional sites, such as schools, to large discount retail uses. 5) Conclusion • Challenge Huntington Beach currently has deficiencies in its economic base related to retail sales activity, particularly around its northernmost anchor at the Huntington Center/Edinger Corridor, and despite strong demographic characteristics on a citywide basis. In addition to retail, Huntington Beach needs to develop to its fullest potential within business and industrial sectors related to the natural shoreline environment and the highly trained professional labor pool which serve to define the essence of the community's identity as a business location. • Response It is the intent of the Economic Development Strategy to identify and implement general business attraction and retention initiatives in particular directed at two 6 primary business clusters -High Technology and Tourism as the key underpinning of this document to accomplish the Mission Statement stated above. • Related Recommendations Consider implementation of all Strategy Recommendations, both Higher Priority and Lower Priority. 7 Introduction With a population approaching 200,000 residents, Huntington Beach is the third largest city in metropolitan Orange County, California. Situated along eight miles of scenic Pacific Ocean beach front, the City attracts over nine million tourists and visitors annually. The U.S. Open of Surfing, to be held in August, is among the many water-oriented sporting competitions taking place immediately adjacent to the revitalized Downtown area. A world renowned environmental treasure, the Bolsa Chica Ecological Reserve, has been selected to play host to the 1996 Watchable Wildlife Conference. The City's affluent, highly educated populous experiences a variety of lifestyle and housing options in this predominantly residential enclave which has been named the "Safest Big City in America". The City provides many employment opportunities for local residents ranging from hospitality, retail, and tourism-related jobs in the Downtown and North Huntington Beach business districts to high technology-oriented professional positions at the City's largest manufacturing firm, McDonnell-Douglas Corporation. As is the case with public safety for residents and visitors, Huntington Beach has been ranked by California Business Magazine as the"Best Big City for Business in California." (guoreportsWmunary) Cunningham & Associates MUNICIPAL MANAGEMENT CONSULTING AA cu :;i�:Y�V fi� UT 1 �1 1-®t►IL,�i � d�.OP lY"l bit Q.:: � ...;;: Prepared by. Cunningham & Associates August, 1995 673 Vista Bori to'Newport Be"California 9260'714/644-7304' FAX 714/644-9357 Table ®f Contents Me ExecutiveSummary............................................................................................................1-7 Introduction......................................................................................................................8-10 Part I-Community Economic Ease Analysis Relationship of Economic Development Strategy to City General Plan.........................................................................................11-15 Regional Economic Perspective.....................................................................................15-21 RealEstate Trends..........................................................................................................22-24 Reliance on Retail Trade Sector.....................................................................................25-29 Dart II-Marketing Plan for Business Attraction and Retention City Council Policy Role....................................... City of Huntington Beach Economic Development Program.........................................30-32 Focus Group Discussions...............................................................................................32-37 Cluster Driven Business Attraction and Retention..........................................................37-40 Economic Development Incentives................................................................................40-48 Recommendations..........................................................................................................49-54 Reference Fables Page 1) Greater Los Angeles Area Regional Population/Employment Ratios...............................:...................................................17 2) Major Orange County Business/Industrial Sectors......................................................19 3) Locational Quotients, Orange County/U.S..................................................................20 4) Basic Orange County Business/Industrial Subsectors.................................................21 5) Manufacturing-Distribution/Research and Development Space Inventories Vacancy and Absorption..........................................23 6) Office Space Inventory Vacancy and Absorption........................................................24 7) Retail Space Inventory Vacancy and Absorption........................................................25 8) Retail Sales Activity-Major Orange County Cities....................................................27 9) Taxable Retail Sales Orange County, West County Cities..........................................30 Attachments Page . 1) Shopping Center Market Analysis.................................................................... 57 2) Shopping Center Locations.............................................................................. 59-66 3) City of Huntington Beach Economic Development Programs......................... 68-71 4) Economic Development/Redevelopment Services Budget/ Staffing Comparisons................................................................................ 73 5) Schedule of Public Discussion/Input to the Planning Process...................•..... 75 6) Questions and Answers on Economic Development Strategic Planning.....,.. 78-79 7) Focus Group Survey....................................................................................... 81 8) Comments By Chambers Focus Bu smess Group 83-86 ....................................... 9) High Tech Cluster by SIC Code/Tourism Cluster by SIC Code............. 88-89 10) Financial Incentives: Debt Instruments.................................................... 91 11) Economic Development Zones- Summary of Benefits/Incentives............ 93-94 12) Comparison of Development Fees and Tenant Costs................................ 96 13) Economic Development Incentive Criteria for Financial Assistance.......... 98-102 Executive,Summary The City of Huntington Beach Economic Development Strategy is divided into two major sections identifying our position in the Greater Los Angeles Area regional economy and laying out a marketing plan. The aim of the marketing plan is to: (1) attract desirable new businesses and industry, and (2) retain existing employers on a targeted basis. The effort identifies the City's fundamental economic development mission: "In order to promote business and create new jobs, develop an aggressive program that would use entrepreneurial approaches to attract and retain commercial and light industrial businesses, high-tech manufacturing and retail business." The Strategy strives to address the following economic development issues, and relate each to specific "Higher Priority" recommendations listed at the conclusion of the document. 1) Community Attributes 0 Challenge How to identify and package the essence of what makes Huntington Beach the ideal location to live, work, and play. • Response Concentrate economic development efforts on selling Huntington Beach's unique blend of tourist and recreation-oriented amenities related to its ocean beaches and natural environment, coupled with its vast high-tech business potential related to low taxes, an 1 affluent, highly trained labor pool, and ample supply of quality housing available to all income levels. • Related Recommendations - Expand cooperative ventures and relationship with Huntington Beach Chamber of Commerce aimed at both retention of existing business and attraction of new business. - Work with the Conference and Visitor's Bureau to attract more tourists and visitors to Huntington Beach in keeping with the Tourism Cluster theme, and construct more hotels so the tourists can stay in Huntington Beach. - Expand the successful Mayor's Business Forum and Industrial Interview Program as a means of promoting business retention by addressing business needs prior to any relocation decisions being made. 2) Clusters • Challenize How to encourage existing business expansion and new business attraction which accrues the highest economic development benefits for Huntington Beach. 2 • Response In addition to generalized business expansion and tourismMsitor promotional efforts, focus business attraction and retention activities upon identified "Tourism" and "Ifigh Tech" clusters,as well as expansion of the retail trade sector of the local economy. • Related Recommendations Develop a site-specific marketing program, utilizing all available economic development tools including the "Red Team" recruitment approach, to attract targeted firms especially in the identified High Tech and Tourism Clusters to available properties. Establish a Real Estate Broker Network to apprise local commerciaVindustrial brokers of current City plans and policies, while taking advantage of their expertise and business contacts to attract and retain business in the community. Concentrate on attracting and retaining job and tax generating tenants in the High Tech Cluster, particularly related to subcontractors and suppliers to the McDonneT Douglas Corporation facility. 3) Targets • Challenge How to effectively focus upon the most favored businessrndustrial clusters, 3 • Response Utilizing a market segmentation approach, target incentives towards individual firms and evaluate the relative cost/benefit to Huntington Beach in terms of: - Economic benefit - Tax base enhancement - Public financial investment - Targeted "Cluster" Catalyst Effect • Related Recommendations - - Target business attraction efforts toward firms operating within the incorporated boundaries of the City of Los Angeles due to their inordinately high tax burdens. - Undertake a Restaurant Attraction Program to bring more fine dining establishments to Huntington Beach,especially in the downtown area. - Actively seek to attract major retail tenants, including movie theaters, to the Edinger Corridor area and Huntington Beach Mall. - Strive to attract the highest sales tax-generating uses to available vacant or under- utilized sites located in Commercial zones. 4 4) Priorities • Challenge How to effectively prioritize the many economic development options currently at hand for Huntington Beach. • Response Utilizing available marketing tools and financial incentives, adopt the highest benefit/lowest cost alternatives which serve to further achievement of Huntington Beach's economic development goals. - • Related Recommendations Adopt an objective economic development rating criteria for evaluating the potential benefits of particular private business concerns to Huntington Beach in terms of jobs, tax base, image enhancement, and other factors. The following financial incentives which are either not being utilized or could be . applied more extensively, are recommended for consideration according to availability of sufficient staff and funds. • US Small Business Administration Loans and Loan Guarantees • Sales Tax Generation Equivalency Loans • Value Added Tax Equivalency Loans • Micro Loans for Machinery and Equipment 5 • Use-Specific State Loan Guarantees • Commercial Rehabilitation Loans • Commercial Facade Rebates/Grants • Commercial Tenant Improvement Loans • - Tax Exempt Industrial Development Bonds - • Community Facilities District Bonds • Fee Waiver/Reductions • Tax Allocation Bonds ® Business Improvement Districts • Hotel Districts - Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's long-range future in terms of"Opportunities and Constraints", particularly as related to international trade and commerce. Complete redevelopment of the Downtown Business District in order to convey a "ready for business" look and feel. Strongly consider adaptation of formerly institutional sites, such as schools, to large discount retail uses. 6 5) Conclusion • Challenge Huntington Beach currently has deficiencies in its economic base related to retail sales activity, particularly around its northernmost anchor at the Huntington Center/Edinger Corridor, and despite strong demographic characteristics on a citywide basis. In addition to retail, Huntington Beach needs to develop to its fullest potential within business and industrial sectors related to the natural shoreline environment and the highly trained professional labor pool which serve to define the essence of the community's identity as a business location. - Response It is the intent of the Economic Development Strategy to identify and implement general business attraction and retention initiatives in particular directed at two primary business clusters - High Technology and Tourism as the key underpinning of this document to accomplish the Mission Statement stated above. 0 Related Recommendations Consider implementation of all Strategy Recommendations, both Higher Priority and Lower Priority. 