DATE: December 1, 2015
TO: Mayor and City Council
FROM: City Manager
SUBJECT
Title
Economic Development Strategic Plan Annual Update (2014-2015)
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RECOMMENDATION
Recommendation
That Council reads and accepts this report.
Body
SUMMARY
In 2013, the City of Hayward adopted an Economic Development Strategic Plan (EDSP) in order to create a purposeful and concentrated effort to further establish Hayward as a desirable place to conduct business and to grow the City’s economic base. The EDSP has three focus areas: 1) Branding and Marketing; 2) Industrial Sector; and 3) Service and Retail Sector. Staff has been working toward completion of tasks as outlined in the EDSP focusing on foundational tasks, which include establishment of baseline data, identifying retail and industrial lands, and launching of the branding and marketing program. With the start of a new Economic Development team in September of 2014, significant time and effort has been dedicated to understanding Hayward’s business community in order to design and implement business retention, attraction, and expansion programs. The following report provides a summary of key activities through September 2015.
DISCUSSION
The primary focus of the Economic Development Department during the past year was the creation and establishment of foundational data, which included the Industrial Baseline Corridor Study and its counterpart, the Retail Baseline study. The foundational data was the key starting point for documenting existing conditions and establishing program targeted metrics and reporting procedures. Establishing a mechanism to track the economic trends in the industrial and retail corridors provides information for program development and resource allocation. By understanding the types of businesses that are in Hayward, the number of workers they employ, how businesses are performing and how their operation contributes to the City’s economic vitality, the City can now direct economic development resources to targeted sectors, geographical areas, and programs. This data-driven decision-making helps maximize the impact of the City’s business attraction, retention, and expansion efforts.
The ability to obtain and analyze critical data has been a key deliverable. The information generated by staff has guided decisions and strategic approaches across multiple departments from land use and development to public works and transportation projects. The baseline data gives the City a better understanding of the businesses it supports and areas to target as the organization, as a whole, works toward implementation of the EDSP.
The remainder of this report provides a summary of key accomplishments related to the four major primary focus areas of the EDSP:
1. Branding and Marketing
2. Industrial Sector
3. Retail Sector
4. Program and Data Development
1. Branding and Marketing:
The EDSP recognized the City’s fractured brand and called for the focused assessment and the development of a cohesive, distinctive identity that can be effectively communicated to market the City to businesses, developers, residents, and travelers. Pursuant to the objectives set forth in the EDSP, the City contracted with Brainchild Creative, an award-winning, local firm deeply experienced in the area of complex branding initiatives to carry out the assessment and subsequent creative development, including key messages, graphic standards, and a prototypical marketing plan designed to demonstrate cost effective ways to extend the reach and penetration of the City’s messaging.
The City and consultant team have been working with both quantitative and qualitative information in order to formulate a branding and marketing approach for Hayward. With quality information, the Marketing and Branding efforts has targeted messaging that identifies and showcases Hayward’s strengths and opportunities. Key messaging includes the quality and quantity of industrial businesses in the Advanced Industries sector, competitive advantages of access to workforce talent, and transportation infrastructure. Through the combined efforts of the Community and Media Relations Officer, Economic Development staff, and consultants, the “Hayward Opportunity” marketing material was created giving the City valuable tools to outreach opportunities. In addition, program development efforts highlighted by the Business Concierge Program were given high quality designs and packaged as part of the City’s marketing campaign. Lastly, a new Economic Development website (www.haywardupward.com <http://www.haywardupward.com>) was launched, which gave the City a modern, graphically-charged interface to engage potential developers and businesses interested in Hayward.
Branding and marketing efforts also included working to strengthen and expand community events for enhanced opportunities for residents and visitors to engage with Hayward businesses. Key Economic Development events included: Shop Hayward; Light Up the Season; Passeio do Vinho art & wine walk; 2015 Business Appreciation at Stonebrae; and formulation of new events such as the Rubik’s Rumble.
2. Industrial Sector
In support of developing information for completion of foundational tasks identified in the EDSP, staff conducted research to develop a baseline profile of businesses in Hayward’s industrial corridor. Specifically, this effort set out to achieve the following objectives:
1) Establish a clear picture of the businesses located in Hayward’s industrial zoned area;
2) Create a database to identify major employers and track establishment and employment trends; and
3) Apply the data using a graphic information system (GIS) to assess the existence of industry clusters, which for the purposes of this study is defined as similar businesses located near one another.
This research represents the completion of multiple work tasks outlined in the EDSP. Specifically, the EDSP calls out establishment of baseline measures and monitoring of the Top 25 industrial employers (EDSP Performance Measure IS1.1) and overall employment levels of industrial businesses (EDSP Performance Measure IS1.5).
The industrial baseline information is pertinent to other long-term strategic approaches specifically the City’s General Plan Implementation Program on development of an Industrial Technology and Innovation Corridor Plan. By understanding the types and profiles of our existing businesses and conducting outreach on specific business needs, we can now craft policies and regulations to attract targeted industries and further develop industrial lands in a comprehensive manner addressing both economic vitality and land use concerns.
