HomeMy WebLinkAbout1996-12-03; City Council; 13940; Report on Phase II of the Childcare StudyX& Q va
CITY OF CARLSBAD -AGENDA BILL a 1 I
AB# 13,9 q r3 TITLE: STUDY AND REQUEST TO PROCEED TO MTG. 1a-3-962
DEPT. HD. L REPORT ON PHASE II OF THE CHILDCARE i
CITY MGR. 2
CITY ATTY. - ( PHASE 111
DEPT. ED
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RECOMMENDED ACTION:
Accept Phase II of the Child Care Study and authorize staff to proceed to Phase !I!, which a,
include a recommendation of land use standards associated with child care uses in the ind
zones.
ITEM EXPLANATION:
In January 1996, Council directed staff to prepare a three-phased study that would examin1
impacts of locating child care facilities in industrial zones. The consulting firm of David J.
and Associates (DJP), in association with Environ and Gruen Gruen + Associates, was eng
conduct the first two phases. Phase I included an assessment of the health and safety risk
to child care in industrial areas, and a recommendation of potential mitigation measures.
On August 13, 1996, the City Council accepted the Phase I report prepared by DIP and En
Based upon the consultant’s findings, Fire Department staff agreed that potential health rid
be mitigated under the following conditions:
I. If the child care facility is operated by a company to serve on-site employees only;
2. If the child care facility is located at least 1,000 feet (or more) from the site boundaries,
owners of all properties within 1,000 feet of the proposed child care facility agree not t
acutely hazardous materials or other materials with potential off-site impacts;
3. If the sponsoring. company legally agrees to not use acutely hazardous materials or oth(
substances likely to endanger children within 1,000 feet of the child care facility:
4. If the owner of the child care facility installs an emergency plan that determines all chi1
can be safely evacuated from the child care facility within five minutes, and agrees to c
quarterly evacuation drills in support of the plan; and
5. If the owner of the child care facility agrees to inform clients who use the on-site child (
services of the elevated risk associated with the surrounding industrial environment.
The primary purpose of Phase II of the Child Care Study was to evaluate the real and percel
economic impacts of siting a child care facility in the industrial areas under the conditions
highlighted in Phase I, and provide a recommendation to the City Council. DJP teamed wi
Gruen Gruen + Associates, an economic consulting firm, for Phase II of the child care stud
important to note that since Carlsbad has no child care facilities located in it’s industrial arc
much of the information collected in Phase II is based on professional opinion.
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Page Two of Agenda Bill No. 13: 9 (d 0
The Phase I1 study focused on three areas of economic concern; insurance impacts to loca
industry, economic impacts to property values, and impacts to business. The methods for
obtaining information in these areas consisted of 1)interviews with insurance brokers and
management advisors, 2) interviews with real estate brokers, property managers, develope1
a child care facility operator located in a business park, and 3) a survey consisting of a san
Carlsbad’s existing companies, in industries the City targets for relocation and expansion.
Gruen + Associates developed questions and conducted interviews for items 1 and 2. ltel
survey, was developed and conducted by City staff, and the data then submitted and anal)
Gruen Gruen + Associates.
The following represents the key conclusions and findings of Phase II:
Insurance Impacts:
1. Actual insurance premiums depend on a host of factors including: the type and size of
business, size of the property, proximity to childcare, the underwriter, nature of the ch
program, etc.. .
2. Companies involved in manufacturing are more likely to be affected by higher premiur
to the nature of their business .
3. Smaller businesses and property owners will be more adversely impacted by higher ins
premiums than larger businesses.
4. The greatest insurance impacts would be experienced by child care providers locating t
industrial activities.
5. Requiring a 1000 foot buffer between a child care facility and industrial activity, where
hazardous materials and chemicals are used, would reduce the impact of increased inst
costs.
Property Value Impacts:
1. Proximity to child care facilities is generally not considered a key factor in a company’s
decision to relocate or expand, therefore companies are not inclined to pay more in ret
building space or for the purchase of land.
2. Proximity to child care facilities may be perceived as an amenity by employees, and c
help a company attract and retain its labor force.
3. A setback buffer which restricts the use of hazardous materials/chemicals within a certa
distance of a child care facility, would adversely impact an owner’s ability to market thc
property, by reducing the number of possible tenants. Fewer prospective tenants or Ian
purchasers could result in a decrease in local demand and thus a devaluation of proper
values and/or rents.
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Page Three of Agenda Bill No. qD
Business Impacts:
1. In general, most (72%) companies surveyed would support the concept of locating a ch
facility within 1000 ft. of their facility, even if there were restrictions on the use of haza
materials and chemicals.
2. Approximately 16% of the companies which would not support a child care facility th;
restricted the use of their property, were categorized as manufacturers.
3. Companies tend to have a greater level of support for child care facilities available for L
their employees.
4. A majority of the companies surveyed (56%) indicated they would not purchase a build
that had a use restriction on hazardous materials or chemicals. Approximately 78% of
who responded that they would not purchase a building were categorized as manufactL
bio-industrial and electronics firms. Reasons given by the firms included that such a
restriction would unduly restrict their business operations now; or might do so in the ful
should their manufacturing processes change; or it might make it difficult to market the
building to future users.
5. Smaller firms (less than 100 employees) are less likely to purchase a building with a use
restriction than firms which employ a greater number of employees.
6. Many of the companies surveyed (69’/0), indicated they would consider leasing a buildit
which had a use restriction.
7. When asked whether or not the company would support an ordinance requiring a child
facility to obtain their legal permission to locate within 1000 feet of their facility, over 8
indicated they would support such an ordinance. Three of the four companies who opp
the idea of voluntary compliance were in the computer related and medidcommunicatic
fields.
8. When asked whether they felt that child care facilities are an appropriate use in the indu
areas, over 84% responded that they were appropriate.
The conclusion of the consultant, Cruen Cruen + Associates is .that “a child care ordinance
requires owners and their tenants, or owner occupants to commit to a legally binding restric
prohibiting the use of hazardous chemicals within a 1,000 foot radius of a child care facility
would likely have negative economic impacts for owners and tenants. These negative impa
would likely include a reduction in land values and obtainable rents, higher insurance costs
industrial businesses near child care facilities as well as other economic impacts associated 3
limitation on the type of companies that could be attracted or retained as users of land withi
1,000 foot buffer.”