7 INTRODUCTION With a population approaching 200,000 residents, Huntington Beach is the third largest city in metropolitan Orange County, California. Situated along eight miles of scenic Pacific Ocean beach front,the City attracts over nine million tourists and visitors annually. The U.S., Open of Surfing,to be held in August, is among the many water-oriented sporting competitions taking place immediately adjacent to the revitalized Downtown area. A world renowned environmental treasure, the Bolsa Chica Ecological Reserve, has been selected to play host to the 1996 Watchable Wildlife Conference. The City's affluent, highly educated populous experiences a variety of lifestyle and housing options in this predominantly residential enclave which has been named the "Safest Big City in America." The City provides many employment opportunities for local residents ranging from hospitality, retail, and tourism-related jobs in the Downtown and North Huntington Beach business districts to high technology-oriented professional positions at the City s largest manufacturing firm, McDonnell- Douglas Corporation. As is the case with public safety for residents and visitors, Huntington Beach has been ranked by California Business Magazine as the"Best Big City for Business in California." Yet, Huntington Beach is not without its challenges from an economic development perspective. The jobs-housing balance is such that many residents must necessarily commute outside the City, and even the immediate area to find suitable employment. The City's retail sector is somewhat weak, with per capita retail sales at one of the lowest levels of any major city in Orange County. The community's relative isolation, in terms.of major freeway access, further limits realization of its potential as a 8 regional business and/or shopping destination. The effectiveness of the Strategy will ultimately be measured by its ability to respond to the challenges currently at hand. In an effort to make Huntington Beach the best possible place in which to live, work and do business, the City Council recently adopted a series of goals and objectives directly related to the fundamental rationale behind the creation of an economic development strategy for the City. GOAL: "Establish policies and strategies to ensure a viable business environment throughout the community and expand the City's revenue base". - One related objective, in particular, reflects the City's desire to take a proactive approach toward the achievement of its overall economic development goal: "In order to promote business and create new jobs, develop an aggressive program that would use entrepreneurial approaches to attract and retain commercial and light industrial businesses, high-tech manufacturing and retail business." The City of Huntington Beach Economic Development Strategy which follows is an effort to operationalize and implement the aforementioned City Council goals and objectives, while also addressing the underlying reasons for embarking upon the process at the present time. The strategy is divided into two major sections: 9 1) Community Economic Base Analysis 2) Marketing Plan for Business Attraction and Retention 10 COMM(INITYECONOMIC BASE ANALYSIS Relationship of Economic Development Strategy to City General Plan The logical starting point in undertaking an economic development strategic planning process for any community is to access the characteristics and conditions of the existing economic base. This information enables local policy makers and managers to access the city's strengths, as well as its areas of challenge, on an objective,quantitative basis. Huntington Beach has the advantage of currently being involved in a comprehensive update of its General Plan. This is the long-range planning document which guides the City's future direction in terms of the following areas of concern or "elements", some of which are mandated by State law, and others such as Economic Development,which are included at the discretion of local government: • Land Use • Urban Design • Housing • Historic and Cultural Resources • Economic Development • Circulation • Public Facilities and Public Services • Recreation and Community Services • Utilities • Environmental Resources/Conservation 11 • Air Quality • Environmental Hazards • Noise The already completed General Plan Economic Development Element provides an excellent existing point of reference and foundation for the Economic Development Strategy. The Strategy can be viewed as a companion piece which serves to provide an implementation mechanism for much of the general direction and data base which the Element provides. In addition, the Plan's band Use Element effectively delineates the parameters, on a site and area-specific basis, for guiding the City's business attraction and retention efforts. The City's foresight in positioning the Strategy soon after the completion of these two important long-range planning documents serves to enhance the effectiveness of the strategy as an implementation tool. The "Goals, Objectives, and Policies" section of the Economic Development Element specifically references its relationship to the strategy with the following statements: • "The Economic Development Element sets forth the broad economic goals and objectives of the City. Economic Development strategies will be prepared in the future to implement these goals and objectives." • "Create,an Economic Development Strategy that: a) is based on the most recent growth and economic forecasts, and b) reflects both the City perspective and the business community perspective for economic development". 12 The Element discusses Huntington Beach's competitive position within the larger Orange County subregional marketplace, as well.as the effects of changing land use patterns upon the local economy. The latter trend has been evidenced by a shift of the more "land-intensive" manufacturing and distribution uses to less expensive areas such as Riverside-San Bernardino, and to a lesser extent, outside of California entirely. Traditional heavy industrial activity has gradually been replaced to a large extent by commercial office, retail, and high technology fight manufacturing and research and development (R&D) uses. As a result, the Element predicts that future business growth will be occurring in firms at the forefront of technological change and/or new technologies, highly automated firms requiring skilled technical and professional staff, and larger corporations where it is feasible and more efficient to separate basic manufacturing and warehouse/distribution functions from administrative office, sales,and research and development activities. From a competitive standpoint, Huntington Beach lagged behind the overall county in annual employment growth during most of the 1980's in both the Retail Trade and Services sectors of the local economy. In addition,.the City actually experienced a net decline in annual retail sales activity between 1985 and 1990, the worst performance of any City in the West County area. The Element also identified significant retail "leakage" as many Huntington Beach residents chose to spend their disposable income outside city borders. The report's retail section concludes by saying that: "Any retail positioning strategy for the near- and long-term future will need to identify the practical and relevant market niches which the City should pursue, rather than presume to attempt head-on competition with already established nearby centers and specialties." 13 The Land Use Element, unlike the optional Economic Development Element, is a required element of the City General Plan under existing State Law. The Land Use Element governs allowable types of land uses in particular geographic areas of the city, and all City zoning regulations must be in conformance with its provisions. Because of its critical long-range planning function, this Element is especially important to the Economic Development Strategy. Developable land,both in public and private use, represents the following relative shares of Huntington BeacNs total land area: % Acres •Residential 41.3 7,321 • Commercial 7.5 1,325 •Industrial 8.3 1,476 • Institutional 1.1 199 •Public/Quasi-Public 11.1 1,959 •Vacant 2.7 473 The preceding figures show that Huntington Beach, with only about 15 percent of its total land area in commercial or industrial use, and less than 3 percent currently vacant, would have a difficult time taking many major new economic development project initiatives, particularly those involving land intensive retail or manufacturing uses. The Element identifies less than 20 such potential sites, and only two of which exceed 17 acres in size. 14 As is the case with City zoning, it is essential that the Land Use and Economic Development Elements be compatible and internally consistent. For example, the Land Use Element states that city government should: "Promote development in accordance with the Economic Development Element". It is important to note, therefore, that the Land Use Element places the following future growth limitations on commerciArindustrial development in the City. •Commercial Retail 3,165,000 s.f •Commercial Office 1,570,000 s.f. •Industrial 2,505,000 s.f. •Hotel 2,200 rooms _ At the same time, the Land Use Element demonstrates its consistency with the goals of the Economic Development Element via the following policy directive: "Accommodate the development of additional jobs-generating land uses which improve the 1992 jobs to housing ratio of 0.82 to 1.0 or greater, to meet objectives of the Regional Comprehensive Plan and Air Quality Management Plan. These should capitalize upon existing industrial'strengths'and emphasizing the clustering of'like!or'thematic'industries." Regional Economic Perspective The City of Huntington Beach is strategically located in the five-county Greater Los Angeles Metropolitan Area, one of the world's largest and most diverse economic regions. Comprised of the 15 counties of Orange, Ventura, San Bernardino, Riverside, and Los Angeles, the region has a combined total population exceeding 15 million. The economy of this complex,geographically dispersed area has suffered, in particular, in recent years from the nationwide decline in aerospace and defense-related manufacturing. The persistent national recession, coupled with an untimely string of natural disasters, has contributed to a general weakening of the regional economic base along with a concomitant loss of many high-wage technical and professional-level jobs. Huntington Beach is situated within the West Orange County urban area, one of 26 such concentrations making up the majority of the Greater Los Angeles regional economy. These urban areas can be characterized as "export-oriented" business centers which typically import workers from the surrounding vicinity, while exporting goods and services to other areas both within and beyond the boundaries of the region. With nearly one-half of California's total population residing in the Greater Los Angeles Area, the contribution of the region to the overall state economy cannot be underestimated. An important indicator of a region's economic health is a statistic known as the"employment-population ratio". Table l depicts this ratio for the individual counties, the region, the state, and the City of Huntington Beach. As is apparent from viewing this chart, employment-population ratios for both Orange County as a whole and the City of Huntington Beach in particular, exceed the regional and state figures to a significant degree. Generally, this indicates that the City and County are major employment centers importing skilled labor from outlying areas to fill available jobs. It is important to note, however, that 16 while the County's ratio increased slightly during the 1990-94 period, the City's declined by approximately 5 percent. Table 1 Greater Los Angeles Area Regional Employment/Population Ratios 1990 1994 Pop. Emp. Ratio Pop.Emp. Ratio Change California 29,557,800 12,494,900 .42 31,960,500 14,428,700 .45 7.1 5-County Region 14,438,700 6,569,800 .46 15,484,500 6,925,000 .45 -2.2 Los Angeles 8,832,500 3,981,000 .45 9,230,600 4,121,000 .45 — Ventura 666,800 342,800 .51 708,200 .349,200 .49 -3.9 Riverside 1,144,400 391,000 .34 1,347,400 536,200 .40 17.6 San Bernardino 1,396,600 521,000 .37 1,591,780 638,200 .40 8.1 Orange 2,398,400 1,172,400 .49 2,596,500 1,280,400 . .50 2.0 Huntington Beach 181,100 109,200 .60 189,200 107,800 .57 -5.0 Source:California Department of Finance and California Employment Development Department. On the other hand, the more subtle yet less reliable, "jobs-housing balance," which incorporates the actual number of jobs generated by establishments located in the City rather than the employment status of local residents, is below the optimum index of 1.00. The City's 0.91 index indicates a need to bring the estimated number of jobs(67,100) into closer alignment with that of housing units(73,900). The "jobs" figure is a less exact estimate than is the case with "employment" and should, therefore, be viewed with some caution. One method for identifying primary or "basic" business and industrial sectors within a given local economy is called the "locational quotient" (LQ). The locational quotient is a simple, yet revealing, 17 indicator which is calculated by dividing the percentage of local employment in a particular sector by the national share in the same sector. A locational quotient of greater than 1.00 indicates a basic or export producing industry which exceeds the consumption needs of the local marketplace. Table 2 illustrates locational quotients within major categories of business and industry, officially known as "Standard Industrial Classification" (SIC) codes. Three major sectors - Durable Goods Manufacturing with an LQ of 1.32, Wholesale Trade at 1.25, and Finance, Insurance, and Real Estate (FIRE) at 1.32-emerge as overwhelmingly basic industries within Orange County, thereby warranting closer analysis as focal points in terms of their economic development potential. For the purposes of this study, a community's economic development potential may be defined by its ability to generate employment and tax base sufficient to meet the needs of its resident population at a minimum, and ideally,to produce an excess of goods and services available for export to outside markets. 18 Table 2 MAJOR ORANGE COUNTY BUSINESSANDUSTRIAL SECTORS 1994 SIC OC us LLO Goods Producing 21.9% 20.7% 1.06 Mining 0.0 0.1 - Construction 4.0 4.4 0.91 Manufacturing 18.3 15.8 1.16 Durable Goods 11.9 9.0 1.32 Nondurable Goods 6.4 6.8 0.94 Service Producing 77.5 79.3 0.98 Transportation/Utilities 3.5 5.2 0.67 Wholesale Trade 6.6 5.3 1.25 Retail Trade 17.6 17.9 0.98 Finance/Insurance/Real 7.8 5.9 1.32 Estate Services 30.5 28.2 1.09 Government 11.6 16.7 0.69 Source: U.S. Department of Labor, Bureau of Labor Statistics and California Employment Development Department. Table 3 provides a historical perspective regarding Orange County's locational quotients in the aforementioned major business/industrial sectors. While no clear trends are evident over the past five years, the chart does illustrate the highly publicized downturn in Construction ( - 12.5%), due to a general decline in regional building activity, as well as an upswing(+ 10.2%) in Transportation/Utilities due to an increasing regional emphasis on mass transit modalities. The area's basic export sectors - Finance/Insurance/Real Estate, Wholesale Trade, and Manufacturing - remain unchanged from 1990 up to the present. 19 Table 3 Locational Quotients ®range County[U.S. SIC 1990 1991 1992 1993 1994 Change Goods Producing 1.13 1.13 1.15 1.08 1.08 -4.4 Mining 0.17 0.17 0.17 0.20 0.20 17.6 Construction 1.04 1.14 1.02 0.93 0.91 -12.5 Manufacturing 1.19 1.18 1.16 1.15 1.16 -2.5 Service Producing 0.96 0.97 0.97 0.97 0.98 2.1 Transportation/ Utilities 0.59 0.59 0.60 0.64 0.65 10.2 Wholesale Trade 1.21 1.13 1.27 1.26 1.25 3.3 Retail Trade 1.04 1.00 1.00 1.01 0.99 -4.8 Finance/Insurance/ - Real Estate 1.34 1.24 1.38 1.36 1.33 -0.1 Services 1.05 1.07 1.06 1.08 1.08 2.9 Government 0.65 0.67 0.66 0.67 0.70 7.7 Source: U.S. Department of Labor, Bureau of Labor Statistics and California Employment Development Department. Table 4 further reduces these major SIC code groupings to their component parts in an effort to discover especially well-represented sectors in the county economic base. The following six basic categories of business and industry exhibit locational quotients at or above 1.25: -Industrial Machinery and Equipment Manufacturing -Electronic and other Electrical Equipment Manufacturing -Instruments and related products Manufacturing -Wholesale Trade-Durable Goods -Insurance -Real Estate In addition, despite the fact that the overall Services sector locational quotient was only L08, three of its subsectors are very well represented locally: -Business Services -Amusement and Recreation Services -Engineering and Management Services 20 Table 4 BASIC ORANGE COUNTY BUSINESS/INDUSTRIAL SUBSECTORS 1994 SIC OC US Durable Goods Manufacturing 1.89% 9.04% 1.32 Lumber and Wood products/ Furniture and Fixtures 0.89 1.07 0.83 Stone,clay,and glass products 0.22 0.47 0.47 Primary metal industries/ Fabricated metal products 1.75 1.82 096 Industrial machinery and equipment 2.33 1.71 1.28 Electronic and other electrical equipment 2.20 1.37 1.61 Transportation equipment 1.68 1.52 1.11 Instruments and related products 2.52 0.74 3.41 ** Misc. manufacturing 0.30 0.33 0.91 Wholesale Trade 6.60 5.34 1.25 Durable goods 4.57 3.04 1.50 Nondurable goods 2.03 2.29 0.89 Finance/lnsurance/Real Estate 7.78 5.93 1.31 Finance 3.21 2.84 1.13 Insurance 2.44 1.90 1.28 Real Estate 2.13 1.19 1.79 Services 30.46 28.18 1.08 Business services 8.26 5.79 1.43 Amusement and recreation 2.61 1.55 1.68 services/Motion pictures Engineering and management services 3.31 2.31 1.43 Source: U.S. Department of Labor, Bureau of Labor Statistics and California Employment Development Department. 