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Home My WebLink AboutReview of Economic Development Strategic Plan - The Agency r HUNTINGTON BEACH, CA ECONOMIC DEVELOPMENT STRATEGIC PLAN Linda S. C®nglet®n & Associates Linda S. C®nglet®n, Principal E LINDA CONGLETON S. 5 _ .' 3 ?vim �z , 'F 6' E S i EXECUTIVE SUMMARY STRENGTHS 2. Edinger/Beach Freeway Access for Commercial ° Strong commercial retail offerings for local residents & nearby communities W Highly suitable for big-box retailers, small- CD shops, and .national chains Ease of freeway access and high visibility contributes to strong demand EXECUTIVE SUMMARY STRENGTHS Excellent Resident Amenities & Reputation ® Long stretch of world-renowned beach ® Quality schools and sports teams ® Popular and unique Central Park s Sports Complex M Shipley Nature Center ® Huntington Harbor Bolsa Chica wetlands X� Off leash Dog Beach ® Nationally recognized bike friendly city x y. ® Popular Beach Events CD 3 US Open of Surfing CD e NEXECUTIVE SUMMARY STRENGTHS Hyatt/Hilton Resort & PCH Tourism Potential ® opening of Hyatt/Hilton rejuvenated hospitality offerings ® caters to business, convention, and upscale m leisure travelers ® Name brand, ocean oriented hotels fare better during tough tinges and improve faster than other u hotel products ® Scarcity of ocean-front hotel properties bodes well for long-term room demand i i� �t r s EXECUTIVE SUMMARY WEAKNESSES ■ The City's economic development weaknesses are few: 1 . Several weak/older unanchored retail centers on Beach Boulevard; 2 . Along-term weak demand outlook for the W office market; 3 . A structurally inferior industrial area, the Gothard Industrial Corridor ( Edinger to Ellis) . CD CD 3 EXECUTIVE SUMMARY -P WEAKNESSES Abundant unanchored retail : ® Unanchored centers considered weakest: Not considered investment grade, � Produce lowest sales and rents U ® Beach Blvd contains a number of these with weak E tenant mixes housed in outdated buildings y ^ ® Business improvement dollars or marketing efforts cannot improve these offerings e ® Beach/Edinger Specific Plan encourages E revitalization as mixed-use residential projects CD 3 ASSIGNMENT Prepare an Economic Development Strategic Plan : Provide practical strategies that can be implemented by the City's Management Team Update the City' s Economic Development 5 Element of the General Plan ( not updated since 1996) SCOPE OF WORK • Participated in a kick-off meeting and brainstorming session; • Conducted in-field evaluations of 2 + City properties; • Updated key City economic data; E Analyzed the Cit 's strengths, weaknesses, opportunities and threats ( "SWOT Analysis" ); • Identified potential opportunities for economic v growth; W , CD ' s -P SCOPE OF WORK Identified significant issues impacting the future of the City's economy; Prepared local-serving retail demand analysis; Recommended highest-and-best-opportunity market voids; Prepared a five-year Economic Development Action Plan . CRITICAL FACTS/GOALS Develop action-oriented recommendations resulting in achievable economic benefits; ■ Identify opportunities for increases in retail sales taxes; property taxes; and/or transient W occupancy taxes; ■ Focus market research on tasks that would achieve the City" s pragmatic financial goals . KEY ISSUES 1. Given past boom economy tz005-2007), followed by recession, what are the market realities today and in the future? z. How does the local/regional economic business/ real estate context impact the City? 3. What is the City's competitive position in the region ? 4. What are key City economic drivers? KEY ISSUES s. What are the highest-and - best opportunities for business expansion, attraction, and possible recycling? 6. What are the City's strengths, weaknesses, W opportunities and threats ( "SWOT Analysis" ) ? 7. Are there any other significant economic issues impacting the City economically? 