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Although staff concurs with the findings of Gruen Gruen + Associates, the report indicates
significant level of support for permitting child care in the industrial areas. The primary co
of tenants and owner occupants which do not support child care, is related to the impact o
current or future operations. The primary concern for building and land owners and their
representatives, is the marketability of properties which have a use restriction imposed on .
If the City Council elects to proceed to Phase Ill of the Child care study, staff recommends
any future ordinance(s) or land use provisions to permit child care in the industrial areas bt
developed in such a way as to eliminate or minimize negative economic impacts. Particul
those associated with imposing a 1,000 foot radius use restriction on acutely hazardous ch
or material usage.
ENVIRONMENTAL IMPACTS:
This analysis is considered exempt from CEQA review per Section 15306, since it qualifies
study to gather information leading to an action not yet approved, adopted or funded. Full
environmental review will be conducted upon the child care ordinance prior to public hea
FISCAL IMPACT:
The fiscal impacts for both Phase I and Phase II of the DJP contract totals $45,415.00. The
funds were allocated from the Council contingency funds in January 1996. Phase I1 of the
Care Study represents $8,450.00 of that total amount. If the Council accepts the
recommendations in Phase 11, the study can proceed to Phase Ill. Phase Ill will be conduct
house by existing planning department staff. No costs other than those associated with sta
are anticipated.
EXHIBITS:
1. DJPKruen Gruen + Associates Economic Impact Assessment
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AN ASSESSMENT OF THE ECONOMIC IMPACTS OF
IN INDUSTRIAL AREAS
LOCATING CHILD-CARE FACILITIES
A Report to
The City of Carlsbad (CA)
from
GRUEN GRUEN + ASSOCIATES
Economists and Market Analysts
In Association With
David J. Powers & Associates, Inc.
C895 @ November 1996
Gruen Gruen + Associates
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AN ASSESSMENT OF THE ECONOMIC IMPACTS OF
IN INDUSTRIAL AREAS
LOCATING CHILD-CARE FACILITIES
A Report to
The City of Carlsbad (CA)
from
GRUEN GRUEN + ASSOCIATES
Economists and Market Analysts
In Association With
David J. Powers & Associates, Inc.
C895
November 1996
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0 1996 Gruen Gruen + Associates. Do not reproduce without written permission from Gruen Gruen + Associates
Gruen Gruen + Associates
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TABLE OF CONTENTS Page
INTRODUCTION ......................................................... 1
SECTION I: INTERVIEWS WITH INSURANCE BROKERS AND RISK
MANAGEMENT ADVISORS ............................................... 1
Explanation of Variables That Influence Insurance Costs ...................... 2
Summary of Anticipated Changes to Insurance Costs for Child-Care
Providers and Nearby Industrial Users ..................................... 3
SECTION II: INTERVIEWS WITH REAL ESTATE BROKERS. PROPERTY
MANAGERS AND DEVELOPERS .......................................... 4
Summary of Results of Interviews:
Provision of Child-Care Facilities Not Part of Site Location Criteria ............ 4
Few Industrial Projects Contain Child-Care Facilities ....................... 5
Evaluation of Interviews:
The Provision of Child-Care Facilities Does Not Produce Higher
Rents. Land Values or Faster Absorption ............................... 6
Likely Rent and Value Effects of Child-Care With and Without 1.00 0-Foot
Radius Buffer Requirement .......................................... 7
SECTION 111: TELEPHONE SURVEY OF BUSINESSES IN CARLSBAD ........... 9
Introduction to Survey ................................................... 9
Summary and Analysis of Survey Results .................................. 9
Discussion ............................................................ 22
APPENDIX A: SOURCES CONSULTED ..................................... 24
APPENDIX 6: TELEPHONE INTERVIEW GUIDE .............................. 25
APPENDIX C: CITY OF CARLSBAD SURVEY ................................ 27
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INTRODUCTION
The City of Carlsbad has tieen developing a Child Care Ordinance intended to address the
provision of child-care services in all areas of the City. David J. Powers & Associates, Inc.
in association with Environ and Gwen Gruen + Associates completed an evaluation of public
and health and safety issues related to locating child-care facilities within industrial areas in
Carlsbad. The Phase I study also addressed the relative level of risk in commercial areas
and changes in child-care supply in Carlsbad since the 1991 Child Care Needs Assessment.
This Phase II report summarizes an assessment Gruen Gruen + Associates (GG+A)
completed in association with David J. Powers & Associates, Inc. of the potential economic
impacts of locating child-care facilities near industrial activities on industrial propertyhser
insurance costs. The results of our interviews with insurance brokers and risk management
advisors are discussed in the first section following this introduction.
The assessment also focused on identifying the likely effect of locating child-care facilities
on rents and land values of industrial properties. To assess such effects, we conducted
interviews with real estate brokers, property managers, developers and an operator of a
child-care facility in a business park. The second section contains a summary of the results
of the interviews. We synthesize the interview results to make conclusions about the likely
effects on rents, land values and absorption associated with the provision of child-care
facilities.
The City of Carlsbad Community Development Department conducted a telephone survey
of a sample of businesses located in industrial areas in Carlsbad. GG+A coded and
analyzed the results of the survey. The third section following this introduction presents a
summary and analysis of the results of the survey. This section includes a discussion of the
primary conclusions suggested by the results of the survey of businesses and interviews with
real estate brokers, property managers and developers.
INTERVIEWS WITH INSURANCE BROKERS
AND RISK MANAGEMENT ADVISORS
This section summarizes the results of our interviews with insurance brokers and a director @ ?
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of risk management for a major real estate advisor for pension funds concerning the potential
effect on insurance costs of locating child-care facilities near industrial facilities.
Appendix A identifies the interview sources.