21 Real Estate Trends Measured in terms of real estate activity rather than employment, Huntington Beach/West County are sending out mixed signals in regards to the market for both Manufacturing-Distribution and R&D space. The 1994 annual Grubb&Ellis Real Estate Forecast reported a combined inventory for the two uses of over 31 million square feet of leasable space. While the West County industrial/warehouse market was slow with the County's second highest vacancy rate at 15.7 percent, the growing R&D market boasted its lowest rate at 12.6 percent(Table 5). Other sources have presented generally lower vacancy figures, however, their data is not considered to be as reliable as that regularly published by Grubb&Ellis. These trends are indicative of the general shift away from basic or "heavy" manufacturing industry in the Greater Los Angeles Area toward more high technology, information-based businesses. The presence of McDonnell Douglas Aerospace West Corporation, one of the largest high tech employers in Orange County, provides a ready catalyst for spin-off development opportunities to a vast network of small to mid-sized subcontractors and suppliers. Huntington Beach should be wary, however, of becoming overly reliant upon a single, large corporation, particularly in view of recent cuts in defense- related contracts. Industrial space needs in Orange County are greatest for Class A buildings exceeding 75,000 square feet in total area, but heavy demand also exists for small users in 5,000 sf- 10,000 sf size range. 22 Table 5 MANUFACTURING-DISTRIBUTION SPACE INVENTORY VACANCY&ABSORPTION 1994 Rentable Vacant %Vacant Net Avg. Square Square Ft. Direct Absorption Asking Feet Direct 1994 Rent Area OI001s) 0100's) 000's s.f./mo Airport 32,862 5,800 17.6% 2,400 $0.32 South 8,010 900 11.2% 870 0.53 Central 23,265 2,470 10.6% 2,100 0.36 North 39,761 4,620 11.6% 2,500 0.34 West 24,853 3,904 15.7% 1,800 0.35 Manufacturing-Distribution'Total 128,751 17,694 13.7% 9,670 0.40 RESEARCH&DEVELOPMENT SPACE INVENTORY VACANCY&ABSORPTION 1994 Rentable Vacant %Vacant Square Square Ft. Direct Net Asking Feet Direct Absorption Rents Area 0{ 00's) (000,S) (000,S) s.f./mo Airport 32,828 4,419 19.4% 1,615 $0.55 South 10,702 1,762 16.5% 1,230 0.62 Central 4,915 800 16.3% 320 0.47 North 9,923 1,500 15.1% 385 0.42 West 6,662 840 12.6% 410 0.56 R&D'Total 55,030 9,321 16.9% 3,960 0.52 Source:Grubb&Ellis Real Estate The Huntington Beach/West County office inventory is relatively small comprising just under five million square feet of leasable space. The City, however, contains several large office complexes including Guardian Center, One Pacific Tower, and Seacliff which are in the 150,000 to 200,000 square foot size range. Vacancy rates are slightly below the County average at 14.5 percent(Table 6). 23 Table 6 OFFICE SPACE INVENTORY VACANCY& ABSORPTION 1994 Rentable Vacant %Vacant Net Net Square Square Ft. Direct Absorption Asking Feet Direct 1994 Rent Area 0� 00's) 000's 000's ST/mo Airport 26,903 3,880 14.4% 553 $1.45 South 5,519 658 11.9% 175 1.41 Central 13,593 2,592 19.1% 222 1.33 North 3,688 458 12.4% 114 1.34 West 4,875 705 14.5% 208 1.36 ®range County Total 54,578 8,293 15.2% 1,273 1.38 Source: Grubb&Ellis Real Estate A key resource for Huntington Beach's growing tourism and visitor industry are the City's 1,000-plus hotel rooms. The largest of these, at over 200 rooms each, are the Waterfront Hilton and the Holiday Inn. The expansion of this important sector of the local economy is certain to require more hotel rooms and conference facilities. Huntington Beach and vicinity show some definite signs of movement in the important retail trade sector. The City demonstrated measurable competitive progress in at least two key indicators during 1994. According to the Grubb&Ellis report, the West County area, of which Huntington Beach is by far the largest City, absorbed more retail space than any other area of Orange County. As illustrated by Table 7,the area also contains the largest total inventory of space. These data are encouraging because of Huntington Beach's as yet not fully realized potential for generating increased retail sales activity. With a median family income level of$58,200, which exceeds the County average by over 10 percent, Huntington Beach represents fertile ground for expanded retail activity. 24 Table 7 RETAIL SPACE INVENTORY VACANCY& ABSORPTION 1994 Rentable Vacant %Vacant Net Net Square Square Ft. Direct Absorption Asking Feet Direct 1994 Rent Area 0001s 0( 00's) 000's s.f.Jmo Central Coast 8,063 195 2.4% 40 $ 1.93 West 13,923 703 5.0% 203 1.85 North 8,437 518 6.1% 81 1.55 Central 13,303 1,052 7.9% (68) 1.45 South 9,716 635 6.5% 185 1.80 ®range County Total 53,444 3,103 5.8% 441 1.75 Source:Grubb&Ellis Real Estate Reliance on Retail Trade Sector Since the passage of Proposition 13 in 1978, many communities in California have been actively engaged in an ongoing battle to lure additional tax generating business, particularly retail sales, to supplement dwindling General Fund revenue sources. In some ways, this competition for tax dollars has been a zero sum game since a finite amount of disposable income exists within a given market trade area. While this internal competition has been waged within California, a number of other states have successfully targeted local business and industry, especially manufacturing, for relocation outside this area. The net effect of this trend has been an erosion of the employment base in high skill, high wage occupations related to basic manufacturing activity, and their replacement with less desirable jobs tied to the retail trade sector of the economy. Coupled with the lingering impact of the regional economic recession and accompanying job losses,the total number of quality available jobs, and hence disposable personal income,has declined significantly over the past five years. 25 Numerous localities, both inside and beyond California's borders, are offering an array of financial subsidies in order to attract new business or retain existing firms within their jurisdictions. The reasons for doing so are fairly obvious. A single large retail establishment, for example, occupying 100,000 square feet of space could generate as much as $300,000 to $400,000 in annual sales tax revenue. Auto dealerships, a major subject of debate and intense competition throughout California, often bring in over $200,000 per year in sales tax. Auto sales tend to fluctuate more dramatically than the above mentioned general merchandise category of retail trade according to national economic trends, but the importance of retail sales activity to any city budget cannot be underestimated. In Huntington Beach, sales tax currently accounts for roughly 17 percent of total General Fund revenues and this figure.can run much higher on a relative basis in more heavily retail-oriented communities. An over-reliance on sales tax revenue can be problematic from a municipal budgeting perspective in that retail sales activity can vary considerably from year to year because of national and regional economic trends which are largely beyond the control of local government. Table S illustrates that, on a relative per capita basis, Huntington Beach retail activity lags behind that of many other major cities in Orange County. For example, while Huntington Beach has approximately twice the total retail sales volume of much smaller Brea, its per capita rate is less than one-half that of its north county neighbor. Moreover, only the county's two largest cities in terms of population, Santa Ana and Anaheim, have lower per capita spending rates,despite median family income levels well below that of Huntington Beach. 26 Table 8 RETAIL SALES ACTIVITY-MAJOR ORANGE COUNTY CITIES 1993 (000's) Taxable Retail Retail Population Sales Sales Per Capita Anaheim 290,712 $2,772,512 $1,441,500 $ 4,959 Brea 34,598 779,213 528,127 15,263 Buena Park 72,898 721,320 538,293 7,384 Costa Mesa 102,360 2,160,102 1,629,794 15,916 Fullerton 121,456 1,079,256 806,846 6,640 Huntington Beach 189,159 1,437,388 1,150,635 6,081 Irvine 121,173 2,151,115 1,027,664 8,479 Orange 117,956 1,587,490 1,064,126 9,018 Santa Ana 310,417 2,562,440 1,544,396 4,976 Tustin 59,751 918,110 714,857 _ 11,955 OC Total 2,596,511 $ 26,837,111 $ 16,812,710 $6,475 Source: California State Board of Equalization and California Department of Finance. According to the "leakage index" devised as an analytical tool in conjunction with the Economic Development Element, a score of 1.00 denotes a perfect balance of retail activity within a given community. Only the following three retail sales categories fell below the overall City score of 0.84: Apparel Stores 0.56 Eating and Drinking Establishments 0.74 o General Merchandise 0.77 The preceding indices demonstrate that Huntington Beach as a whole loses approximately 16 percent. of its potential retail sales to surrounding communities. The main beneficiaries of this lost revenue, especially in regard to Apparel and General Merchandise purchases, are Costa Mesa, Westminster, and 27 Fountain Valley. As depicted by the accompanying trade area map, both Westminster and Fountain Valley fall within the 5-mile ring radiating out from the intersection of Beach Boulevard and Edinger Avenue,the location of Huntington Beach's only super regional shopping center,the Huntington Beach Mall. Attachment 1 aptly illustrates the tremendous buying power contained within this affluent area. The estimated 1995 population exceeds 525,000 people who command median family incomes of nearly$61,000 per year. As indicated by Attachment 2,the only"problem" with the area, at least from Huntington Beach's point of view, is the intense competition for available retail dollars. With total Gross Leasable Area (GLA), in excess of 7 million square feet of retail space, the trade area houses 52 separate shopping centers including three regional and two super-regional malls. The latter category is dominated by the 191- store Westminster Mall located only 1.3 miles from the Huntington Beach Mall. The close proximity of this shopping center has been particularly damaging from a competitive standpoint since it has attracted major discount retailers in addition to mall tenants to the outer perimeter of Huntington Beach. The recent relocation of the J.C. Penneys Department Store from the Huntington Beach Mall is indicative of the competitive challenges at hand. If the immediate internal competition weren't enough, the mammoth South Coast Plaza Shopping Center lies just beyond the 5-mile ring in Costa Mesa and undoubtedly draws numerous Huntington Beach shoppers to its doors. The Economic Development Element estimated the 1990 level of retail sales "leakage" at approximately $250 million per year, based on total sales activity of$1.23 billion. Retail leakage can be defined as the dollar value of purchases by Huntington Beach residents occurring outside the City's 28 boundaries. Utilizing a similar methodology to that employed by the Element, 1993 retail leakage is estimated at around $80 million on $1.15 billion in annual sales. While on the surface the reduction in leakage represents good news, it may in large part be due to the steady decline in overall retail sales levels in all but two West County cities, as well as the entire County,since 1990 in particular(Table 9). TABLE 9 TAXABLE RETAIL SALES ORANGE COUNTY, WEST COUNTY CITIES Change 1985 1990 1993 1990-93 Costa Mesa $1,608,194 $1,722,577 $ 1,629,794 -5.4 Fountain Valley 314,661 494,649 515,975 4.3 Huntington Beach 1,426,392 1,225,477 1,150,635 -6.1 Santa Ana 1,672,252 1,606,956 1,544,396 -3.9 Seal Beach 96,887 96,497 98,565 2.2 Westminster 707,790 714,234 661,059 -7.4 West County 5,826,176 5,910,390 5,600,424 -5.2 ®range County $ 16,305,974 S 17,483,433 516,812,710 -3.8 Source: California State Board of Equalization 29 h1ARKETING PLAN FOR BUSINESS ATTRACTIONAND RETENTION City Council Policy Role The City Council Economic Development Committee (EDC) assumed the lead role in the policy- making process related to the Economic Development Strategy with assistance and advisement from the Economic Planning Committee (EPC). The former group is charged with primary policy-level responsibility for current, implementation-oriented economic development activities, while the latter operates on a long-term basis to identify opportunities and constraints related to public economic development initiatives. The EPC is currently in the process of forming a high-level "Red Team," comprised of top corporate executives who live and/or work in Huntington Beach, to assist with business attraction and retention efforts through "executive to executive" and other recruitment activities. City of Huntington Beach Economic Development Program Like most major cities competing for limited property and sales tax revenues within a large, urbanized metropolitan area, Huntington Beach possesses an active and sophisticated economic development program. Attachment 3 details the many and varied activities conducted by the City's Business Development Division for the purpose of retaining existing business and industry, as well as attracting new investment and jobs to the community. Organized under the City's Department of Economic Development,these range from advertising and promotional activities and permit processing assistance, to the highly successful Industrial Interview Program designed to retain job-generating manufacturing and distribution uses in the City. In addition, the very well received Mayor's Business Forums have 30 been held "in the field" outside of City Hall for the purpose of gauging business community opinion, and surfacing City government plans and policies in order to gain critically important public input to the process. The Business Development Program augments redevelopment and housing rehabilitation and development activities within the department to form the basis of a comprehensive overall economic development program for the City. As a point of reference, Attachment 4 compares city budget allocations for economic development/redevelopment services for several major programs in the Greater Los Angeles Area. The survey reports comparative numbers related to population, staffing, annual budget, and operating costs for the cities of Huntington Beach, Long Beach, Anaheim, Santa Ana, and Whittier. Each city's total economic development/redevelopment budget is presented on a per capita basis while the subcategory of"Operating Costs," is expressed both in dollars and as a percentage of total budget. The latter term is defined as salary and benefits, debt service, rent, maintenance, equipment, and interdepartmental transfers. This chart illustrates that Huntington Beach devotes significantly less in staff and financial resources to economic development/redevelopment than other large Southern California municipalities. The Whittier example is included to show that the expenditure levels are more in line with those of older, medium-sized cities. 