4 CD 3 CO EXECUTIVE SUMMARY STRENGTHS Primary "economic drivers," or critical strengths: 1 . A large, affluent resident base; 2 . Convenient freeway access ( Edinger/Beach ) to regional-serving commercial sites; E y . highly desirable residential living amenities; k, . r . Top quality Hyatt/Hilton Resort comp lex. n , p EXECUTIVE SUMMARY STRENGTHS Affluent resident e ® Strong Demographics Population (2010)0 193,566 & 74,681 households Solid Median & Average Household Incomes $831644 and $105,996 ® 8.5 Miles of PCH Coast shoreline with year- round round pleasant weather is a major draw y ® Unemployment rate of 7 ..8% F (2 points below OC avg. ) r EXECUTIVE SUMMARY WEAKNESSES 2 . Weak office market : ■ Difficulty attracting prestigious Class A office due to regional competition ■ Part of the West OC Office Market W Vacancy Rate of nearly 19% (— 1 million square feet) Negative annual absorption rates Low Monthly Asking Rents Average of $1.92 per square foot Large county-wide over-supply of office space ■ Incurable structural problem created by over- building by the private sector r+ CD EXECUTIVE SUMMARY WEAKNESSES 3 . Gothard Industrial Corridor: Outdated industrial rationale: old rail line, no longer used Contemporary regional industrial sites require freeway access Gothard lacks close freeway access N Dominated by small users High quantities of outdated and poorly maintained buildings ® No amount of marketing, promotion, branding, or rehab efforts will improve this industrial sector's problems ® City is facing industrial over-supply issues w ® City has 1.8 million square feet for lease .g ® Estimated 15-year over-supply for West oC HUNTINGTON BEACH INDUSTRIAL AREAS > . 80; 3. F McFaddaai % r Kell Fo� arner � itl (y Talbert f 2 ul Ellis .! ,.41m �n aeld c Ind inapolls s � Atlanta ��d1°l�lti'YP9 $Rikll InQ COD CD 3 CbEXECUTIVE SUMMARY OPPORTUNITIES The City's economic development opportunities include: 1 . Regional-serving retailers on Edinger; 2 . Grocery square footage; N 3 . Mixed-use residential; 90 4. Conversion of selected Southern Gothard Industrial Corridor sites (Warner to Ellis); 5 . Limited service hotel on Edinger; 6. Waterfront Hilton expansion; 7 . Another PCH hotel (long-term). EXECUTIVE OPPORTUNITIES 1 . Edinger regional-serving opportunities: ■ Are the only remaining parcels suitable for adding big- box and other compatible small shops and dining ■ Selected big-box retailers still seeking sites ■ Candidate retailers are finite; most the of best ones already exist ■ Regional competition for top retailers is fierce ■ City may need to act quickly and decisively to create a welcome business climate ;- CD 3 HUNTINGTON BEACH REGIONAL RETAIL TRADE AREA .1 N 0 � ,: rd3�c x<aerq ;`. •... � � -_ '`` €Y z" ,,.. Ix i; ! 1� L �„ :.' } Et Orradds Et tkxa9o� eois Rd Anaheim $ i t 4 t3each SrnrtY ofPk> r Cypr@53 Isla V nd' a 5artheas YiFI € TrT - / - • AYrPorE \ jjjj da x„.;.W.. $ <• n Cv+Ereos,aw xCerreaa ire EI 6 9hfr7glE�+ - '� =k<= t4F ,fZC�l0Y3RI PtC ,t.OS `•' �.$tBtltOn ' E ti� d Center r ' t ✓ / z > aaEPac�€cO(eng@ f E r t:,J g Park Estates 12035rYtow 3 x <r � � � � _ �, � x 1 IF"', i Ea4Iside �Ow/IMavJTf e. , _ z las Beach ";' fi TT Z? Z as v y.,,- ;'l.Ong::BeaCh�� a'e. � r x, �t •' o' � __ `' .. � -2T � Picsx�aa h� Faetraven E " t<'^"=r; E , I�tbWlFwy x Po tale Park xa � ��'Sham �7 ,✓f °� � s a `"� �' a� a +� €€ � � �' f ' q rb,alwe� � � ' Santa Ana 7ustm v r y a e Ever een f s s r8:;, r; "a•�,, .x y �; r <t,, k % r �„ '. y .n.,:,,• rd„ - i Pha x� _ �x •Co OP ' w.s, " ,xa 4 H tt c inn gC� rll x� „SY x FO �(1 4 Rasewaed Deks x rrl� Bak .A^ :� yrr l: if. e� �y ,✓ rust, tiePubkc?< Qi7^T '""' 6� ..> ,� �',,�` z '',+ .'` a g \��a k r }<'rt 3': d t#ama ''g /'/ t i yy t' ss,M � 5d "aE $arp'.iPdr1SQ v�' ,`�t � € xt� � r" ��gpJ•.,r°. �� s T \ � '`r\ �'�IS�Re�, y �'� � x ,� x f �'a t9r,�'� �.