Explanation of Variables That influence Insurance Costs
Overwhelming consensus exists on the part of those we interviewed that actual insurance
premium costs will depend upon a host of factors, including:
e the specific type of business;
e size of business;
e particular underwriter;
e size of property;
e land uses (i.e., heavy industry, light industrial, etc.);
e nature of precautions taken to protect children from a variety of hazards;
e nature of particular child-care program in terms of hours, age of children, whether
operated by employer-sponsor for benefit of employees only, or by third-patty
operator with child care open to all workers; and
e distance between child-care facility and industrial facility.
As a general proposition, insurance premiums for businesses that have manufacturing
processes more likely to entail risks of fire, explosion, emission of lead or other air-born
toxins, or spills of hazardous chemicals will tend to be more significantly affected by the
location of child-care facilities near their activities than businesses whose operations do not
entail such risks.
Another general proposition is that the smaller the business or property owner, the more
likely insurance costs will be affected adversely.
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The particular underwriter can significantly influence insurance costs. Some underwriters
do not focus on adjacent or nearby uses. Other insurance companies do, and might raise
the costs of insurance or choose not to provide insurance in light of proximate activities. It
is likely that insurance providers are becoming increasingly concerned about the presence
of child-care facilities in cornrnerciallindustrial areas. At least one insurance provider has
added a separate form to be completed by underwriters with respect to child-care facilities
in business parks.
Summary of Anticipated Changes to Insurance Costs
for Childcare Providers and Nearby Industrial Users
Those with whom we spoke indicated strong concurrence that the actual child-care facility
operator's insurance premiums would be most significantly effected by locating near
industrial activities. In most cases, the insurance costs would be expected to increase,
irrespective of whether the child-care operator was a third-party or employer-sponsored, on-
site operation. One interviewer stated that if the child-care facility is employer-sponsored,
the cost increase impacts may be negligible because the underwriter may feel the employer
has more control over the facility. As noted above, however, the use and size of the
employer will bear significantly on insurance costs. For example, the same respondent cited
a firm that manufacturers oil products, which involve pollutants and risk of plant explosions,
might have insurance costs that are twice as high as a candy manufacturer who sponsors
on-site child care. The latter user's costs could be comparable to insurance costs incurred
by a Kindercare or other child-care provider.
The respondents also completely concurred that all other factors equal, a use restriction that
places a 1,000-foot buffer between the child-care facility and industrial activity would reduce
the insurance costs associated with child-care facilities locating near industrial activities. In
the absence of a buffer, costs would be higher. There was a general concurrence, however,
that even with such a buffer it would not be unreasonable for adjacent industrial users to
anticipate a five percent to ten percent cost increase associated with locating child-care
facilities near industrial activities. One respondent felt that insurance costs could rise twenty
percent or higher.
Those we interviewed all pointed out that should an incident occur, oremiums would
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substantially increase. Rates would increase even in the absence of a showing of
negligence. There is also a longer liability period as to children. Children may defer litigation
until they reach the age of majority while adults are typically limited to pursuing legal
remedies within two years of an incident, giving rise to damages. Finally, several
respondenfs pointed out the relative lack of child care facilities in industrial areas, and the
absence of litigation concerning accidents in these settings. Because of this, the impact of
nearby child-care facilities on insurance costs of businesses or property owners in industrial
areas has not been well defined.
INTERVIEWS WITH REAL ESTATE BROKERS,
PROPERTY MANAGERS AND DEVELOPERS
As part of the assessment of the potential economic impacts of locating child-care facilities
in industrial areas, Gruen Gruen + Associates (GG+A) conducted telephone interviews with
local real estate brokers, property managers and developers. We also spoke with the owner/
director of a child-care center located in a business park. These interviews were directed
toward identifying whether industrial properties with or near child-care facilities obtain, or
would likely obtain, higher rents, faster absorption or higher occupancy rates than
comparable industrial properties/locations without child-care facilities. We consider the
results of these interviews to identify the likely effect nearby child-care facilities would have
on rents and land values in industrial areas.
Appendix A lists the individuals interviewed. A copy of the telephone interview guide is
included as Appendix B.
Summary of Results of Interviews
Provision of Child-Care Facilities Not Part of Site Location Criteria
None of the real estate brokers, propetty managers or developers with whom we spoke knew
of any industrial users who include the provision of child-care facilities near their properties
in their site location criteria. Other factors such as availability of infrastructure, accessibility
to transportation linkages, land or rental costs, taxes, spacial considerations, and ability to @ 4
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expand, are examples of factors on which industrial users base their location decisions.
Two respondents, however, indicated that they were aware that at least one local
manufacturing company had an interest in making child care available to their employees.
These respondents felt that some large corporate users with research and development
operations might have interest in the provision of child care, if this would help attract critical
labor. These uses, however, tend to be more office-oriented than industrial.
Few Industrial Projects Contain Child-Care Facilities
None of the individuals with whom we spoke could identify any industrial parks in the broader
Carlsbad market that contain child-care facilities. Zoning restrictions as well as a preference
for child-care closer to home, as opposed to work locations, were two reasons given for the
relative lack of child-care facilities in industrial areas. The director of the child-care center
with whom we spoke indicated that industrial activities that employ primarily male workers
tend not to generate demand for child-care. The child-care center director also indicated that
frequently, factory workers were unable to afford third-party child care.
Two respondents identified Oak Ridge Park in Vista as containing a child-care center. One
individual indicated that the Oak Ridge Park is primarily office-oriented and has not
performed particularly well. We spoke with a representative of the project and the director
of the child-care center, who is referenced in the preceding paragraph. They confirmed that
the Park contains primarily office and research and development facilities. The center is
near the managementlleasing office, and two small computer software and service concerns
and the office of a landscaping company. The child-care center is about a block away from
other tenants. The child-care director indicated that two tenants, a printing company and a
small computer orders company, came to the Park because of the availability of child-care.
Given the Park is reported to contain 600-acres and average daily attendance of 32 to 50
children at the child-care center (including children from residential areas near the Park), it
does not appear that the child-care center is a key attracting factor.
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Evaluation of Interviews
The Provision of Childcare Facilities Does Not
Produce Hinher Rents, Land Values or Faster Absorption
Strong consensus exists on the part of those with whom we spoke that in most
circumstances, industrial users do not pay, and would not be likely to pay more in rent for
building space or for the purchase of land to have access to child-care facilities than would
be the case in the absence of child-care facilities.