31 Focus Group Discussions Recognizing the importance of a viable partnership between the public and private sectors of the local economy,the Economic Development Department, in consultation with the City Administrator's office, determined early on that a series of"focus group" discussions with various sectors of the business community should be an integral part of the strategic planning process. The Business Focus Groups, which met over an eight week period were divided into the following topical areas and/or sectors of the local business community: • Huntington Beach Chamber of Commerce(general)-3 meetings; • Development- 1 meeting; • Finance- 1 meeting; • Tourism- 1 meeting; • Retail/Service/Professional- 1 meeting; • Economic Development Professionals (California Association for Local Economic Development)- 1 meeting. Attachment 5 identifies a "Schedule of Public Discussion/Input to the Planning Process" for the Strategy. The schedule reflects the extensive level of City Council and staff, private business community, and outside economic development professional input which was contributed to the strategy process. 32 In order to establish the fundamental parameters or "ground rules" for the focus groups, the attached "Questions and Answers" document was circulated to all participants at the onset of each meeting (Attachment 6). This document served to frame the ensuing discussions,thus avoiding the undesirable potential for completely unstructured dialogues which often tend to dwell on negative and/or highly personalized experiences. First, and very importantly, the Question and Answer sheet defined the sometimes vague and/or ambiguous terms of "economic development strategic planning" and "community economic development potential". This established a uniform perception and understanding as to what the plan entailed, why it was being done, and what were its expected outcomes. Absent this structure, the comments generated with the focus groups might very well have been too general to be of any real analytical value. In addition, participants were provided with copies of"Tools/Incentives" questionnaire(Attachment 7)to solicit their thoughts and ideas in written form. The Business Focus Group discussions effectively laid the philosophical foundation for the Economic Development Strategy by thoroughly detailing and recording the critically important views of the private business sector. The Chamber of Commerce discussions which spanned a total of over five hours elicited a wealth of information which was categorized into three areas of response and/or need which are reported in summary as Attachment 8: 3 Attitude c Incentives ® Marketing 33 One of the Chamber group's first formal actions pertaining to the strategy was to adopt the following "Recommended Mission Statement/Purpose-Economic Development Strategy:" "To assist in the development and implementation of an Economic Development Strategy designed for the attraction, expansion,and retention of business in Huntington Beach. Included in the Strategy will be the evaluation of economic incentives and the reduction of regulatory barriers." The language contained in the preceding statement serves to emphasize the Chamber's priorities in terms of both the Strategy and the City's economic development program. The group wishes to see a program which combines various incentives with an accompanying decrease in government "red tape" which acts as an impediment to profitable private business enterprise. Clearly, the business community appropriately envisions itself to be at the forefront of local economic development policy-making since the majority of jobs and virtually all tax revenues are generated within the private sector of the economy. "Attitude" -oriented comments highlighted in the summary stress the need for a"pro-business"/"business friendly" attitude in City Hall where businesses, especially those going through the development review process, are to be treated like clients or customers. Similarly, "Incentives", in the opinion of the Chamber group, need to be of tangible financial benefit in order to be of real value to business. "Marketing" needs to be highly targeted and directed towards compatible "clusters" of business and industry which blend well with existing firms, and.have a high growth potential. The City must also creatively "sell" its abundant attributes in terms of environment, quality of life, and business prosperity. Testimonials from existing business success stories, and 34 business retention in general, were seen to be the best possible form of advertising and promotion for those firms considering a Huntington Beach location. The commentary from the Chamber of Commerce Focus Group, because it represented such a broad cross-section of the local business community, tended to be reflected in the views of the other assembled business groups. Among the additional insights which emerged from the other discussions were the idea that perhaps the downtown area had been historically over-emphasized by "City Hall" at the expense of other, more economically productive business centers, namely the North Huntington Beach area nearer to the San Diego (I-405) Freeway and the Beach Boulevard commercial corridor. The importance of the Beach Boulevard/405 Freeway "entrance" to the City was also stressed repeatedly in several of the sessions(RetaiVService/Professional). The need for more business friendly development processing was emphasized by the frequency with which the following terms were mentioned in regard to development review: "consistency", "coordination", and "flexibility" (Development). Financial incentives were recognized to be a necessary component of a comprehensive economic development package, but as has been documented frequently in various business and professional journals,they are not among the main reasons cited for the choice of one particular business locale over another(Finance). Much of the fairly technical discussion which took place in this session dealt with the need for particular types of financing such as working capital and "start-up" business loans. U.S. Small Business Administration(SBA) programs were considered to be a particularly good resource in the latter regard. Finally, the concept of`eco-tourism", which involves capitalizing on Huntington 35 Beach's natural shoreline attributes, was viewed to be an ideal marketing tool for attracting additional tourism and visitor dollars (Tourism). The idea of evolving beyond the "Surf City" image, without threatening this aspect of the community's traditional identity,was frequently mentioned. This meeting, which was well-attended by members of the Conference and Visitor's Bureau (CVB) also produced recommendations for the establishment of a major conference center and additional hotel rooms to generate more overnight visitors. The Economic Development Professional (CALED) Focus Group served as sounding board for the many ideas expressed by the locally-based business people, as well as an opportunity to tap their considerable professional expertise regarding new concepts and tools for attracting and retaining business and industry. With representatives from the Cities of Anaheim, Santa Ana, and Brea, as well as Southern California Edison and specialized redevelopment and marketing consultants in attendance, this discussion served to illuminate and bring perspective to many of the earlier comments and ideas expressed by the "in-town" groups. While acknowledging the inevitability of some competition between cities for desirable tax and job-generating business, the group also recognized the importance of a regional approach to economic development strategic planning. The need for Huntington Beach to triumph over its somewhat negative image in the development community, related mainly to the highly publicized Bolsa Chica development controversy, by redefining the City as "user friendly" to business was discussed at some length. The economic development professionals felt strongly that the City should specifically target corporations with chief executives residing in or near Huntington Beach, as well as focusing on specialized businesses such as environmental products and services companies, classic car sales and service, and the music and entertainment industry where location is not An 36 overriding site selection criterion. The general consensus of opinion is related to the fact that Huntington Beach represents a regional amenity and attraction which benefits all of Orange County. Therefore, the City must emphasize its upscale, beach-oriented lifestyle, rather than attempt to compete "dollar for dollar" for industrial uses with less expensive land areas such as the Riverside/San Bernardino "Inland Empire." In the area of incentives, it was recommended that Huntington Beach assist applicants/prospects with development fee reductions and/or processing assistance, rather than providing direct cash subsidies. The importance of establishing an effective and far-reaching commercial/industrial real estate broker relations programs was stressed, along with utilizing testimonials from existing business"success stories"who had chosen a Huntington Beach location over the available alternatives. Cluster Driven Business Attraction and Retention The development of a marketing program which builds upon areas of strength within the community economic base is certain to meet with greater success than a scattered, less targeted approach. Borrowing a term from the field of consumer product marketing, it may be useful to think of cluster- driven business attraction and retention as the "market segmentation" method. That is, a highly focused campaign which strives to reduce the target of the community's marketing program to its related and most compatible components, thereby achieving the maximum level of efficiency with limited public resources. Much of the research typically involved with the market analysis phase of an economic development marketing plan has been completed by way of the preceding community economic base analysis. The market segmentation approach to business attraction and retention 37 enables a community, to target its efforts. By doing so, the locality has a much better chance of achieving measurable success at an affordable cost. Huntington Beach's economic development mission may be defined as it was earlier in this report in terms of the city's ability to realize its potential to create quality, high-wage jobs and expand the local tax base to the fullest extent. With employment generation as one important criterion of success, Huntington Beach would derive optimum benefit from its marketing program expenditures by concentrating on the High Tech and Tourism Clusters. Generally speaking, the High Tech Cluster encompasses research and development, manufacture, and marketing/sales of products and services related to computers, electronics, measuring instruments and devices, and medical equipment/bio- technology. The Tourism Cluster includes recreation, lodging, retail sales, and scientific research and education related to the City's natural shoreline environment. The most effective marketing campaign must be targeted toward the most highly coveted end users, namely those which meet the citys adopted economic development policy goals in terms of business attraction and retention,job creation, tax base enhancement and diversification, commercial mdustrial revitalization, and improved business efficiency and competitiveness leading to a stronger economic climate. It is, therefore, essential that the identified clusters be operationally defined by SIC code. In this way, business attraction and retention incentives and costly marketing program implementation tools can be narrowly focused on the desired target audience, or market segment. In Huntington Beach's case, the High Tech Cluster, including Orange County's well-represented medical/bio-tech 38 field, and Tourism Cluster may be very specifically identified by the 4-digit SIC codes delineated in Attachment 9. Once the appropriate target clusters have been identified, new business attraction prospects should be contacted in the following manner: (1) Mail promotional materials; (2) telephone follow-up; and (3) tours/site visits. Typically, a business prospect list would be generated according to the selected SIC classifications through the services of computerized information services such as Dun & Bradstreet, Inside Prospects of California, and Retail Lease Trac. Firms of this type are able to provide pressure sensitive mailing labels tailored to the needs of the client. For example, the service could generate a geo-based list of major.restaurants operating in the Southern California region. Or, it could create a list of consumer electronics manufacturers, distributors, and/or retailers. Targeted mailings of city promotional materials, including available economic development incentives and potential site locations, could be directed toward business prospects on a periodic basis. The mailings would generate certain desired contacts which could be followed-up by telephone. The most highly sought after prospects could be taken one step further through invitations to participate in guided city tours and site visits. It is important to note that some discretion should be exercised in regard to business solicitation within a local trade area such as Orange County. Internal local competition could undermine cooperative regional business attraction efforts such as those of the Orange County Economic Development Consortium. 39 In the same regard, information services of this kind can be used to coordinate business retention activities. The data which they produce provides a ready reference guide for City policy makers and economic development officials to keep in touch with and gauge the needs of existing local businesses. Business satisfaction surveys conducted by mail, as well as telephone and/or in person retention interviews, are a natural component of a systematic retention program. Economic Development Incentives As mentioned previously, Greater Los Angeles Area business and industry has been the primary target of many out-of-state and out-of-area recruiters whose aim is to attract jobs and tax base to their areas. Typically, these recruitment activities have involved offers of significant financial incentives including property tax abatement,customized job training, and cheap or free land for development. During the past five years in particular, California State and local government, in partnership with the private business community, has begun to successfully counter these raids by creating various incentive programs designed to retain existing business and industry in the State. All economic development incentives share the following purposes in common: • Reduce or eliminate physical and/or economic blight. • Create and/or retain jobs. • Enhance the tax base of local government. • Encourage business investment and help increase profitability. 40 The following represents a detailed listing or "menu" of economic development incentives which a municipality may consider utilizing in order to attract and retain desirable business and industry in the local community. The fist is not all inclusive, nor are the incentives described "right" for every community. The particular area in question needs to first evaluate its range of potential options and decide which of these alternatives best fit the situation at hand. The recommendations section of the Strategy will identify those incentives which seem most appropriate and feasible for Huntington Beach. In addition, Attachment 10 summarizes some of the most commonly used debt instruments which are available to augment local economic development efforts. 