- i s ,,: R' s. � �:, y.yft73 �', f9U�tc'I9 ' 1jori \ r tra Joan Y4t e - �u ."�' x'/• •`�'h,:�.' �A;✓-.: yE s c�,-- � ,..',t sx3r�,s-:� r :<�: -;� x 1 y xs• ,s.. �i., x � , �� ` `;z sport .,;� �;, �,�,��'. n ./��s r`�� rc �" ��.y z•��am �s. A.� ��;',: .. �, k"vkre Say *'r±Fe g\� a• t^' V f M �' �lj r s Y'y x �� •x�'s wka\ ras ,yc� R,�� .a,., ' yy � ,f' �e a<* x a T r ..,,,..- ,,;' 't y;, ,. ''€✓" �.,:: ��. /yii"" 'fir� v�/y': i, �t�i'�? ,'. ,N.�K Ham..r,'mw;F � �`x.,•. n:'r r )3,�r •'i,a vt��,.w �� r:�,Y,,a,r �r'� % es ear. `� �.,. %t'. �` ' r? ;� ri,<,a �, v„ �fireM ,� �a, x^�;+��+ ✓ s�;;xr xDiBC38Ch'� "; � ,Caasr� �:s�" .<� x 'f�� BaPbda J a y� nw a / islastd Corona ¢NowPM r �.'� �',// y,y)`. `y: s' s// °y ✓ �.,w es F aJ ra �• `.� OelMar „ Ckrb EXECUTIVE SU OPPORTUNITIES 2 . Grocery epees: ■ based on our grocery/drug store demand analysis: � Viable support for an additional specialty grocery store of about 25,000 — 30,000 W square feet, as well another of 30,000 square w . .feet Takes into account planned Costco and opening of Whole Foods N ; CD 3 N EXECUTIVE SUMMARY N OPPORTUNITIES 3 . Mixed-use residential : ® City has limited residentially-zoned acreage to take advantage of it's excellent housing appeal; ® Future housing opportunities will require recycling; ® Less than 40 of City's housing stock is occupied by i renters opportunity to build for-rent units especially near urban amenities City's favorable housing appeal should attract relatively affluent, ,� young singles and couples, and others seeking a rental lifestyle EXECUTIVE SUMMARY OPPORTUNITIES 4. Conversion of selected Southerntr Industrial sites (Warner to Ellis) : Structural defects provide excellent opportunity to convert parcels to residential development ® Large parcel sites across from or near to H CO Central Park are prime candidates ® New housing would bring more residents thus increasing retail demand and the sales tax base ;a CD I N GJ 3 N EXECUTIVE UMMA Y OPPORTUNITIES 5 � Edinger Blvd limited service hotel : ■ City's 405 Beach Blvd off-ramp, and future retail plans along Edinger, are appealing traits for a limited service hotel W ' Such a hotel does not have attached full-service restaurants, thus operators want to secure location near shopping and dining ■ Hotel guests are generally car-oriented; hotel operator desires a freeway close site EXECUTIVESUMMARY OPPORTUNITIES 6 . Waterfront Hilton expansion : Proposing a 150-room all-suite addition that would include ballroom/meeting space, a pool, and new restaurant/spa W ■ Current hotel occupancy rates are depressed but should begin to recover CD CJi CD N EXECUTIVE SUMMARY OPPORTUNITIES 7 . Another PCH hotel : ■ Hotel occupancy levels need to reach pre- recession levels ( low 70% occupancy) before a new hotel is considered . W w EXECUTIVE SU A THREATS ■ The City's most critical "threats" or constraints to its long-term development are: 1 . Private sector financial and legal obstacles; w 20 Competition from neighboring cities; and V 3 . Maturation of the City' , limiting growth . N v 3 N EXECUTIVE SUMMARY THREATS 1 . Private sector obstacles: ■ Excessive debt, bankruptcy, or other financial troubles Long-term lease obligations of existing W tenants w ■ Unrealistic demands by prospective tenants ■ Lease restrictions, such as use clauses r EXECUTIVE SUMMARY THREATS 2 . Neighboring City Competition : ■ Big-box candidates have alternative choices ■ In tough economic times, retailers most interested in cities that "welcome" W businesses W ■ Long governmental processes with many perceived bureaucratic hurdles are detractors N 0 EXECUTIVE SUMM THREATS 3 . Maturation of the City: Future increases in resident-serving retail demand will be minimal Retail growth follows residential A � Minimal residential growth planned 0 ■ Modest growth in retail sales tax revenues will track to inflation ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Stetos . Convert City Procedures into a "Business Friendly" Process 0 Review current administrative procedures and W prepare draft revisions A ■ Meet with all affected City departments to reach consensus on revised administrative procedures ■ Obtain City Council approval of recommended revised administrative procedures w CD N ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Steps . Expedite Big-Box Retail Openings on Edinger 0 Assist in re-tenanting, redeveloping former Expo Design Center Site 0 Assist in re-tenanting, redeveloping former W Albertson's Site 0 Develop new Costco at Bella Terra ■ Complete Phase I development at Michael's Center ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Actin Steps 3 . Facilitate Major Mixed-Use Projects on Edinger Develop retail pads at Bella Terra Redevelop former Levitz site W ■ Develop residential/retail at Bella Terra ■ Develop Amstar Red Oak CD W CD A ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Steps 4. Conclude Development Agreement for Limited Service Business Hotel on Edinger 0 Finalize 120-room limited services hotel agreement W A 0 A Construct/open hotel ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Actin Steps 5 . Renovate Prime Projects on Beach Boulevard • Redevelop Beach Promenade Shopping Center • Redevelop Decron Properties Corporation W ( mixed-use) ■ Redevelop Town & Country Center ( mixed-use) CD ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Steal 6 . Expand Ability of Selected Southern Gothard Industrial Sites to Allow Residential ■ Conduct land planning analysis W Initiate Specific Plan process, if warranted 0 Obtain Specific Plan approvals ■ Commence discussions with potential developers Initiate residential development ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Steps 7 . Promote Tourism Hotels on Pacific Coast Highway ° Promote off-peak events to fill Citys hotel rooms W ■ Facilitate waterfront Hilton Hotel expansion ■ Assist marketing efforts to raise City"s hotel occupancy to 70%+ Facilitate new hotel openings ( Pacific City) w CD co co ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Steps 8 . Assemble Downtown Small lots • Assist in re-tenanting vacant stores • Obtain approval of DTSP from Coastal W Commission Work with multiple vacant lot owners • Encourage viable upgrading/renovation/reuse plans for mixed-use ( residential/commercial ) ECONOMIC DEVELOPMENT STRATEGIC PLAN Recommended Action Steps 9 . Be Receptive to New Opportunities ■ Monitor trends in Economic Development of retail/office/ industrial properties ■ Maintain contact with property owners regarding A opportunities and threats for and against positive land development/redevelopment ■ Be agile and decisive when presented with opportunities for development, redevelopment and relocation of new businesses within the City CD ca CD 3 ECONOMIC DEVELOPMENT STRATEGIC PLAN Huntington Beach, California Economic Development Strategic Plan Proposed Five-Year Action Plan i ; d ANTICIPATED INCREMENTAL PR0Mgrk RECEIPT OF FISCAL BENEFIT FISCAL'BENEFIT ,. W r 2d14 f 2411_ 2d12 2015 '2d14 2415 Expedite big box retail openings on Property Taxes I Edinger Boulevard. Retail Sales Taxes411 Facilitate major mixed-use projects Property Taxes , Edinger Boulevard. Retail Sales TaxesAV = Conclude Limited Service Hotel on Property Taxes Edinger Boulevard. Transient Occupancy ,' " Renovate prime projects on Beach Property Taxes Boulevard(Beach&Warner; Beach& Retail Sales Taxes �Y F Ellis; Beach &Atlanta). I .<. Expand selected Gothard Industrial Property Taxes sites to allow residential Retail Sales Taxes d; development. - Promote tourism hotels on the beach Property Taxes r„� a to increase overnight visitor spending Retail Sales Taxes in City. Transient Occupancy Zr C3NGOING Assemble small lots in Downtown Property Taxes Area to allow large lot Retail Sales Taxes PRG#E71? j OR INS,