One broker suggested that the exception may include larger golf-related companies whose
labor force includes a high proportion of females. The broker, however, indicated that even
in this case, such users would only be likely to pay “somewhat more”.
While several respondents felt the provision of child-care facilities would have no bearing on
either rents or absorption because of the lack of demand for child-care near workplaces, a
few respondents indicated that the availability of child-care as part of an overall amenity
package, might contribute to achieving a faster absorption rate. Several characterized the
availability of child-care as “one more selling point.” In and of itself, none of the respondents
indicated that the provision of child-care facilities would prOdUGe faster absorption or higher
occupancy rates than would occur in the absence of child-care facilities.
One respondent developed and now manages a business park in Oceanside. A child-care
center is located within the park. He indicated that only a 150,000-square-foot building has
been constructed in the business park in the last five years and that most tenants tend to
rent less than 10,000 square feet of space. The park appeals to price-sensitive users.
These tenants tend to be back-office operations such as a loan collection processing center
or light industriaVassembly such as a manufacturer of chip boards and a bakery. No “heavy
industrial” tenants are located at the property. He believes that the availability of child-care
has not resulted in higher obtainable rents or land values. While none of the park’s tenants
made the decision to locate at the park because of the child-care facility, the child-care
center is perceived as an attractive amenity. The developerhanager noted that large,
“deeppocketed” companies frequently do not want child-care on site because of concerns
about potential liability and adverse publicity in the event of accidents, but that some of these
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same companies may desire third-party, off-site child care available to their workers.
Likely Rent and Value Effects of Child-Care With
and Without Use Restriction (1,000-Foot Radius Buffer Requirementi
The respondents generally concurred that in the absence of setback buffer requirements, the
provision of child-care facilities would not aversely impact industrial space rents and land
values. To the extent demand exists for child-care, the provision of child-care facilities might
enhance rents or land values. This conclusion, however, reflects an underlying assumption
that the companies located near child-care facilities would not be users of hazardous
materials, and not have added regulatory compliance burdens or potential increased liability
as the result of the proximity of child-care to their operations.
The results of our interviews also suggest that a 1,000-foot buffer requirement would not
adversely impact values of large properties occupied by their owners. This conclusion
reflects the assumption that if such owner-occupants desire child-care facilities, the owner-
occupants could comply with the setback requirement without having to enter into
agreements with adjoining property owners and that their operations would not be affected
by the requirement. The respondents indicated that there are few businesses that would fit
into this category.
The results of the interviews also strongly indicate that there would be a negative correlation
between obtainable rents and land values and the provision of child-care facilities if a 1,000-
foot buffer is required. This negative impact would result from: (a) a restriction on the uses
to which land within the 7,000-foot radius could be put; and (b) a limitation on the type of
companies that could be attracted or retained as users on land within the 1,000-foot buffer.
Those with whom we spoke indicated heavy industry is less important to Carlsbad’s
economic base than historically has been the case. Most of the tenants that have been
coming to or growing in Carlsbad tend to be smaller space users. These smaller users do
not typically control sufficient land to comply with a use retriction such as a 1,000-foot buffer
requirement, and in contrast to larger users, would therefore more likely be affected by a
1,000-foot setback requirement should they or other proximate users desire child-care
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A greater propoflion of light industrial and research-oriented rather than office-oriented users
tend to be attracted to the Carlsbad market. These include biotechnology, electronics and
computer manufacturers. While most of these companies may not use large quantities of
acutely hazardous materials, some might use them in the future. In addition, new materials
used by high technology (industrial) firms could in the future be classified as acutely
hazardous. If these businesses could not be attracted because of their use of hazardous
materials, the supply of prospective tenants or land purchasers would be limited. Potential
demand, then, relative to the supply of land and building space would decrease. Thus, the
price for space or land would fall accordingly.
The developedmanager of the business park in Oceanside that contains a child-care center
believes that the 1,000-foot buffer would create costs in terms of restrictions on use that
would exceed the benefits derived from the provision of child-care. He believes that if
restrictions are less onerous, then the benefits would outweigh the costs. He noted that the
child-care center at his business park is not subject to a buffer requirement and is located
within 50 feet of another business. Studies done as part of the permitting process found,
however, that there were no off-site consequences and that the business located within 50
feet of the child-care center, used quantities and types of chemicals no more dangerous than
those typically found in a kitchen cabinet. Thus, no loss in the use of land or ability to attract
other activities was associated with the provision of the child-care center.
A property ownerlmanager in Carlsbad also stated his belief that a 1,000-foot buffer
requirement would excessively restrict property rights, and the ability of the property within
the buffer zone to attract and retain a diverse base of businesses. The property
owner/manager would be a proponent for the provision of child-care facilities in industrial
areas if restrictions were less intrusive on his ability to operate development projects and
compete for tenants.
Based on the responses of the real estate brokers, property managers, developers and
owners contacted, it is not likely that property owners/developers would voluntarily agree to
limit the pool of prospective tenants for their properties by restricting the types of chemicals
that could be used within their industrial developments.
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Finally, we would note that the director of the child-care center with whom we spoke, who
obviously feels the provision of child-care is beneficial, recommended that a buffer be
established for safety purposes.
TELEPHONE SURVEY OF BUSINESSES IN CARLSBAD
Introduction to Survey
To obtain information and opinions with respect to the potential provision of child-care in
industrial areas, the City of Carlsbad conducted a telephone survey of representatives of 32
businesses located in industrial areas in Carlsbad. The City was responsible for designing
the surveys and interviewing the respondents. GG+A coded the responses and analyzed the
results. The primary conclusions drawn from the analysis of the survey results and
interviews with real estate brokers, property managers and developers are summarized
below. A copy of the questionnaire is included as Appendix C.
Summary and Analysis of Survey Results
Table 1 below summarizes the responses of question 1, "Which of the following best
describes your company?"
TABLE 1
Respondents By Type of Business Activity
industry # %
Bio-industrial 4 12.5
Manufacturing 14 43.8
Electronics 3 9.4
Computer related 4 12.5
MediaCommunications 3 9.4
Other 4 12.5
TOTAL 32 100.0
Sources: Clty of Carlsbad Survey; GG+A.