1) Loans/Rebates • Small Business Administration Loans and Loan Guarantees - SBA sponsored Certified Development Corporation may issue low-interest rate debentures for up to $500,000, or 40% of total project cost, for acquisition and/or construction. - SBA may directly provide loan guarantees of up to$500,000 for most business-related costs, including inventory and/or working capital. • Sales Tax Equivalency Loans As specifically allowed by its Charter authority, a city or Redevelopment Agency may offer loans or pledge a portion of new taxes generated by desirable development projects. 41 • On a limited basis, the state of California may provide loan guarantees for specific types of land uses. • A City or Redevelopment Agency may allocate funds for commercial rehabilitation loans, grants, and/or rebates. 2) Bonds • Subject to federal and state governmental limitations, a city may issue tax-exempt Industrial Development Bonds for plant expansions (Note: IDB's are "conduit" financing which do not involve any pledge of future tax revenues). • As specifically allowed by its Charter authority, a city may issue taxable municipal bonds in support of desirable development projects. . • As specifically allowed by its Charter authority, a city may issue Communities Facilities District Bonds (AKA "Mello Roos" bonds) to finance needed public infrastructure improvements. • A Redevelopment Agency may issue Tax Allocation Bonds which pledge future property tax increment revenues to repay debt, the proceeds of which can be used to achieve legitimate redevelopment purposes under state law. 42 3) Assessment Districts • A city may form a wide-variety of special purpose assessment districts to help offset the costs of needed public infrastructure improvements: Business Improvement Districts generally utilize a portion of Business License fees to fund promotional activities, particularly in business centers such as downtowns. Parking Districts, Street Maintenance Districts, Landscape Districts, and Street Lighting Districts generally utilize a portion of property tax revenues, calculated on an ad valorem, linear foot, power usage or other reasonable basis, to pay for desired maintenance, land acquisition, and/or physical improvements. • Hotenourism Districts can be formed which apply a portion of the Transient Occupancy Tax to fund desired promotional activities and/or physical improvements. 4) Direct Public Financial Contributions • Public infrastructure improvements which are of general benefit to an area, rather than site specific, can be contributed by a city or redevelopment agency as an incentive to desirable private development and/or investment. 43 • Land assembly utilizing a city's and/or redevelopment agency's power or eminent domain (condemnation) may be applied to assist in the provision of required public improvements, or to complete site assembly on a given development project. • Public facilities improvements, such as police or fire stations, libraries, or parks, may be contributed by the public sector as an enhancement for a particular development project. • Public land leases may be incorporated as a means of project financial subsidy by having the city or redevelopment agency act as the lessee of privately owned property, making lease payments equivalent to a particular index, such as sales tax generation (Note: The "public purpose" of such arrangements, in a legal sense, is unclear thus incurring unknown financial risk for private developers and/or users). • Fee waivers/reductions for targeted users.may be offered as incentives, but can complicate budget revenue projections, as well as raising questions of equitability and fairness to existing businesses. • Land cost write-downs for targeted uses can be applied within the limitations posed by state law. ® Contracts for services with business organizations can be offered to pay for needed municipal activities such as image enhancement through promotion and/or advertising. 44 • Business "incubator" facilities may be established to assist newer firms, particularly those in areas of emerging technologies,to survive the critical initial three years of operation. 5) Special Purpose Zones/Districts • Various federal and state chartered zones and/or districts exist which can provide tax credits and other financial incentives to encourage economic development (Note: A shortcoming is that the number of zones are legislatively limited, and awarded somewhat sporadically to "blighted,"usually highly urbanized areas). 6) Technical Assistance • Many types of in-kind technical assistance, including. site selection assistance, "ombudsman" services, development processing/permit expediting, and business attraction/retention marketing, can be provided by local government at relatively little cost, with tremendous potential gain in terms of achieving community economic development goals. One form of incentive package which has gained popularity as well as publicity in recent years are Enterprise Zones and Empowerment Zones sponsored by State and Federal governments to achieve economic development purposes,especially in blighted and/or low-income areas. Businesses operating within the boundaries of such zones are offered a variety of financial benefits ostensibly making it more 45 economically viable to locate in marginal or high crime areas. Attachment 11 summarizes the tax credits, low-interest loans, plan/permit expediting, fee waivers, and other assistance made available to zone participants. In California, 36 Enterprise Zones and 40 Recycling Market Development Zones, which encourage the use of recycled materials in the manufacturing process, have been established throughout the State. The federal government, in kind, has created 6 Empowerment Zones and 65 Enterprise Communities in various urban areas of the country. While it is too early to thoroughly measure the effectiveness of these zones, they certainly represent a worthwhile attempt to improve business and economic conditions in depressed areas. Another popular incentive is the so-called business 'incubator". Generally, these are publicly owned and operated facilities offering a variety of services to tenants including common clerical/reception, duplicating, FAX, conference rooms, computer, job training and business counseling services at drastically reduced rental rates. These resources are usually provided under one roof to assist newer, small businesses during their initial "start-up" phase when the potential for failure is greatest. Most incubators have a set "graduation" period not exceeding three years after which the firm should be able to compete on their own in the open marketplace. Incubators often involve substantial upfront capital costs in land and buildings, so it is advisable to attempt to adapt existing vacant or underutilized facilities to this use. Huntington Beach already offers a number of the previously described economic development incentives. In combination with the City's quality living environment and strategic location, the application of certain incentives toward the attraction or retention of highly desirable business and 46 industry will undoubtedly meet with a high level of success. Huntington Beach will not, however, be able to duplicate the federal and State tax breaks offered in the specialized zones of which the only Orange County locations are in Santa Ana and Anaheim. Nor can Huntington Beach easily compete with large privately owned high tech business parks such as the Irvine Spectrum. Property owner- driven deals have a major advantage in terms of land price and infrastructure, both which have been covered in advance of any project-specific economic development initiatives. One of the most important enticements which a municipality can offer to targeted business and industrial prospects is a "fast and fair" system of development processing, along with an equitable development fee schedule. The old business adage that"time is money" could not be more true than as it applies to development. The community which can assure that development applications will be processed within a reasonable, designated timeframe and at an affordable cost to the developer, will already have a distinct advantage over their competition. Attachment 12 compares Huntington Beach to three other large Southern California cities, Anaheim, Los Angeles, and Long Beach, in regard to both anticipated development fees as well as ongoing tenant costs. The above referenced examples are taken from the 1995 annual Kosmont Survey of Municipal Fees, Taxes, and Economic Incentives. As can be seen from the chart, a firm could expect to pay significantly less in Huntington Beach for a business license than in any of the cities_surveyed. Other than Anaheim, which has no Utility User Tax, Huntington Beach emerged lower than the alternatives in nearly every category. This is particularly true when compared to Los Angeles, which levies taxes on payroll, commercial property rental, and parking occupancy, which none of the others 47 impose at all on their resident businesses. In this regard, Los Angeles presents a very appropriate target for Huntington Beach's business attraction efforts. Whichever economic development incentives a city utilizes for the purpose of attracting and retaining targeted business and industry must be applied on a uniform, equitable basis. Otherwise, existing business which provides the employment and tax base foundation for any community, will rightfully feel neglected by the government which they support. Attachment 13 offers a systematic means by which to evaluate the relative cost/benefit of an individual business to the community in terms of the Mowing rating criteria. 1) Economic Benefit 2) Tax Base Enhancement 3) Public Financial Investment 4) Targeted"Cluster" Catalyst This evaluation relates directly to the Economic Development Element policy recommendations identifying the need for thorough"fiscal impact analysis" pertaining to major policy decisions. 48 Recommendations The following list of recommendations is divided into one of two categories according to their relative cost/benefit in terms of implementation. •Higher Priority •Lower Priority It should be noted that each of the referenced items are very important, and take precedence over the many potential activities and projects which are not mentioned. Moreover, items which may be of high potential benefit, but also bear high costs, are generally-ranked lower than those of high benefit/low cost. Higher Priority 1) Adopt an objective economic development rating criteria for evaluating the potential benefits of particular private business concerns to Huntington Beach in terms of jobs, tax base, image enhancement, and other factors in order to gauge the fiscal impact of proposed project. 2) The following financial incentives which are either not being utilized or could be applied more extensively, are recommended for consideration according to availability of sufficient staff and funds. • US Small Business Administration Loans and Loan Guarantees • Sales Tax Generation Equivalency Loans • Value Added Tax Equivalency Loans 49 • Micro Loans for Machinery and Equipment • Use-Specific State Loan Guarantees • Commercial Rehabilitation Loans • Commercial Facade Rebates/Grants • Commercial Tenant Improvement Loans • Tax Exempt Industrial Development Bonds • Community Facilities District Bonds • Fee Waiver/Reductions • Tax Allocation Bonds • Business Improvement Districts • Hotel Districts 3) Develop a site-specific marketing program, utilizing all available economic development tools including the"Red Team" recruitment approach, to attract business, especially targeted firms in the identified High Tech and Tourism Clusters to available properties. 4) Establish a Real Estate Broker Network to apprise local commercial/industrial brokers of current City plans and policies, while taking advantage of their expertise and business contacts to attract . and retain business in the community. 50 5) Implement specific action items including: ® Target business attraction efforts toward firms operating within the incorporated boundaries of the City of Los Angeles due to their inordinately high tax burdens. ® Undertake a Restaurant Attraction Program to bring more fine dining establishments to Huntington Beach, especially in the downtown area. ® Actively seek to attract major retail tenants, including movie theaters, to the Edinger Corridor area and Huntington Beach Mall. • Complete redevelopment of the Downtown Business District in order to convey a "ready for business" look and feel. • Strive to attract the highest sales tax-generating uses to available vacant or under-utilized sites located in Commercial zones. ® Strongly consider adaptation of formerly institutional sites, such as schools, to large discount retail uses. ® Increase Economic Development Funding. 51 6) Concentrate on attracting and retaining job and tax generating tenants in the High Tech Cluster, particularly related to subcontractors and suppliers to the McDonnell Douglas Corporation facility. 7) Continue to expand cooperative ventures and relationship with Huntington Beach Chamber of Commerce aimed at both retention of existing business and attraction of new business. 8) Continue to work with the Conference and Visitor's Bureau to attract more tourists and visitors to Huntington Beach in keeping with the Tourism Cluster theme, and constrict more hotels so the tourists can stay in Huntington Beach. 9) Continue to expand the successful Mayor's Business Forums and Industrial Interview Program as a means of promoting business retention by addressing business needs prior to any relocation decisions being made. 10) Prepare individual economic development action plans related to Industrial Areas, Commercial Areas, and Conference and Visitor Activities with a view toward the City's long-range future in terms of "Opportunities and Constraints," particularly as related to international trade and commerce. 11) Evaluate the financial feasibility of development of a Conference Center facility to attract more luxury hotel growth and business visitors. 52 Lower Priority 12) Adopt formal policies and procedures for the City's Development Assistance Committee in order to help expedite the plan/permit review process and centralize decision-making. 13) Create a methodology for a simplified consolidated fee schedule so that a developer/user can readily pre-determine direct costs related to a particular project. 14) Strive to attain a Jobs/Housing Balance of 1.00 by creating at least one new employment opportunity for every new housing unit approved for construction. 15) Work with the Chamber of Commerce to expand services and staff support to the Small Business Assistance Center in order to serve the requirements of Huntington Beach's many small business establishments. 15) Work closely with Golden West College and the Orange County Private Industry Council(PIC)to create industry-specific job training programs and resources to augment the City's Economic Development Program initiatives. 17) Work in partnership with the private business community on a regional basis, through the Orange County Business Council/Economic Development Consortium,to attract targeted new business. 