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
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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
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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
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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.'
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.
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Fe :
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).
Marche
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.
Ate:
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
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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
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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
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fr:?:•:::is i::•:t v:•:L::::?:iv�i'.?:?:::?:.�•,v�}f;..v:
...f... ...>:...
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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:::>:;:::< >
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^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:;>:,:,,?>.?•?..:•:•::
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:.:.�:.�:: :::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
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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;:
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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.)
# :°•--..
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........... : . .. ......... �ex�:- eec�sui :: x::»:::;::,: .:i� u`� .>un� log........... ..
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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
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..................::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
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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..................
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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
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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 ............
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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
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.... ........................ ..
No. Title Mat Amount.` Term .� Source Uses .:. Re . .:.< <::<:: : ::... .:>Incentwe.::.:
1. SBA Loans
* Section 504 $500,000 20 Years SBA-guaranteed debenture Fixed assets No Provides additional security
for private lenders through
* Section 7a $500,000 7 Years Direct SBA guarantee Working capital SBA guarantees
n tic ietailer to select one
..:.. ..:..:
l n e e e t a co strucUon >:>No :::»; .En es.
Sales;Tax:.:..::;::::;: >:;::.;>;:>>;.:.Estab tshed b ..<;:::::;;: .Va cs...;:::::::::::.::::;> ..1'ro ct. n r M.cd salesaax....... .w.
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9 urvalen ..Loans.:.:: :.LocaLAuthon .:::::... :...:,.:::..:..::..::..::...:.:: revenue:::.::::::,:.::.:::::::::::::.:::::::,:.: :rehab> ark�n :offsttes.:::.::.:::::::::::::::::::: :c. :ov..::...:...:...:....::...:......:..:.;:.::::::.
cY.. . ... .... . . ........................�Y ...:.. :::..:::.::.,.P::.:::::. :::::::..::..:::.::::::.::::::::::. �Y::::::.................................. .....
e a e
mark t tr dear a
3. 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:... ......::.:.:.:.. ....::....................:..:.�.......:.:.::..:.. .. P..::: .::
man e ::..::........ ........................ to liorro�er<:::<:>::::>::>::>::<:;':`
Develo ment nds:::. ::..::.:::....: :::::::::.. :::..;. _undenvnters..:.;;:;:-:.::.:.>:::::.;:;;:::..;.:.;: .:for: actor rs............... ..................... ..ra s.to. . ..v.Bo )...::..::..::.::..:..........:.:.::::.::. ...............
_...... ........ : ... . .... .:..... ....... . .
5. 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
: .... .... .
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7. 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)
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ECONOMIC DEVELOPMENT ZONES
SUMMARY OF BENEFITS/INCENTIVES
STATE
%...%:.:.:..
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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 $20 Million Per Year)
Upfront Exp. of Depreciable Property
Interest Deductions to Lenders
Tax Credit Deferrals to Future Years
>::»::>::>::>::;:::<:>::»::;::>::,:>::>::>::;::>::»:...... ::>::>;:<:»:<:>::>::::O..ho....a1 Y.ocal Bene s
: :::::::.:::::::::::::.::::::::::: :. ...::::..::.::::::.
Building Permit Fee Waivers/Reductions Preferential Leases of Public Land
Plan/Permit Expediting Equivalent Value Added Tax Loans
Utility Rate Reductions Equivalent Sales Tax Generation loans
Low-Interest Loans Direct Loans and Loan Guarantees
Zoning Variances Land Assembly Assistance
Business License Fee Waivers/Reductions Public Parking Development Assistance
Public Infrastructure Supplemental
Assistance
Planning and Engineering Technical
Assistance
Educational Assistance to Small Businesses
Related to Key Development
Issues/Regulatory Requirements
Plan/Permit Ex editin
ECONOMIC DEVELOPMENT ZONES
SUMMARY OF EENEFITSANCE S
FEDERAL
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•1r•e�••.j�..�. �•i:riv'�i:'i:::::::•ti:'i':$::{{:ii:!�ii�:t:i:::?::?!:ii:iY:::i:
:::niv.�::::::::.�:.ii':.::•:::-:•:-:•:'-:is i::.::...:...:.::..:::.:N••:::••:::..:::::.:.•:•:.v-:::::•::::.
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:..:.::::.::::..;.:.::..;..:.::....:.. ............... ................:.:...::......:..:::.::..::.:.:.:..:.:. .,........ ..... .. . .
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
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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)
.....................
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3) Transient Occupancy 10.0% 13.0% 12.0% 14.0%
Tax(Annual)
4) Traffic':I F C*r��T mpact:� .........
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5) Arts Fee -0- -0- 1.0% Per Sq. Ft:
(One Time) (Downtown) $0.39-$1.57
(Max. 1%)
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7) Rental of -0- -0- -0- Gross Receipts:
Commercial Property $110.86-:9$75,000
+SIAS per$1,000
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00 0 Sales Tax
o Property Tax
M
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4) Targeted "Cluster" Catalyst
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Note: Any project with average score exceeding 7.5 eligible for consideration of financial-assistance depending upon availability of funds.
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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
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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
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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.
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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
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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
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lit. ..........
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.......................... ............................. ........
.... .............
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 ......... ..........
...........
..........
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. ........
.............
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Wes:.......
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. .......... . ......
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'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,
. .........- ...
....... ......
...............
..........
.........................
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... .........................................................
.............................. . ........ ...... .................. ........
..................................... .............. ... . ..... . ..... ...... . ...................... ..............................
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
........................
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. .............. ....................
......................................
.... ..... . ...
..................................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
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86
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............................... ...... ..............
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
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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
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