Fourteen (14) or approximately 44 percent of the respondents are included in the
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manufacturing category. Three of these firms had selected more than one answer to the
question. One of the firms which selected manufacturing and electronics, manufacturers
semi-conductor chemicals, and was included in the manufacturing category. A second firm
included in the manufacturing sector, also selected the computer-related category,
assembles computers. The third firm that selected both bio-industrial and manufacturing,
manufacturers diagnostic kits and was included in the bio-industrial category.
Three categories each include four respondents or 12.5 percent of the sample: bio-industrial;
computer-related; and other. Two categories each include three firms or 9.4 percent of the
sample: electronics and mediakommunications.
Table 2 below summarizes the responses to question 2, "How many people are employed
by your company?"
TABLE 2
Employment By Size of Firm
Number Employed # %
0 - 50
51 - 100
101 - 200
200 or more
8 25.0
12 37.5
6 18.8
6 18.8
TOTAL* 32 100.1
May not add to 100% due to rounding.
Sources: Ci of Carlsbad Survey; GG+A.
Twelve firms or 37.5 percent of the sample employ between 50 and 100 workers. Another
eight firms or 25 percent of the sample employ 50 or fewer workers. Six firms or 18.8
percent of the sample employ between 100 and 200 individuals while another six firms or
18.8 percent of the sample employ 200 or more persons.
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Table 3 below summarizes the response to question 3 concerning whether respondents
lease their facilities or own and occupy their facilities.
TABLE 3
Occupancy Status
- # L
OwnedOccupant 10 31.3
Lessee 22 68.8
TOTAL* 32 100.1
'May not add to 100% due to rounding.
Sources: City of Carlsbad Survey; GG+A.
More than twice the number of respondents lease rather than own and occupy their facilities.
Twenty-two firms or almost 69 percent of the sample lease their facilities. Ten firms or about
31 percent of the sample own and occupy their facilities.
Table 4 below summarizes the responses to question 4 concerning the amount of space the
respondents' facilities contain.
TABLE 4
Resoondents By Size of Facilities
# %
Less than 10,000 sq. ft. 1 3.7
10,000 - 50,000 ~q. ft. 24 75.0
50,000 - 100,000 sq. ft. 3 9.4
More than 100,000 sq. ft. 4 12.5
TOTAL 32 100.0
Sources: GG + A; Cii of Carlsbad Survey.
Twenty-four (24) or 75 percent of the firms occupy facilities containing between 10,000
square feet and 50,000 square feet of space. One firm or three percent of the sample
occupies less than 10,000 square feet of space. Three firms or about nine percent of the
sample occupy facilities containing between 50,000 square feet and 100,000 square feet. @ 11
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Four firms or 12.5 percent of the respondents occupy facilities containing more than 100,000
square feet of space.
Table 5 below summarizes the response to the question, "Would you (a) support or (b)
oppose a child-care facility located within 1,000 feet of your company, if you or future users
of your facility were to be restricted from using certain hazardous chemicals in large
quantities (e.g., 500 gallons or more)?"
TABLE 5
Support or Opposition For Child-Care If Use Restriction Applied
# % "
Support a faciltty with hazard restrictions 23 71.9
Oppose a facility with hazard restrictions 9 28.1
TOTAL 32 100.0
Sources: Ci of Carlsbad Survey; GG+A.
Twenty-three firms or 72 percent of respondents indicated their support for a child-care
facility located within 1,000 feet of their facilities if they or future users were restricted from
using hazardous chemicals in large quantities. Two of the respondents indicating their
support made same contingent upon the restriction not impacting their operations. Nine of
the 23 respondents, or 39 percent who indicated their support are in the manufacturing
category. Two of the three mediakommunications respondents indicated their support as
did two of the three respondents in the electronics category. All four of the respondents in
the computer-related category indicated their support, as did the four respondents in the
other category. Two of the four respondents in the bio-industrial indicated their support.
Nine firms or 28 percent of the respondents indicated their opposition to child-care facilities
within 1,000 feet of their facilities, if they would be restricted from using hazardous chemicals
in large quantities. Of these nine respondents, five or 56 percent are in the manufacturing
category.
It should be noted that those firms who rent their properties are by virtue of their occupancy
status not in a position to actually commit future tenants from restricting their use of @ 12
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hazardous chemicals.
Table 6 below summarizes the responses to question 6, concerning whether respondents
would support or oppose a child-care facility located within 1,000 feet of their facilities, if the
child-care facility were available to their employees.
The results are essentially the same as those for question 5, except that one respondent
indicated a "neutral" response and therefore is not included in either the support or oppose
categories. Accordingly, the number of firms supporting the location of child-care facilities
within 1,000 feet of their facilities decreased by one to 22 firms. In addition, one
manufacturer indicated support for child-care if a use restriction applied, but opposition if
child-care facilities are made available to its employees.
TABLE 6
Support or Opposition For Provision of
Child-Care Facilities If Available to Employees
# % "
Support a facility within 1,000 feet
Oppose a facility within 1,000 feet
if available to employees
if available to employees
22 71 .O
9 29.0
TOTAL 31 100.0
Sources: Cky of Carlsbad Survey: GG+A.
Eight of the 22 respondents who support the provision of child-care facilities if available to
employees are in the manufacturing category. Four respondents each are in the
computer-related and other categories, respectively. Of the nine respondents who
oppose child-care facilities if available to employees, six are in the manufacturing
category.
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Table 7 below summarizes the responses to question 7, "Would you (a) support or (b)
oppose a child-care facility within 1,000 feet of your facility, it if were not available for use by
your employees (;.e., private)?"
TABLE 7
Support or Opposition For the Provision of
Child-care Facilities If Not Available to Emdovees
## % "
Support a facility within 1,000 feet if not 13 46.4 available to employees
Oppose a facility within 1,000 feet if not 15 53.6 available to employees
TOTAL 28 100.0
Sources: City of Carlsbad Survey; GG+A.
Four firms did not have an opinion on this question. Of the 28 respondents to this
question, 13 firms or about 46 percent indicated their support while 15 firms or almost 54
percent indicated their opposition.