53 18) Working with local businesses and property owners, consider creating other Business Improvement Districts, such as the successful collaborative effort by the Huntington Beach Auto Dealers Association,which funds the maintenance and operation of the I405 readerboard sign. 19) Create a comprehensive and regularly updated CommerciaUIndustrial Space Inventory utilizing data provided by real estate firms covering the Huntington Beach area. 20) Focus High Tech attraction incentives on Manufacturing-Distribution, and Research and Development firms in the 50,000- 150,000 square foot size range. 21) Institute a "Key Tenant Loan Program" for the Downtown and North Huntington Beach Areas in order to attract targeted retailers to these key business districts. 22) Develop a High Tech Business Incubator Facility for the purpose of"growing" targeted business enterprises of particular benefit to the local economy. 23) In keeping with the policy directives of the City General Plan, encourage the development of concentrated "commercial nodes" along Beach Boulevard through special economic development incentives made available to businesses located along this key corridor. 54 55 � ittachment� � w SHOPPING CENTER MARKET ANALYSIS Urban Decision Systems, Inc. Huntington Beach, CA 04/13/95 5 Mile Ring POPULATION HOUSEHOLDS INCOME 2000 Projection 552,051 Number(1995) 175,095 Per Capita $20,899 1995 Estimate 526,410 Average Size 2.98 Agg Income($Mill) 11,001.5 1990 Census 499,615 $0-$14,999 18,831 FAMILIES $15,000-$24,999 15,044 %90-95 Change 5.4% Number(1995) 125,573 $25,000-$34,999 18,371 Average Size 3.39 $35,000-$49,999 28,935 RACE $50,000-$74,999 41,425 White 366,842 AGE $75,000-$99,999 23,862 Black 7,500 0-13 100,303 $100,000-$149,999 20,629 American Indian 2,656 14-20 50,510 $150,000+ 7,996 Asian 109,779 21-34 140,526 Median Household $53,460 Other 39,632 35-54 147,097 Average Household $62,719 Hispanic 124,337 55-64 41,811 Median Family $60,849 65+ 46,163 Average Family $70,013 SHOPPING CENTERS 61 TOTAL GROSS LEASABLE AREA(GLA) 7,287 Neighborhood 30 Centers Reporting 52 Community 19 Centers Reporting Anchor GLA 10 Regional 3 Total Anchors GLA 1,269 Super Regional 2 Total GLA Excluding Anchors 6,019 GLA/Pop Ratio 13.8 Enclosed Centers 2 GLA 2,029 GLA/HH Ratio 41.6 Strip Centers 21 GLA 2,353 SIZE OF CENTER Neighborhood Community . Regional Super- Regional Number Reporting GLA 29 18 3 2 Total GLA 1,449 2,538 1,271 Z029 GLA Excluding Anchors 1,364 2,163 1,087 1,404 Average Total GLA 50 141 424 1,015 Number of Stores 304 283 316 297 AGE AND STATUS Number GLA Under 5 Years Old 3 825 5-10 Years Old 18 1,622 11-15 Years Old 2 218 15-20 Years Old 10 515 Over 20 Years Old 17 3,808 Planned Centers 1 0 Under Construction 0 0 Note: All GLA statistics are in 000's of square feet. Source:1980,1990 Census,March 15,1995 UDS Estimates (SCMA), Urban Decision Systems Inc.13976 Fair Ridge Drive,Suite 20ON!Fairfax,VA 22033/(800)3644837 154983 57 mAtta.. chment 2 OPPING CENTER LOCATIONS Urban Decision Systems, Inc. ntington Beach, CA 13-Apr-95 file Ring 154983 ID Name GLA Distance Direction Address To Site )65204 NEWLAND CENTER Total 170 3.98 179(S) 19640-19950 Beach Blvd. Anchors Huntington Bch,CA 92647 Community Opened 1983 Anchor Names Lucky Discount Supermarket )63170 PLAZA DE LA PLAYA Total 39 2.96 178(S) Beach Blvd. &Garfield Anchors Huntington Bch ,CA 92648 Neighborhood,20 stores Opened 1986 )41689 TOWN&COUNTRY SHOPPING CENTER Total 0 2.96 178(S) Beach Blvd., Btwn. Garfield&Ellis Anchors Huntington Bch,CA 92648 Unclassified 057075 CLOTHESTIME FIVE POINTS PLAZA Total 46 2.47 178(S) SWC Beach Blvd. &Main St. Anchors Huntington Bch,CA 92648 Neighborhood,21 stores Opened 1985 Anchor Names Clothestime Eye Care U.S.A. 052259 LOEHMANN'S 5 POINTS PLAZA Total 155 2.47 178(S) Beach&Main 18593 Main St Anchors Huntington Bch,CA 92648 Community, 37 stores Opened 1964 Anchor Names Huntington Cinema Loehmann's Pier 1 Imports Trader Joe's 057602 GARFIELD PLAZA Total 56 3.18 156(SE) SEC Garfield Ave. &Magnolia St Anchors 31 Huntington Bch,CA 92646 Neighborhood, 12 stores Opened 1979 Anchor Names FHP Medical Suites 074039 MARIPOSA PLAZA Total 40 2.93 133(SE) NWC Brookhurst St &Phillips Ave. Anchors Fountain Valley,CA 92708 Neighborhood,23 stores Opened 1989 Anchor Names Petco 041679 ALBERTSON'S CENTER Total 138 4.48 148(SE) SEC Brookhurst&Adams Anchors Source.National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 624/Marina Del Rey,CA 902921(800)Sn-9668 Pagel 59 IOPPING CENTER LOCATIONS Urban Decision Systems, Inc. ntington Beach, CA 13-Apr-95 Mile Ring 159a3 ID Name GLA Distance Direction Address To Site Huntington Bch,CA 92646 Community, 40 stores Opened 1977 Anchor Names Albertson's Oshman's Sporting Goods 053300 YORKTOWN PLAZA Total 20 4.04 144(SE) Yorktown&Brookhurst Anchors Huntington Bch,CA 92646 Neighborhood Opened 1969 Anchor Names 7-Eleven 041690 BROOKFIELD PROMENADE Total 108 3.60 140(SE) Garfield&Brookhurst Anchors 62 Huntington Bch,CA 92646 Community,23 stores Opened 1967 Anchor Names _ Pets Choice Pep Boys Tokai Bank of Calif. 067406 FOUNTAIN VALLEY PROMENADE Total 188 3.21 135(SE) NWC Brookhurst&Ellis 18315 Brookhurst Anchors Fountain Valley,CA 92708 Community Opened 1989 Anchor Names Payless Drugs Ralph's Supermarket T.J.Maxx 056908 CALLENS CORNER Total 103 3.21 135(SE) Brookhurst&Ellis St Anchors - Fountain Valley,CA 92708 Community Opened 1986 Anchor Names Lucky Discount Supermarket 041688 SEACLIFF VILLAGE Total 125 3.62 343(N) Golden West St&Yorktown Ave.&Main St Anchors 66 Huntington Bch,CA 92648 Community, 35 stores Opened 1976 Anchor Names Lucky Discount Supermarket 041686 OLD WORLD VILLAGE Total 0 0.51 295(NW) 7561 Center Ave. Anchors Huntington Bch ,CA 92647 Unclassified,60 stores Opened 1977 058180 PLAZA ON THE BOULEVARD Total 98 3.01 356(N) Beach&Garden Grove BNds. Anchors Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-8568 Page 2 60 ;HOPPING CENTER LOCATIONS Urban Decision Systems, Inc. iuntington Beach, CA 13-Apr-95 Mile Ring 154983 ID Name GLA Distance Direction Address To Site Stouton,CA 90680 Neighborhood, 13 stores Opened 1989 Anchor Names Alpha Beta Blockbuster Video 062880 BEACH&LAMPSON SQUARE Total 165 3.61 357(N) Beach Blvd. &Lampson Ave. Anchors Stouton,CA 90680 Community Opened 1987 Anchor Names Price Savers 067362 HARBOR PACIFIC PLAZA Total 16 3.52 357(N) Beach&Lampson Anchors Stouton,CA 90680 Neighborhood Opened 1989 067197 PLAYA GALLERIA Total 0 4.04 357(N) SWC Beach&Chapman Anchors Stouton,CA 90680 Neighborhood Opened 1988 041783 STANTON PLAZA Total 0 4.52 358(N) 11360 Beach Blvd. Anchors Stouton,CA 90680 Unclassfied 074774 7-11 SHOPPING CENTER Total 14 2.69 357(N) 13351 Beach Blvd. Anchors Westminster,CA 92683 Neighborhood Anchor Names 7-Eleven 054589 THE PAVILION Total 306 0.50 178(S) Beach Blvd.@ Heil Ave. Anchors Westminster,CA 92683 Regional Opened 1985 Anchor Names Target Von's Pavillion Supermarket 041794 UNNAMED SHOPPING CENTER Total 0 1.65 (N) Hwy. 39-from 11th to 12th Sts. Anchors Westminster,CA 92683 Unclassified, 16 stores 041683 HUNTINGTON BEACH MALL Total 934 0.08 63(NE) Edinger Ave.@ Beach Blvd. &San Diego 7777 Edinge Anchors 170 Huntington Bch,CA 92647 Super-Regional, 106 stores Opened 1967 Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Der Rey,CA 902921(900)633-9568 Page 3 61 JPPING CENTER LOCATIONS Urban Decision Systems, Inc. itington Beach, CA 13-Apr-95 ile Ring 154983 ID Name GLA Distance Direction Address To Site Anchor Names Broadway Department Store Circuit City Mervyn's Department Store' Montgomery Ward 53301 WARNER PLAZA Total 24 1.24 137(SE) 8780 Wamer Ave. Anchors Fountain Valley,CA 92708 Neighborhood, 16 stores Opened 1918 Anchor Names China Pearl Restaurant Nautilus Newport 41672 GARDEN PLAZA Total 65 3.14 19(N) Magnolia Ave. &Garden Grove Blvd. Anchors Garden Grove,CA 92645 Neighborhood, 17 stores Opened 1974 Anchor Names Alpha Beta 41656 FOUNTAIN SHOPPING CENTER Total 73 1.43 128(SE) Warner Ave. &Magnolia St Anchors Fountain Valley,CA 92708 Neighborhood,25 stores Opened 1964 Anchor Names Alpha Beta Acme Mkt Emergi.Center 41799 WESTMINSTER SHOPPING CENTER Total 12 1.15 111 (E) Magnola&Heil Anchors Westminster,CA 92683 Neighborhood, 8 stores Opened 1978 - i63623 ASIAN GARDEN Total - 100 1.47 50(NE) Boisa Ave. &Magnolia Anchors Westminster,CA 92683 Community Opened 1987 )63659 BOLSA PLAZA Total 0 1.47 50(NE) 9081-9113 Bolsa Ave. Anchors Westminster,CA 92683 Unclassified )60083 UNNAMED SHOPPING CENTER Total 12 3.36 30(NE) 9618 Garden Grove Blvd. Anchors Garden Grove,CA 92644 Neighborhood 153302 PLAVAN PLAZA Total 48 1.79 118(SE) SWC Warner&Bushard Anchors 23 Fountain Vafley.CA 92708 Neighborhood, 16 stores Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admirafty Way Ste 6241 Marina Del Rey,CA 902921(800)633-9568 Page 4 62 HOPPING CENTER LOCATIONS Urban Decision Systems, Inc. untington Beach, CA 13-Apr_95 Mile Ring 1549M ID Name GLA Distance Direction Address To Site Opened 1981 Anchor Names Del Taco Sizzler Steak House Soft Warehouse 074452 PAVILLIONS PLAZA Total 141 4.40 27(NE) Brookhurst&Chapman Anchors Garden Grove,CA 92640 Community,29 stores Opened 1989 Anchor Names Sav-On Drug 041676 GARDEN PROMENADE Total 515 3.81 34(NE) Brookhurst&Chapman Sts. Anchors Garden Grove,CA 92640 Regional,60 stores Opened 1956 Anchor Names _ PriceCostco JCPenney Marshalls Miller's Outpost 041657 FOUNTAIN VALLEY PLAZA Total 116 2.81 129(SE) Brookhurst St &Talbert Ave. Anchors Fountain Valley,CA 92708 Community, 30 stores Opened 1974 Anchor Names Albertson's Clines Stationers Kmart Thrifty Drugs Von's Pavillion Supermarket 041655 BROOKHURST PLAZA Total 0 2.29 114(SE) 17155 Brookhurst Anchors Fountain Valley,CA 92708 Unclassified 064979 WESTHAVEN SHOPPING CENTER Total 61 2.04 83(E) Brookhurse St&Margo Ln. 15553-15691 Brookhurse . Anchors Westminster,CA 92683 Neighborhood Opened 1977 041796 WESTHAVEN NORTH SHOPPING CENTER Total 70 2.05 83(E) Brookhurst St. &Margo Ln. Anchors Westminster,CA 92683 Neighborhood, 18 stores Opened 1974 064951 BROOKHURST FASHION PLAZA Total 0 2.09 78(E) Brookhurst&McFadden Anchors Westminster,CA 92683 Unclassified Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 67A i Marina Del Rey,CA 902921(800)6"-9568 Page 5 63 TOPPING CENTER LOCATIONS Urban Decision Systems, Inc. intington Beach.CA 13-Apr-95 Mile Ring 154983 ID Name GLA Distance Direction Address To Site Opened 1987 063658 LIBERTY SQUARE Total 60 2.27 67(NE) 9908 Bolsa Ave. Anchors Westminster,CA 92683 Neighborhood Opened 1989 041795 FAIRCHILD CENTER Total 68 2.87 50(NE) SWC Brookhurst&Westminster Aves. Anchors Westminster,CA 92683 Neighborhood, 11 stores Opened 1961 041677 BROOK HURST SHOPPING CENTER Total 130 2.87 50(NE) Brookhurst&Westminster Anchors Garden Grove,CA 92640 Community, 3 stores Opened 1986 041670 BROOKHURST NORTH SHOPPING CENTER Total 15 _ 3.36 42(NE) 13301 Brookhurst Anchors Garden Grove,CA 92645 Neighborhood, 10 stores Opened 1979 Anchor Names La Casita Me)acan Restaurant&Cocktail Oriental Foods, Grocery&Liquor 041668 UNNAMED SHOPPING CENTER Total 68 4.90 40(NE) SWC Euclid&Chapman Aves. Anchors Garden Grove,CA 92645 Neighborhood Opened 1974 072849 EUCLID RETAIL CENTER Total 48 3.44 63(NE) Euclid St&Westminster 14241-91 Euclid St Anchors Garden Grove,CA 92643 Neighborhood, 35 stores - Opened 1988 041776 VALLEY CENTER Total 82 3.00 89(E) Edinger&Euclid Sts. Anchors Santa Ana,CA 92704 Neighborhood, 16 stores Opened 1962 072052 SOUTH GROVE PLAZA Total 106 3.63 60(NE) Westminster&Euclid Anchors Garden Grove,CA 92642 Community Opened 1990 070705 PRICE CLUB PLAZA Total 255 4.01 115(SE) NEC Talbert&New Hope Anchors 127 Fountain Valley,CA 92728 Community,20 stores Opened 1991 Anchor Names Pets Mart PriceCostco Source:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-9568 Page 6 64 HOPPING CENTER LOCATIONS Urban Decision Systems, Inc. untington Beach. CA 13-Apr-95 Mile Ring 154983 ID Name GLA Distance Direction Address To Site Sports Authority 041674 HARBOR PLAZA Total 79 4.98 58(NE) Harbor Blvd. &Edinger 13061-13125 Harbor Blvd. Anchors Garden Grove,CA 92640 Neighborhood, 17 stores Opened 1959 074557 HARBOR PLACE Total 120 4.99 58(NE) SEC Harbor Blvd. &Garden Grove Anchors Garden Grove,CA 92643 Community, 10 stores Opened 1992 Anchor Names Ross Dress For Less Smith Food&Drug 062067 FOUNTAIN VALLEY COMMERCE CENTER Total 43 4.06 95(E) 16650 Harbor Blvd. Anchors Fountain Valley,CA 92708 Neighborhood _ Opened 1985 Anchor Names Chuck's Mazda Mienieke Muffler Winston Tire 067704 SANTA ANA PLAZA Total 99 4.07 83(E) SWC Harbor&McFadden Anchors Santa Ana,CA 92799 Neighborhood Opened 1989 Anchor Names Lucky Discount Supermarket 041682 HUNTINGTON HARBOUR MALL Total 100 3.54 282(W) Algonquin&Warner Anchors Huntington Bch,CA 92649 Community,26 stores Opened 1968 Anchor Names Hughes Market 073458 MEADOWLARK SHOPPING PLAZA Total 119 3.10 286(W) Wamer AvelPlaza L.n. Anchors Huntington Bch ,CA 92649 Community Planned Anchor Names Payless Drugs Ralph's Supermarket 067738 UNNAMED SHOPPING CENTER Total 48 2.97 279(W) SEC Bolsa Chica&Heil Anchors Huntington Bch ,CA 92647 Neighborhood 041671 EASTGATE PLAZA Total 200 4.60 326(NW) Sauce:National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc 14676 Admiralty Way Ste 6241 Marina Del Rey,CA 902921(800)633-9568 Page 7 65 OPPING CENTER LOCATIONS Urban Decision Systems, Inc: itington Beach, CA 13-Apr-95 file Ring 154983 ID Name GLA Distance Direction Address To Site Valley View St &Chapman Ave. Anchors 120 Garden Grove,CA 92645 Community, 30 stores Opened 1954 Anchor Names Bank of America Lucky Discount Supermarket Thrifty Drugs A1669 UNNAMED SHOPPING CENTER Total 0 4.21 325(NW) Westminister Blvd. Anchors Garden Grove,CA 92645 Community )75172 WESTMINSTER PLAZA Total 54 2.87 309(NW) Westminster Ave.&Springdale St Anchors 31 Westminster,CA 92683 Neighborhood, 8 stores Opened 1976 A1678 UNNAMED SHOPPING CENTER Total 60 1.37 310(NW) Golden West&Warner Anchors Huntington Bch,CA 92646 Neighborhood Opened 1973 )73457 WESTMINSTER CENTER Total 450 2.23 330(NW) Golden West Ave.&Westminister Blvd. Anchors 184 Westminster,CA 92684 Regional,256 stores Opened 1991 Anchor Names Edwards Theatre Hollytron Home Depot Lucky Discount Supermarket Thrifty Drugs )54243 GOLDENWEST VILLAGE Total 30 2.23 330(NW) SWC Goldwest&Westminster Anchors Westminster,CA 92683 Neighborhood, 18 stores Opened 1977 )41797 WESTMINSTER MALL Total 1,095 1.33 315(NW) NWC Bolsa Ave. &Golden West St Anchors 455 Westminster,CA 92683 Super-Regional, 191 stores Opened 1974 Anchor Names JCPenney Robinson's-May Sears Source.National Research Bureau Shopping Center Database (SCL) Urban Decision Systems,Inc/4676 Admiralty Way Ste 624/Marina Del Rey,CA 90292/(800)633-9568 Page 8 66 § c.......� am . . ............. 3 ................. .f ........ .... ....... .. .... .. .. . . ........ . ................. .. ........ ... 