By sorting through layers of data, the City has six primary industrial business types which are identified below:
1) Advanced Materials
2) Biomedical, Biotechnical and Life Sciences (Biotech)
3) Business and Financial Services
4) Food and Beverage Manufacturing
5) Information Technology and Telecommunications
6) Transportation and Logistics
As previously reported to Council, the six categories represent a valuable mix of businesses ranging in size from 10 to 750 employees. The ability to identify and outreach to specific business types and individual businesses is a valuable tool for business retention, attraction, and expansion. Based on business patterns, there are no specific patterns associated with Hayward’s Industrial sector. The City’s current and previous land use regulations have allowed a diverse mix of industrial uses to locate throughout the Industrial corridor. Given the collection of this information on existing businesses, the City now has an opportunity to further study any necessary modifications to our land use regulations for desired land uses and potential land use conflicts as the industrial zone abuts residential uses. Hayward’s industrial market is comprised of 36.6 million square feet with a vacancy rate of 4.3%. Overall our industrial market is performing very well; however, with a 4.3% vacancy rate, there is limited inventory to expand within.
The most significant staff finding of the baseline data is that an overarching business category connects our industrial businesses known as the “Advanced Industries” sector. Advanced Industries is comprised of over fifty different industries that involve heavy investment in technology innovation and employ skilled technical workers who develop and apply new technologies to enhance productivity. This sector is gaining national focus due to recent studies about its importance and impact on the American economy and workforce. The City is now focusing efforts and is targeting efforts to retain, expand, and attract Advanced Industries.
3. Retail Sector
Similar to the efforts in the Industrial Sector, staff has conducted research to develop a baseline profile of retail development along the retail corridors in Hayward. Specifically, this effort set out to achieve the following objectives:
1) Confirm retail business corridors located in Hayward;
2) Create a profile snapshot of retail condition, highlighted by anchor retailers and demographic information; and
3) Identify potential locations for retail development or redevelopment.
Hayward’s retail market is comprised of 7.7 million square feet with a vacancy rate of 3%. Overall, the Hayward retail market is performing well; there is limited inventory to expand within and no available class “A” retail space. Downtown continues to fill vacant storefronts; however, portions of B Street continue to remain empty. The majority of the retail space in Hayward is older commercial strip centers with limited vacancies.
Moving forward, staff will continue to look at development and redevelopment opportunities for retail space and develop programs to assist tenanting retail space within the downtown and all retail corridors.
4. Process Improvements & Program Development
In addition to making progress in the three core EDSP focus areas outlined above, over the past year, Economic Development staff, in collaboration with multiple departments, worked on developing a better understanding of the City’s internal processes and capacity. Together, we worked to create programs and procedures to achieve the following:
1) Provide enhanced customer service;
2) Support consistent business-friendly messaging;
3) Improve and refine the process for streamlining delivery of projects and permits; and
4) Offer a broader range of services designed to help attract, retain and expand targeted industries.
ED staff developed and implemented the “Business Concierge Program” to meet these objectives. This customer service driven program incorporates efforts from all City departments, establishes a single-point of contact to help businesses find solutions to their priority questions; and makes development and permitting processes predictable and streamlined. From site selection, development assistance, and workforce development, the program addresses all the EDSP’s business attraction, retention and expansion work tasks.
Most importantly, the Business Concierge Program gives staff the ability to work within the City to identify project issues in a timely manner, which allows the development and business community to make informed decisions. Starting from staff concept reviews and pre-application meetings, to Council Economic Development Committee (CEDC) and Council Concept Review Workshops, the development and business community have embraced the City’s approach. Staff’s ability to be nimble and assemble appropriate City staff to meet in short notice and address development issues continues to receive compliments and improves the reputation of the City of Hayward within the development and business community.
To measure performance and progress toward achieving EDSP goals and objectives, Economic Development staff established an internal database to track activities. This database allows all staff to monitor any given project and to document results. Highlights of work activities for a twelve-month period starting from September 2014 to September 2015 are as follows:
• Total Businesses Assisted: 123
• Total Businesses Attracted: 20
• Total Jobs Created: 164
• Total Businesses Visited: 67
• Total Building Permit Valuation: $9,350,455
• Total Land Purchase Value: $21,390,000
Examples of businesses attracted/assisted include:
• Oven Fresh Bakery, a 50-year old commercial bakery
• Casa Sanchez Foods, a gourmet tortilla chip and salsa manufacturer
• Dunn Edwards, a national retailer of paint and supplies
• Meridian Aviation, a nationally-recognized charter airline operation
• Belmont Wines, importer and retailer of high-value and rare wines
• Shea Properties, a developer of light manufacturing and flexible space industrial business parks
• SinoEV, an electric battery research and development businesses
• Minted.com, an online retailer of crowdsourced art and home furnishing
The upward movement of the economy coupled with the proactive efforts of the City continues to generate positive economic activity. The above data will serve as a baseline. Staff will continue to track activities and measure performance towards the goals of the EDSP from this point forward. In addition, staff will be evaluating the goals and objectives of the strategic plan and recrafting these as necessary to meet changing conditions in the community, with input and approval from the CEDC and the Council.
NEXT STEPS
With the increased development activity, staff has been pushing the City Marketing and Branding program out to the development and brokerage community. Staff will start targeted specific industry events where we can have direct connections with businesses looking to expand. For the Industrial sector, staff will look at the ability to assist industrial businesses, in particular Advanced Industries, to locate and expand in the City and look to help develop new Industrial/Flex space to meet modern space demands of Advanced Industries. For the retail sector, staff will continue to assist in filling vacant storefronts and push for new development to provide goods and services for the City and develop assistance programs to tenant vacancies within the retail corridors and downtown.
Prepared by: Micah Hinkle, Economic Development Manager
Staff contact
Recommended by: Kelly McAdoo, Assistant City Manager
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Approved by:
Fran David, City Manager