Of the 13 respondents supporting child-care facilities if not available to employees, four
are in the manufacturing category and three are in the other category. The remaining six
respondents are divided among the other types of business activities. Of the 15
respondents who oppose child-care facilities, nine are in the manufacturing category and
two are in the bio-industrial category. The remaining four firms are divided evenly among
the other four business activities.
The results of questions 6 and 7 suggest that the availability of child-care significantly
influences the level of support or opposition for child-care facilities.
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Table 8 below summarizes the responses to question 8, 'Would you purchase a building that
had an occupancy restriction prohibiting the use of hazardous materials or chemicals?"
TABLE 8
Attitude Toward Purchasinn A Buildinn With A Use Restriction
# Yo
Would purchase 14 43.8
Would not purchase 18 56.3
TOTAL. 32 100.1
'May not add to 100% due to rounding.
Sources: City of Carlsbad Survey; GG+A.
Eighteen (18) or 56 percent of the respondents indicated that they would not buy a building
with an occupancy restriction prohibiting the use of hazardous materials or chemicals.
Fourteen (14) respondents or 44 percent indicated they would buy a building under such a
use restriction. Several reasons were cited for those respondents who would not buy a
building under the use restriction. These include that such a restriction would unduly restrict
their business operations now; or might do so in the future should their manufacturing
processes change; or might make it difficult to market the building to future users by limiting
to whom they could sell or lease their facilities.
Table 9 below presents a cross-tabulation of the respondents' responses to question 8 as
to whether they would purchase a building with an occupancy restriction prohibiting the use
of hazardous materials or chemicals by type of business activity. Of the 18 respondents who
said they would not purchase a building with such a use restriction, ten or 56 percent are in
the manufacturing sector. Of the other respondents that would not buy a building, not more
than two or I1 percent fall into any other of the categories. Of the 14 respondents who
indicated they would buy a building under the use restriction, four or 29 percent are in the
manufacturing sector. Three firms or 21 percent are in the computer-related category, while
another three firms or 21 percent are in the other category.
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TABLE 9
Firms By Type of Business Activity That Would Purchase A Building
With An Occupancy Restriction Prohibitinn the Use of Hazardous Materials
TvDe of Business Purchase Not Purchase
# % # oh
Bio-industrial b 2 14.3 2 11.1
Manufacturing 4 28,6 10 55.6
Electronics 1 7.1 2 11.1
Computer related 3 21.4 1 5.6
Media/Communications 1 7.1 2 11.1
Other 3 21.4 1 5.6
TOTAL* 14 99.9 18 100.1
'May not add to 100% due to rounding.
Sources: Ci of Carlsbad; GG + A.
Table 10 below presents a cross-tabulation of the respondents' responses to question 8 by
the size of their firms.
TABLE 10
Finns By Employment Size That Would Purchase a Building With an
Occupancy Restriction Prohibitinn the Use of Hazardous Materials
EmDloVment Size Purchase Not Purchase
# % # %
0 - 50 workers 2 14.3 6 33.3
51 -1 00 workers 5 35.7 7 38.9
101-200 workers 3 21.4 3 16.7
200 or more workers 4 28.6 2 11.1
TOTAL 14 100.0 18 100.0
Sources: Ci of Carlsbad; GG+A.
Of the 18 respondents who would not buy a building with the use restriction, 13 or 72 percent
currently employ less than 100 workers. Six of these respondents or 33 percent employ less
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than 50 individuals. In contrast, of the 14 respondents who would buy a building with the use
restriction, seven or 50 percent employ less than 100 employees. Seven or one-half of the
respondents, who would buy a building, employ more than 100 workers with four of these
firms employing 200 or more employees. This data suggests that smaller firms are less likely
to purchase a building with a use restriction than firms that employ a greater number of
employees.
Table 11 presents a cross-tabulation of the respondents' responses to question 8 by the size
of their facilities. Of the 18 respondents who would not buy a building with the use
restriction, 14, or 78 percent occupy facilities between 10,000 square feet and 50,000 square
feet. Three of the 18 firms, or 17 percent occupy facilities containing more than 100,000
square feet. Of the 14 respondents who would buy a building with the use restriction, ten or
71 percent occupy facilities containing between 10,000 square feet and 50,000 square feet.
Three or 21 percent occupy facilities containing between 50,000 and 100,000 square feet
while only one firm occupies a facility containing more than 100,6>00 square feet.
TABLE 11
Firms By Size of Facilities That Would Purchase a Building With an
Occupancy Restriction Prohibitinn the Use of Hazardous Materials
Facilitv Size Purchase Not Purchase
# % # %
Less than 10,000 sq. ft. 0 0.0 1 5.6
10,000 - 50,000 Sq. ft. ' 10 71.4 14 77.8
50,000 - 100,000 ~q. ft. 3 21.4 0 0.0
More than 100,000 sq. ft. 1 7.1 3 16.7
TOTAL* 14 99,9 18 100,l
'May not add to 100% due to rounding.
Sources: Ci of Carlsbad; GG + A.
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Table 12 below summarizes the responses to question 9, "Would you lease a building that
had an occupancy restriction prohibiting the use of hazardous materials or chemicals?"
TABLE 12
Attitude Toward Leasing A Building With A Use Restriction
# %
Would lease 22 68.8
Would not lease ' 10 31.3
TOTAL* 32 100.1
+ May not add to 100% due to rounding.
Sources: Clty of Carlsbad Survey; GG+A.
In contrast to the results of question 8, a majority would agree to lease a building that had
an occupancy restriction prohibiting the use of hazardous materials or chemicals. Twenty-
two (22) firms or almost 69 percent of the sample indicated they would lease a building with
a restriction prohibiting the use of hazardous chemicals or materials. Ten firms or 31 percent
of the respondents said they would not lease a building with a prohibition on the use of
hazardous chemical or materials.
Table 13 presents a cross-tabulation of the respondents' responses to question 9 as to
whether they would lease a building under an occupancy restriction prohibiting the use of
hazardous materials or chemicals, by the type of business activity. Of the ten respondents
who would not lease a building under the occupancy restriction, four are in the manufacturing
category. Of the 22 firms that would lease a facility under the occupancy restriction, ten or
45 percent are in the manufacturing category. Four fims or 18 percent are in the computer-
related category. Three firms or 14 percent are in the other categories.