4/26/95 CITY OF HUNTINGTON BEACH ECONOMIC DEVELOPMENT PROGRAMS REGIONAL ASSISTANCE PROGRAMS Lack of capital to start, expand, or relocate a business is one of the biggest problems facing businesses today. In an effort to relieve this problem,the Business Development division works to establish a good working relationship with local banks, state, and federal offices, and various other community, regional, and governmental resources. The division can then direct businesses in need to the proper sources and help them take advantage of a multitude of business incentive programs, including community reinvestment programs. SBA loan programs, industrial development and job training, financial incentive programs, those offered by Air Quality Management D'istri t, and bond and loan programs operated by the US and California Department of Commerce. INDUSTRIAL INTERVIEWS A program to increase goodwill and understanding between the city and its industrial businesses. Staff members visit firms to thank them for being part of the Huntington Beach community, receive suggestions on important city services,offer assistance with any relevant city or regional processes, and create awareness of special funding or other assistance programs that may prove beneficial. MAYOR'S BUSINESS FORUM! Regularly scheduled breakfast meetings are hosted by the mayor to introduce city leaders to a diverse range of businesses and business leadership in the community, from bankers and developers, to child care providers and the media. The forum gives elected officials and city staff members a dedicated time to listen to any concerns or input these businesses may have. Benefits include opening the lines of communication between bussinesses and the city and increasing mutual understanding among the parties. BUSINESS IMPROVEMENT DISTRICT The auto dealers have formed a Business Improvement District to further enhance business and advance the goats of the Huntington Beach Auto Dealers Association. Regular assessments and organized communication help maintain the auto row along Beach Boulevard with staff providing assistance as needed. BUSINESS ASSOCIATION ASSISTANCE Business advisory organizations are essential-to building a healthy business community. To promote the creation and success of these groups within the city, the Business Development division offers technical and staff support whenever needed. The division is in regular contact with organizations such as the Chambees Business Development Committee, the Huntinton Beach Auto Dealers Association, the Chamber's Downtown Business Committee, the Chamber of Commerce Huntington Beach Uptown Committee, and the North Huntington Beach Business Comittee. 68 4/26/95 TRADE SHOWS By attending and working the various city and area trade shows, including the Orange County Economic Development Consortium and those of the Chamber of Commerce, the Business Development division hopes to increase positive exposure and keep a finger on the pulse of the business community. Additionally,trade shows offer an ideal time to market the city as a viable location in which to expand or relocate. DIRECT BUSINESS ASSISTANCE . Business Development staff provide both technical assistance and ombudsman services, depending upon the nature and complexity of the business request. OMBUDSMAN SERVICES The Business Development division provides much-need troubleshooting services in its effort to assist new, expanding, and relocating businesses through-the governmental process. Staff members are available at early stages to help walk businesses through the system,assisting the permit process and working to identify any potential problems. To accomplish these goals, the division draws upon the talents of the city's Development. Assistance Committee, comprised of key staff members from all city departments involved in the permit process. This alliance not only benefits businesses, but encourages better communication between the departments and a greater understanding of the needs of the business community. MARKETING AND ADVERTISING The Business Development division continues its ongoing marketing effort to publicize and promote the city of Huntington Beach. It is through this active promotion that the division receives the majority of calls and referrals-some as far away as Texas, Florida, and Guam — and thus,considers all its marketing efforts a vital part of accomplishing its stated goals. HBTV CHANNEL 3 The Business Development division promotes better community relations through public service announcements and shows such as Made in Hurrtrngton Beach. This show spotlights Huntington Beach manufacturers and takes viewers on a visual guided tour of some of the local facilities that are producing products -here for export throughout the country and the world. Additionally,the Chamber of Commerce highlights members and special business development programs through a regularly aired show called the Business Roundtable. 69 4/26/95 AD CAMPAIGN The Business Development division promotes the theme How to Turn Red Tape into Red Carpet,'by initiating a multi-media campaign with the goal of informing the public, especially the local and regional business communities that the Development Assistance Committee is on their side, ready to assist them in getting through the governmental process as smoothly as possible. Ads currently run in Orange and Los Angeles counties business publications, reaching approximately 70,000 business people, as well as in the cWs `Sands" publication, the Chamber's monthly newsletter, and other trade directories. PUBLICITY The Business Development division regularly receives media exposure throughout the region in such publications as the Los Angeles Times, and the Orange County Register, Orange County and Los Angeles Business Journals, The Independent, The Local News, and the Huntington Beach Chamber of Commerce Newsletter. It is widely thought that exposure through public relations is much more valuable than even paid advertising. Such a program helps formulate a positive image for the city and its departments. _ SHOP HB CAMPAIGN The Business Development division and Chamber of Commerce recognize that keeping shopping dollars in the city is one of the most effective ways to increase sale tax revenue. and they have taken steps to address this issue. An overview of efforts to date include letters from the mayor and city council to 40,000 Huntington Beach households. Shop in Huntington Beach' street signs throughout the city, reminders sent out with municipal service billings, and other direct mailings, school district informational programs, publicity in the Sands and other local papers, and enthusiastic support from the Auto Dealers Association,the Huntington Beach Mall, and other local merchants. CONFERENCE AND VISITORS BUREAU As a program funded by the city's Economic Development Department, the Conference & Visitors Bureau is responsible for promoting Huntington Beach as a vacation and conference destination. The Business Development division assists the Bureau in marketing special events, jointly represents the city at trade shows. provides technical and staff support when needed, and assists in creating collateral material for various programs. INDUSTRIAL DIRECTORY The Business Development division, acknowledging the Chamber of Commerce's knowledge and expertise of the local business community has contracted with then to compile information on approximately 400 industrial firms in Huntington Beach.. A manufacturing business-to- business directory is an effective tool to help Huntington Beach's industry shop at home. A new, updated directory is published biannually and made available free to requesting businesses as part of this successful ongoing program. 70 4/26/95 BUS!i�ESS PERMIT GUIDE This helpful printed reference serves as a businessperson's first contact with the city and introduces the many programs, services, contact people, and other departments responsible for the various permits and processes. It is also designed to give an overview of other county, state, and federal agencies and their requirements. The goal is to take a User friendly'approach, essentially walking the reader through the entire permitting process, and becoming as beneficial and helpful to the business community as possible. TECHNICAL ASSISTANCE The Business Development division fills the need for new, expanding, or relocating businesses by offering the convenience of a comprehensive information source. Businesses need a central resource to turn to for authoritative information and advice on business-related subjects such as marketing, licensing,permits, and financing. For more specific, in-depth information, the Business Development division utilizes the Small Business Assistance Center. SMALL BUSINESS ASSISTANCE CENTER The Business Development division, partnered with the Huntington Beach Chamber of Commerce, and funded through generous grants from GTE, Califomia and Southem Califomia Edison Company, has created the Huntington Beach Small Business Assistance Center (HBSBAC). This invaluable center provides seminars covering topics unique to the small business environment and geared toward increasing new venture success, profitability, employment,and renewed vitality of the local economy. In addition, the Huntington Beach business owners, entrepreneurs and managers can take advantage of free one-on-one counseling services conducted by experienced business consultants,and can access a library of useful business—related information. The HBSBAC also provides businesses with access via computer to CD-ROM information provided by the US Department of Commerce on export opportunities. ORANGE COUNTY CONSORTIUM As an executive board member, the Business Development division is helping to conduct a complete analysis of available public and private resources to better prepare and assist those who call on the Consortium for help. The Orange County Consortium is a countywide economic development group comprised of leaders from cities and the private sector throughout the county. Realizing that working together toward the same goal is far more effective, the Consortium is taking a regional approach to business retention and attraction, working together as a coalition instead of each city competing_against one another. This effort will increase in value as the Consortium nears it's goal of raising capital and hires up to 10 staff focusing on regional marketing,attraction and business retention, TEAM CALIFORNIA The Business Development division is active in statewide trade shows and has access to state resources, funding, and other assistance made available to help local businesses, and is a member of one of the state's economic development programs'Team Califomia As appropriate, the division can also assemble*a special troubleshooting Red Team to address unique situations relating to permitting,taxes, or other state-regulated processes. g:jim:eds:edpgrms 71 � tach ............. men �...........4 fir: ------------- .6 s ECONOMIC DEVELOPMENTIREDEVELOPMENT SERVICES BUDGET/STAFFING COMPARISONS ...........................::::•.�:::•::•.�::.:..........,. ..o.ar :t••:. :Yr S.}}•<. .. .f} .. 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'•:{4:�}:•:y:iS:�:? .::...:.:.... ....t....v..:•vn�•.vt..:. ...x..v..-t n....::. :..•\.. n::.v.{,{F,..,.{.{::.v.}•.....n...::::::: ({•,- .n..n\...v..... ♦ v.nv..h.........}. ... nv r..r:n•::.......w::::::::v.:....:-.4:.:w:.:...r..r.,vnr.v:• x•...: " .�'hvv.....,..... ..:.....<:.:::}r..::.v.............f..r.:.n.:/f..:.\:,rF},••:rr::.::::.v..... .v.,.....n.x:.... }:•vvY{:::.}v.}Y:.�:.}:::::{.v..:.<.:p<,.Ff::r}:•:i•}::»t•}:;;.: }h'S}}{}:%•};n;\�}ti:`::{t�%:.}:}}.::•.fih.h}a.Y;{?;{.ry5?}?i:nvv:;.:Sa}v::::::::n. .......v:.t:v.-?:;:..:n ' February: 17 Receive direction, discuss specific near-term economic development issues with City Council Economic Development Committee (EDC). 17 Receive input, discuss generalized long-range "image" related considerations with City Council Economic Planning Committee (EPC). March: 20 Participate with Chamber of Commerce focus group to incorporate their views on economic development needs. 24 Discuss initial business group meeting, receive direction from EDC and EPC representatives.- 28 Incorporate further input from EDC members in advance of second Chamber business group meeting. 29 Follow-up meeting with Chamber to finalize-their comments and input to the process. April: 14 Meet with EDC to discuss progress to date,present outline of strategy report, including: 1) Community economic base analysis, and 2) Marketing action plan for business attraction/retention. 21 Discuss future implications of Strategy,receive additional input from EPC. 4/24-5/12 Participate with business community focus groups representing the following areas: 1) manufacturing, 2)• development, 3) finance, 4) tourism, 5) CALED, and 6) retail/service/professional. 75 is}!:•:-'::•:v::�:}:;::'::y�: f:f ifY�%:?ii�:}i�:v'•:�;:::}ii i':::�:;i{:j::Ji:ii:F::S}v,.;i v -.::::{C}:•}i}••}}?}?:4:.}}}:;::.}.::::::::::::::::::.:::::::::.v::::::}'.......-.:�::::.}'L.:�'^}??}Yi'-?:Y}:C:�}}:.i}:4};-iii:vi::�:.:?:.v:v:r:.:}v;:::. :.::nv::::::4v::::ny:nv:•.v.: ..:::::n:•:::::.v::•::...::...v•. •.::::::::::..::nw:.-:.:ritY:%}?:`$iiiiiT$?}:•}r•,vii}.:::::;::L.}:?{.i}.;-:!_}:?:':.: ..:}:?.y>}•::::_- v..-w;..-.............. ...:.. ...::.o.............. r::F:.:.?•Y:::::::._:::::.::::::.YY::...• •G:?:':�.......v.. n.;.:n:.:.,}:. r x.{{•:ion:;!.?:v:4i?:::?`.2:':vii:�.v}::.w.tt?:•ix� . ..,..v v:::::x.......r.... n.::......n...,•:.•r:::::::I..;;;w...:...r................................ !<::w:::::.v::::::........n.::-:-vy:::.?.?':.:::::...::::.:w::w:.vm•.v::::::::�•:::nv: ...F.................n.................•;.•;.................n:•.$ ........................................ v4:vvx:vv v.:w:•:;;; ^'iw:r:•}'::?}: ..n................... ..............n.. ......u..............n:•........... :+v}:n}:^:•}'{.i:4}??}:{•}:•}•}... :...:......r............v..:•:.,:v.-nv;r.....n.......:.....v.......:..n......{.•};f.:::::::::n w....:...:.... ...........rw::::-.v::•f.••4:.v n...........-�•n:{vr:::..:......r:r:Lw:n.v:.•:.v::v.:.:..::.v:::^::.v.:v:v:vY...... :•r.•R:v:v. ::n/.4}}iw:::::::::::::::.v.?•:•.v::w::::.vr::.:x4r+v:::N::.i •:F:. :•rrr. ::•r•Y' �C- :_e ��Y311 ..f...::Ssiii:<:'viiiii:i:ii;�ii:--i�?i: :F:}vy:4'�i:•}iii:+:?}::;::i?}?i}ii:%}}?i•:%�::<?ii?'{''':i�:ii:�i:?:iji�i:iv;}:�;:;; ...... ..;.-v:m::•..............................vv:i.•:::...r:::i:?;....-;.......:....:v•v•:::v:::nvv. ^?'•- :::.?•f:•}?iY:•} }:{•'Jiv}?:4....x.? .............n.. ..n....:............... .F.....::::.. n...... .... .. ...............r..n....t r......r:w:::::::;.v.:�:x •::h>;r?•:nv:in:v:::nv.v;. ...............v::.v:..v,........ nvn..........::.x...............rr.::.v:u.::.:??:{:ri;ti�Y.n.es.n..... :x:n?•:::::. :;i:%�i:::.:tij:;;�:;i:4':'::•,.:'v:•%!{ti}ry�{:::,i•::�>:•?Y:{:v�'i%:i::::iii:�:•:•i:•:n......:.:. ..•-w:::::::;:.........••... 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C::` '•i::'C•i.`-::Y}?Siii9•`.:S::Ri::::2>�`-fi:=:F�.`-:Y;:iY�`:v:;i:?-:i::a-!•:::: : t -:n•::n•.' ` edt1�G>?O�� ....��hSCi#S`b`1 ,,.....??.}:!•??;:}i':��is;.:•:.}::F?::fiY:•}:i:}:xF?:.::r.}}::}S:?F•:nv::.v......� � -::}.:.v: •:..:.............................:....r.:.::.::::::,-:•?--}}:•:v<,�:�;:r::-;.:;.?:?:a;•}: :-::::� .....:.....::::..::.. .:... ::sf:>:Lrx;•}:?�:<:><:s�sii;i:=>:�>:Y�:�s:;::•:.za ........:......{.:•::•::::::::....,...:...r..... - .:. ••rr::::::rF:n._::'•:?r.::.}:?.}:..:�.;<:;;Y:;.�?:rs:>:s>: ....r,:.r..... .-:•-:::•:::::-;-.}i:•?:•;i:•f•�Y:•?:•?i:;.?:::.}>•?;::;•}r-??:..-:•}}':•;:-?:.}:.?•:..::}. -: , ................ tt::::»<::::::-:=t•::r::::..::.....r....... ...,•.v:::::-is<:�>::z�>: MAY: is Follow-up with Chamber Focus Group. 