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TABLE 13
Finns By Type of Business Activity That Would Lease a Building
With an Occupancy Restriction Prohibiting Use of Hazardous Materials
Tvpe of Business Lease Not Lease
# % # %
Bio-industrial '2 9.1 2 20.0
Manufacturing 10 45.4 4 40.0
Electronics 1 4.5 2 20.0
Computer related 4 18.2 0 0.0
MediaEommunications 2 9.1 1 10.0
Other 3 13.6 1 10.0
TOTAL' 22 99.9 10 100.0
*May not add to 100% due to rounding.
Sources: City of Carisbad; GG + A.
Table 14 presents a cross-tabulation of the respondents' responses to question 9 by
employment size. Of the ten respondents who would not lease a building with the occupancy
restriction, seven or 70 percent employ less than 100 employees. Of the 22 respondents
that would lease a building with the occupancy restriction, 13 or 60 percent employ less than
I00 employees with the majority of these respondents employing between 50 and I00
employees. Nine or almost 41 percent of the respondents who would lease a building
employ more than 100 workers. As in the case with regard to firms that would purchase a
building with a use restriction, firms with a smaller number of employees are less likely than
employers with a large number of employees to lease a building with an occupancy
restriction.
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TABLE 14
Firms By Employment Size That Would Lease a Building
With an Occupancy Restriction Prohibiting Use of Hazardous Materials
EmDlovrnent Size Lease Not Lease
# % # %
0 - 50 workers 4 18.2 4 40.0
51 - 100 workers 9 40.9 3 30.0
101 - 200 workers 5 22.7 1 10.0
200 or more workers 4 18.2 2 20.0
TOTAL 22 100.0 10 100.0
Sources: CQ of Carlsbad; GG + A.
Table 15 presents a cross-tabulation of the respondents' responses to question 9 by the size
of their facilities. Of the ten respondents who would not lease a building with the occupancy
restriction, six or 60 percent occupy between 10,000 square feet and 50,000 square feet of
space. Three or 30 percent occupy facilities containing more than 100,000 square feet of
space. One firm or ten percent occupies less than 10,000 square feet of space.
TABLE 15
Firms by Facility Size That Would Lease a Building
With an Occupancy Restriction Prohibiting Use of Hazardous Materials
Facilitv Size Lease Not Lease
# % # %
Less than 10,000 sq. ft. 0 0.0 1 10.0
10,000 - 50,000 ~q. ft. 18 81.8 6 60.0
50,000 - 100,000 Sq. ft. 3 13.6 0 0.0
More than 100,000 sq. ft. 1 4.5 3 30.0
TOTAL* 22 99.9 10 100.0
*May not add to 100% due to rounding.
Sources: Crty of Carlsbad; GG + A. @ 20
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Of the respondents who would lease a building with the occupancy restriction, only one firm
or almost five percent occupies a building containing more than 100,000 square feet.
Eighteen or 82 percent of the respondents occupy between 10,000 and 50,000 square feet
while the remaining three respondents, or almost 14 percent occupy facilities containing
between 50,000 and 100,000 square feet.
Table 16 below summarizes the results of question IO, "Would you support a City ordinance
that required a child-care provider to obtain your legal permission to locate a child-care
facility within 1,000 feet of your facility3" The preponderance of respondents, 28 or almost
88 percent of the sample indicated their support for such an ordinance. Four (4) firms or
almost 13 percent of the sample said they would not support such an Ordinance. TWO
respondents would decline to support such an ordinance because they felt it would unduly
restrict the provision of child-care in industrial areas.
TABLE 16
Attitude Toward Proposed Ordinance
# x "
Would support ordinance 28 87.5
Would not support ordinance 4 12.5
TOTAL 32 100.0
Sources: Cii of Carfsbad Survey; GG+A.
Of the 28 respondents who would support a proposed ordinance, 14 are manufacturing fims:
four bio-industrial firms; three electronics firms; three "other" firms; and the remaining four
firms divided between computer-related and media/communications. Of those four
respondents who opposed an ordinance, two are in the computer-related industry, while one
respondent is in the medidcommunications category and another in the other category.
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Table 17 below summarizes the results of question 11, "DO you believe that child-care
facilities are appropriate in Carlsbad's Business Parks?"
TABLE 17
Attitude Toward Child-care Facilities in Industrial Areas
# % "
Child-care facilities are appropriate 27 84.4
Child-care facilities are not appropriate 5 15.6
TOTAL 32 100.0
Sources: City of Carlsbad Survey; GG+A.
Twenty-seven (27) respondents or about 84 percent of the sample believe that child-care
facilities are appropriate while five respondents or about 16 percent of the sample do not
believe child-care facilities should be located in business parks. Of the 27 respondents who
believe child-care facilities are appropriate in industrial areas, 11 are manufacturing firms;
four bio-industrial; four computer-related; four "other"; and the remaining four divided evenly
between electronics and mediakornrnunications. Three of the five firms that feel child-care
facilities are not appropriate in industrial areas are manufacturing firms. Several respondents
who do not believe child care is appropriately located in industrial areas cited safety
concerns. One respondent stated concerns about potential liability on the part of the
respondent company. Two respondents believes locations other than industrials areas are
more appropriate for the provision of child-care facilities.
Discussion
The cross-tabulations presented above suggest that the primary firms that would neither
purchase and occupy nor lease a facility under a restriction prohibiting the use of hazardous
materials or chemicals can be characterized as in the manufacturing sector, employing less
than 100 workers and occupying buildings containing less than 100,000 square feet of space.
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I
Based on our interviews with real estate brokers, property managers, owners and
developers, these type of firms make-up a significant part of the demand base for space in
industrial areas in Carlsbad. Accordingly, a child-care ordinance that requires property
owners and their tenants, or owner-occupants to commit to a legally binding restriction
prohibiting the use of hazardous chemicals within a 1,000-foot radius of a child-care facility
would likely have negative economic impacts for owners and tenants. These negative
impacts would likely include a reduction in land values and obtainable rents, higher insurance
costs for industrial businesses near child-care facilities as well as other economic impacts
associated with a limitation on the type of companies that could be attracted or retained as
users of land within the 1,000-foot buffer.