26 Follow-up with EDC regarding Focus Group results. Tune: 23 Present first draft of Strategy to EDC for review and comment. Ju1Y _ 7 Present first draft of Strategy to EPC for review and comment. September: _ 4 Present completed Economic Development Strategy to City Council for adoption. (g\hc\timeline) 76 '�' � achm�nt 6 3/30/95 QUESTIONS AND ANSWERS ON ECONOMIC DEVELOPMENT STRATEGIC PLANNING 1) What exactly is meant by the terns "economic development strategic planning?" Economic development strategic planning is a process for assessing a community's competitive position, both within and beyond the borders of its regional market place in terms of job opportunities, tax base, and general quality of life. Moreover, it is a means by which to adjust for any perceived imbalances in the community's economic base through the provision of proactive business attraction and retention initiatives. 2) Which factors constitute a community's economic development potential? Community economic development potential may be defined by the ability to generate employment and tax base sufficient to meet the needs of the resident population at a minimum, and ideally, to produce on excess of goods and services available for export to outside markets. 3) Why is Huntington Beach undertaking an economic development strategy at this time? Huntington Beach has identified several structural concerns in the composition of its economic base which make it difficult to provide the optimum level of public services due to financial constraints. Namely, the community exhibits below average retail sates activity and shopping opportunities for its residents, a declining commercialrndushial property tax base, and a less than desired jobslhousing balance forcing many residents to commute outside the immediate vicinity to work 78 3/30/95 QUESTIONS AND ANSWERS ON ECONOMIC DEVELOPMENT STRATEGIC PLANNING- 4) What form will thestrategy document take? Typically, an economic development strategy is divided into two major components: ® A community economic base analysis which serves to evaluate the local economy from a statistical standpoint. ® A marketing action plan for business attraction and retention which emphasizes the community's strengths as a business location, while minimizing and/or rectifying any perceived weaknesses. 5) What are the goals of the strategy? The specific goals of the Huntington Beach economic development strategy are in the process of being formulated through focus group discussions with the business community, meetings with the city councilieconomic development and economic planning committees, and city staff. The strategy's goal statement is really more of an outcome of the process, but will probably involve the following items at a minimum: ® Expansion of the retail base. ® Expansion of the commercialrndustriai property tax base. ® Attractiontretention within targeted business and industry clusters, probably high-tech manufacturing and service-oriented, and tourism related. ® Local job creation in the above-mentioned clusters. 6) What are the expected outcomes of the strategy process? The successful economic development strategy will produce measurable results in terms of new tax revenues and jobs, specific to the cluster areas targeted by the plan. While these targets have yet to be specifically identified, they will no doubt follow•to a great extent along the above- mentioned lines. 79 �� Attachment 7 fi <' CITY OF HUNTINIGTON BEACH ECONOMIC DEVELOPMENT STRATEGY FOCUS GROUP SURVEY Mission Statement: To assist in the development and implementation of an Economic Development Strategy designed for the attraction, expansion and retention of business in Huntington Beach. Included in the Strategy will be the evaluation of economic incentives and the reduction of regulatory barriers. Goals: The goals of the City of Huntington Beach for an economic development program are to reduce or eliminate physical and economic blight, create/retain jobs, and enhance the local tax base. Question for Focus Group: !ghat toolsrncentives should the Huntington Beach economic development program have to retain, attract, and help grow businesses? 1. 2. 3. 4. 5 6. 7. 8. 9. 10. Please write down your ideas to answer-this question and fax to Jinn Lamb at City of Huntington Beach, (714) 37.5-5087. Feel free to send as many ideas as you wish. Information as to sender will be confidential, but all answers will be shared with our consultant for inclusion into report to City Council. g:fcgrpsry 81 ttachment 8 ECONOMIC DEVELOPMENT STRATEGY COMMENTS By CHAMBER'S FOCUS "BUSINESS GROUP" . .............. City must walk the talk— City goal to elevate City needs courage to make Pro-business attitude economic development to hard decisions neededl level of importance of environment . ......... ........ ....... P }.v:?fri ............ . .. ...... lit. .......... v�oILis .......... . .... . ...... ....... ... .. .................. ....................... ..................... ....... ....... . .jgiijtii��. .......................... ............................. ........ .... ............. Image city created through A combination of Koll project is anti-business incentives and pro- message business atmosphere is the key to ED success ar w ............... -------- Economic Development A top priority needs to be should begin with for Huntington Beach to retention—existing become "business friendly" business tov priority ............ ... ....... X "X"... ............. ............ ............. ... ..m.. f. a� .......... 3 .............. . .... .. ..... . ............. ............. Treat business as special, Huntington Beach needs to like customers increase tax base.,not taxes .... .....................Waffi, ................... ............ ...... .....................nf. ........... ............ ..... ... ........M­ Publicize good economic Customer service needs to development decisions,e.g. be emphasized in HB ceremony honoring early payment of readerboard sign debt Ccm ......... .......... ........... .......... .......... ....... . ........ ............. ............... ...... Wes:....... .......... ............... ......... ............... ......................... .... ......... . ......... .. .... ....... - -.......... ..... ...... . .......... . ...... ... .. .. .... ..... ._­&........... .. ........... . ......... ... .......- ....... . . ... .... ... ...................... 'an, Se ....... ....... . ..... .... .. . . 83 ECONOMIC DEVELOPMENT STRATEGY COMMENTS BY CHAMBER'S FOCUS "BUSINESS GROUP" .... ........... .... ................ ..........- ........... ... ............................ . . ..... ... ..... .... . ........ ft es ... ......... .. . .......... ......................... . ............................. ........................ . ......... ..........................I.................. ... .......... . .......... . ...................................... . .... ... . . ....... Need both bank and non- Go the extra mile— Find out what utility bank access to credit (CDC, ombudsman,permit companies can do to help etc.) assistance,one-stop shop hia........ ... ... .............. . . ...... . ... Fee incentives/waivers/ ED Strategy needs to be the reductions implementation component of General Plan ED Element aw. fiqu ........... .... ............ .... .......... ... ............ .... -prea, . .........- ... ....... ...... ............... .......... ......................... ............. . ......... ....................... ................................. ....... ......... ... ......................................................... .............................. . ........ ...... .................. ........ ..................................... .............. ... . ..... . ..... ...... . ...................... .............................. joint projects where city A combination of rebates portion of incentives and pro- sales/property tax business atmosphere is the key to ED success ........... ....... . .... ...... .... ..... . ........... ........... Need more than just mottos Need more than just talk, real commitment to ED necessary 4ASen Understand your Have information on competition and be better,, available land and sites e.g.-Riverside County incentives use ri" 84 ECONOMIC DEVELOPMENT STRATEGY COMMENTS BY CHAMBER'S FOCUS "BUSINESS GROUP" ............ . ......... ... .......... ............. ............. .... ........... ............ ....... ... ............ ............... ...... .............. ........ ..... .... .. ... .................. ............ ........ ........ ........... .. ... ti . . ........ X., xx- X ... ...... ...................... XXXX... ..................................... ......... Marketing "package" for Tourism/ocean location ED Strategy needs to be the each business (big must be exploited (not just implementation component industry,small retailer, Surf City) of General Plan ED Element etc.) ... ......stet.. • 101, ---*---,.-;.:.�.�,.' -, 91. Y...>Ke........................... . ....... ...- . ..... i"Offi? f ........................ ............... ............. . .............. .................... ...................................... .... ..... . ... ..................................I , ............ .... .......... ................... .................... X: ......................................... .........�:.:.......... .................................... ................. ............... ........................ ..........--.......................... .................................. ..... ......................................... ......................................... . . .... ........ ........... .. ... ................. Public relations important; Internal education with Assess Huntington Beach advertise in other residents as to importance strengths&weaknesses states/regional ads of businesses.to the city from a marketing (competitive standpoint) ...... ...... �00i. X M ............ MN ................I ..... ........ ........................... Ideal locale for clean Educational resources Several large projects (i.e. industry important,e.g.local Koll) have set a negative community colleges ISO tone for future ED program ........... ............ ........... .. ........ ............. X, 0 id...... Ro, WWI . ............... diift%00 0 Ap ............ ........ .... y ...... . ...... ............................. .... ........ .. ...... .......... ... . ....... ................ .. .. .. .. . . ... ................ ... . ....... .................... ..... Need more than just mottos Connection be taxes Should be able to identify and services top 10 reasons why business can be more profitable in Huntington Beach ......... ............ W... - . X ...... :Jbff ........... ....... .. ..... ........... ..... .... ------- ------- .............. ......... ........ ....... _..... ....... ....... ....... ........ ....... ........ ....... Made in HB labels to put Do situational analysis— Identify what sets on products manufactured what do we have/need in Huntington Beach apart in city terms of business types from competition 85 - � ' � 86 ............ ... .......... ........ ... ........................................................ .................... ............. .............. .. .......... ................ .......................... .......... ....................... ........... .... . .............................. ................. ..................... .... .... ................................... ............. ............ ..................... .............. ............................... .... ..... .......................... ................ .. ........... ..... .................................. . ........... .......... ... .. . .... . ............ ......... .. ..... ................... ............ ......................... ...... .. ................ .. ....... ................................................. . . ........... ...... .......................... . ........... . .... ............................ ........ . . .... . ............... ................................................. ............... . ......... ............... ......................... .. . ..... . ......... ............................................................... ............ . ...... ............. .................- .... ............................................ ........... . .. ... ........... ............................................. . . . .................. ............... ......... ...................................................... .................... .................... ............ .................. .................. ................ .......................................... ..... ..... .......... ........... .............. .... .............. .. ... . . ............ . . . ... ............ . .......... .. ..... ................... ............. ............................... ...... .............. 87 ATTACHMENT HIGH TECH CLUSTER BY SIC CODE Industry Industry Group No. No. 357 Computer and Office Equipment 3571 Electronic Computers 3572 Computer Storage Devices 3575 Computer Terminals 3577 Computer Peripheral Equipment 3578 Calculating and Accounting Machines 365 Household Audio and Video Equipment and Audio Recordings 36<1 Household Audio and Video Equipment 3652 Phonograph Records and Prerecorded Tapes and Disks 366 Communication Equipment 3661 Telephone and Telegraph Apparatus 3663 Radio and Television Broadcasting and Communications Equipment 367 Electronic Components and Accessories 3671 Electronic Tubes 3672 Printed Circuit Boards 3674 Semiconductors and Related Devices 3675 Electronic Capacitors 3676 Electronic Resistors 3677 Electronic Coils, Transformers and Other Inductors 3678 Electronic Connectors 381 Search,Detection, Navigation, Guidance, Aeronautical, and Nautical, Instruments and Equipment 3812 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments and Controlling Instruments 382 Laboratory Apparatus and Analytical, Optical, Measuring and Controlling Instruments 3821 Laboratory Apparatus and Furniture 3822 Automatic Controls for Regulating Residential and Commercial Environments and appliances 3823 Industrial Instruments for Measurement, Display, and Control of Process Variables and Related Products 3824 Totalizing Fluid Meters and Counting Devices 3825 Instruments for Measuring and Testing of Electricity and Electrical Signals .3826 Laboratory Analytical Instruments 3827 Optical Instruments and Lenses 88 384 Surgical, Medical, and Dental Instruments and Supplies 3941 Surgical and Medical Instruments and Apparatus 3842 Orthopedic,Prosthetic, and Surgical Appliances and Supplies 3943 Dental Equipment and Supplies 3944 X-Ray Apparatus and Tubes and Related Irradiation Apparatus 3945 Electronic and Electrotherapeutic Apparatus 395 Ophthalmic Goods 3851 Ophthalmic Goods 386 Photographic Equipment and Supplies 3961 Photographic Equipment and Supplies ECO-TOURISM CLUSTER BY SIC CODE Industry Industry Group No. No. 581 Eating and drinking places 5812 Eating places 5813 Drinking places (alcoholic beverages) 701 Hotels and motels 7011 Hotels and motels 783 Motion Picture Theaters 7832 Motion picture theaters, except drive-in 7833 Drive-in motion picture theaters 792 Theatrical Producers (except motion picture) Bands, Orchestras, and Entertainers 7922 Theatrical Producers and Miscellaneous theatrical services 7929 Bands, Orchestra, Actors and Other Entertainers 841 Museums and Art Galleries - 8412 Museums and Art Galleries 8422 Arboreta and Botanical or Zoological Gardens 873 Research, Development, and Testing Services 8731 Commercial Physical and Biological Research 8734 Testing Laboratories 951 Administration of Environmental Quality Programs 9511 Air and Water Resource and Solid Waste Management 9512 Land, Mineral, Wildlife, and Forest Conservation Source: Executive Office of the President, Office of Management and Budget 89