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APPENDIX A
SOURCES CONSULTED
Lannie Ailee, First Vice President industrial Properties,
CB Commercial Real Estate Group, Inc.
Ed Bowe, President, Risk Advisors, Inc.
Ronald A. Clyde, Vice President, The Blackmore Company
Rhonda Fischer, Owner/Director of Child-Care Center in Oak Ridge Park in Vista
Marian Ivan, Vice President, Director of Risk Management, RREEF
John Kovach, Vice President, Aon Risk Services, Inc.
Alice I. Mager, Account Executive, Sedwick James of California, Inc.
Arthur Manetta, Triquest Development
Charles J. McNary II, Senior Marketing Director, Colliers lliff Thorn
AI Ogle, Senior Broker Associate, Lee & Associates
David Steffy, Industrial Properties Division, Business Real Estate Brokerage Company
Shirley Vanwell, Broker Associate, Burleson Pacific
John C. White, Carltas
David Wingo, Johnson & Higgins
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APPENDIX B
TELEPHONE INTERVIEW GUIDE
Name of Respondent
Title of Respondent
Name of Firm
Telephone
Hello. I am Aaron Gruen with Gruen Gruen + Associates, a research and consulting firm.
Our firm is working with the City of Carlsbad and the environmental and planning consultant
David J. Powers & Associates, in helping to assess the potential economic impacts of
locating child-care facilities in industrial areas in Carlsbad. I would greatly appreciate having
about ten minutes of your time to find out your opinions on whether the location of child-care
facilities in industrial areas would effect investment and location decisions, and rents and
land values.
Brokers, Propertv Mananers and Developers
I. Have any industrial clientsltenants included as part of their site location criteria the
availability of child-care facilities in, or near their facilities? If so, which ones by type, size and locational preference?
2. Are there any industrial or business park projects in the Carlsbad market which
contain child-care facilities? If not, why not? If yes, obtain information on these in
terms of rents relative to overall market, absorption, type and size of tenants, and
opinion on effect, if any, provision of child care has played in producing such results.
Ask if child care is subsidized by developer or other party and find out what child-care
operator pays for land or building rent.
3. Have or would tenants be willing to pay more than would otherwise be the case to
have child-care facilities available to them in industrial areas? Do industrial
properties in locations with child-care facilities obtain or would obtain higher rents?
Faster absorption achieved or likely to be achieved? Why or Why not?
4. One option the City of Carisbad may consider would be allow on-site child care where
a 1,000 foot buffer can be established between the child care and industrial activities
using acutely hazardous materials. Child care centers would be allowed a conditional
or Owners of all property within 1,000 feet of the child care legally commit not to use acutely hazardous materials.
Would the no use of acutely hazardous materials within 1,000 feet requirement affect
the rental or property value as the result of such use limitations.
Would provision of child-care with and without a 1,000-foot buffer limit the type
of companies that could be retained/attracted?
use permit if they (1) are at least 1,000 feet from the site boundaries of other users
5. Ask whether they have building rental, land price, absorption and occupancy @ 25
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inventory information on Carlsbad. What type of firms laperatiens have been coming
to Carlsbad? Do they use hazardous materials?
Owners-Investors
1. Obtain property information-location, amount of land, amount of building space,
type and size of tenants, rental rates and typical lease terms, how long owned property.
2. If your tenants use hazardous materials, would the location of child-care facilities near your property affect your insurance costs? If so, how?
3. Would the location of child-care facilities near your property affect your ability to
attract or retain tenants? If so, how and why? If necessary, probe for whether
concerns exist about not being able to attract tenants who may use hazardous
potential for increased insurance costs or liability; or (c) potential public controversy/
difficulty of introducing new hazardous materials near a child-care center.
materials as the result of (a) uncertainty or added regulatory compliance costs; (b)
4. What proportion of your tenants use or might use hazardous materials or acutely
hazardous materials? What proportion may have to apply for air-quality permits?
5. Would the location of child-care facilities near your property affect its value? If so,
how and why3 If no, why not?
6. As a property owner, how would you likely respond to a request for a legally binding
covenant to not have a user as a tenant who uses acutely hazardous materials as
long as a child care facility was within a 1,000 foot radius of your property?
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APPENDIX C
Phase II Child Care Study
Telephone Interview Questions
1. Which of the following best describes your company:
a. Bio-Industrial
b. manufacturing c. electronics
d. computer related
e. mediakommunications
f. other
2. How many people are employed by your company?
a. 0-50
b. 51-100
c. 101-200
d. 200 or more
3. Which of the following statements applies to the current status of your
occupancy :
a. owner and occupant of the facility
b. lease the facility only
4. What it the approximate square footage of your existing facility:
a. c 10K
b. 10K to 50K
c. 50K to IOOK
d. > 100K
5. Would you:
a. Support
b. Oppose
a childcare facility located within 1000 feet of your company, if you or future
users of your facility were to be restricted from using certain hazardous
chemicals in large quantities?
6. Would you:
a. Support
b. Oppose
a childcare facility located within 1000 feet of your ffacility (with a use
restriction), if it were available for use by your employees?
* m
7. Would you:
a. Support
b. Oppose
a childcare facility within 1000 feet of your facility (with a use restriction),
if it were not available for use by your employees (i.e. private)?
8. Would you purchase a building that had an occupancy restriction prohibiting
the use of hazardous materials or chemicals?
a. Yes
b. No
If no, please explain.
9. Would you lease a building that had an occupancy restriction prohibiting the
use of hazardous materials or chemicals?
a. Yes
b. No
If No, please explain.
10. Would you support a City ordinance that required a childcare provider to
obtain your legal permission or consent to locate a childcare facility within
1000 feet of your facility?
a. Yes
b. No
If No, Please explain.
11. Do you believe that childcare facilities are appropriate in Carlsbad’s
Business Parks?
a. Yes
b. No c. If No, Please explain