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Home My WebLink About2008-04-15; City Council; 19405; Presentation of economic development overviewT^STT \W&; ^j|^/ CITY OF CARLSBAD - AGENDA BILL V AB# 19,405 MTG. 4/15/08 DEPT. FIN PRESENTATION OF ECONOMIC DEVELOPMENT OVERVIEW DEPT. HEAti CITY ATTY. i CITY MGR. ^ 11 f^N^xjA -- c&* \JJ~- RECOMMENDED ACTION: Accept presentation by the City of Carlsbad Finance Director and Manager of Economic Development & Real Estate regarding an overview of the economy and economic development. ITEM EXPLANATION: The United States is experiencing an economic slow down especially with respect to the housing market. It is important for the City of Carlsbad to be aware of the economic slow down and the potential impacts on the City of Carlsbad's finances. This presentation will help provide an overview of the national, state and local economies with specific information regarding the City of Carlsbad's economic development system and the impact of the slowing economy on Carlsbad and its neighboring cities. This information will help the City be aware and proactive as we move through this economic uncertainty. FISCAL IMPACT: None. ENVIRONMENTAL IMPACT: The proposed presentation does not constitute a "project" within the meaning of the California Environmental Quality Act and, therefore, do not require environmental review. EXHIBITS: None. DEPARTMENT CONTACT: Lisa Irvine and Cynthia Haas 760-602-2430 lirvin@ci.carlsbad.ca.us or chaas@ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. COUNCIL ACTION:APPROVED DENIED CONTINUED WITHDRAWN AMENDED nD D D D CONTINUED TO DATE SPECIFIC CONTINUED TO DATE UNKNOWN RETURNED TO STAFF D Dn OTHER - SEE MINUTES DCouncil received the presentation (See Minutes for details) CarlsbadCarlsbadEconomic OverviewEconomic OverviewApril 15, 2008April 15, 2008 CarlsbadCarlsbadEconomic Development ModelEconomic Development ModelCarlsbad Quality of LifeBusinessesResidentsTouristsVisitorsPopulationDemographicsEmploymentConsumer DemandConsumer SpendingMunicipal ServicesInfrastructure TrafficHousing StockLand Supply and DevelopmentSchoolsEnvironmentPublic SafetyGov’t /Public Policies•Zoning/Land Use•Housing•Business Development•Tourism•Infrastructure•Municipal Services•Public Facilities•Public Programs•Environmental•Fee StructureATTRACTSIMPACTCREATE ANEED FORMAINTAINPRESERVE ENHANCE Public Policy Result Public Policy Result Zoning & Land Use Zoning & Land Use --Certain uses allowed in certain locations.Certain uses allowed in certain locations.OfficeOfficeIndustrialIndustrialCommercial Commercial --Retail/HospitalityRetail/HospitalityResidentialResidentialOpen SpaceOpen Space––Different uses influence different building types that contributDifferent uses influence different building types that contribute differently e differently to the Cityto the City’’s financial health.s financial health.Property Tax (Commercial/Industrial/Residential/Vacant)Property Tax (Commercial/Industrial/Residential/Vacant)Sales Tax (Commercial Sales Tax (Commercial ––Retail/Hospitality)Retail/Hospitality)Transient Occupancy Tax (Commercial Transient Occupancy Tax (Commercial --Hospitality)Hospitality)––Different land uses (Commercial/Industrial/Office) produce diffeDifferent land uses (Commercial/Industrial/Office) produce different rent types of jobs & wages.types of jobs & wages.High Wage Jobs (Manufacturing, R&D/Technical, Information) High Wage Jobs (Manufacturing, R&D/Technical, Information) Mid Wage Jobs (Administrative, Construction, Financial)Mid Wage Jobs (Administrative, Construction, Financial)Low Wage Jobs (Agriculture, Retail, Hospitality, Food)Low Wage Jobs (Agriculture, Retail, Hospitality, Food) Economic OutlookEconomic OutlookSources of Information to develop Sources of Information to develop economic outlook:economic outlook:––CSMFOCSMFO––Anderson (UCLA)Anderson (UCLA)––California Legislative Analyst Office (LAO)California Legislative Analyst Office (LAO)––University of San Diego University of San Diego The US EconomyThe US EconomyGDP growth: 4.9% Q3 declining to 0.6% Q4GDP growth: 4.9% Q3 declining to 0.6% Q4CPI: 2.5 CPI: 2.5 ––3.0%3.0%Fed Funds: 2.25%Fed Funds: 2.25%10 year Treasury Note: 3.0 10 year Treasury Note: 3.0 --3.5%3.5%Unemployment Rate: 5.0%Unemployment Rate: 5.0%Slowing in construction, consumer spending, state Slowing in construction, consumer spending, state and local government and residential investmentand local government and residential investment CaliforniaCalifornia’’s Economys EconomyState Budget outlook for FY 2008State Budget outlook for FY 2008--2009 2009 continues to deteriorate ($14 B deficit) continues to deteriorate ($14 B deficit) May borrow local governmentsMay borrow local governments’’revenues revenues to help balance Stateto help balance State’’s budgets budgetMay borrow Gas Tax cash flow for 5 May borrow Gas Tax cash flow for 5 monthsmonths San Diego EconomySan Diego EconomyUnemployment rate risingUnemployment rate risingHome Prices and Home Prices and resalesresalesdecliningdecliningSlowing Housing startsSlowing Housing startsNotices of Default and Foreclosures are Notices of Default and Foreclosures are increasingincreasingInventory of housing has risen from 6Inventory of housing has risen from 6--7 7 months in 2006 to 13 months in 2007months in 2006 to 13 months in 2007 CarlsbadCarlsbad--20062006Employees and Average Wage Employees and Average Wage by Industry by Industry 01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000ManufacturingRetailAdmin/Support/WM SvcsAccom/Food SvcsProf/Sci/Tech SvcsWholesaleF.I.R.E.ConstructionGovtHealth/Soc SvcInformationArts/Entertainment/RecMgmt of CompaniesTransportationAgricultureOtherIndustryEmployees$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000Average Wage# of EmployeesAverage Wage2006 Total Employment = 65,621 CarlsbadCarlsbadCommercial/Industrial Commercial/Industrial Square Footage (Permits Issued)Square Footage (Permits Issued)020000040000060000080000010000001200000140000016000002000 2001 2002 2003 2004 2005 2006 2007Square FootageNew/Speculative Development at Bressi, Raceway, ForumOffice Vacancy Approx. 30%Industrial Vacancy Approx. 18% New ResidentialNew ResidentialDwelling Units PermittedDwelling Units Permitted050010001500200025002000 2001 2002 2003 2004 2005 2006 2007PermitsPermits Issued TrendTotal Permits Issued 2000-2007 = 9,147Total Units Remaining 2008-Buildout = 10,582Excess Dwelling Unit Bank – 2,967 Carlsbad Median Home PricesCarlsbad Median Home PricesAttached/CondoAttached/CondoAll Carlsbad Zip CodesAll Carlsbad Zip Codes0100000200000300000400000500000600000700000800000J2006MMJSNJ2007MMJSNJ2008Median Price6 Month TrendFebruary 2008 Carlsbad Median Price Resale Attached Home = $446,633 Carlsbad Median Home PricesCarlsbad Median Home PricesDetachedDetachedAll Carlsbad Zip CodesAll Carlsbad Zip Codes02000004000006000008000001000000120000014000001600000J2006MMJSNJ2007MMJSNJ2008Median Price6 Month TrendFebruary 2008 Carlsbad Median Price Resale SF Home = $677,909 Foreclosure ActivityForeclosure Activity2007/2008 Trustee Sales/To Auction2007/2008 Trustee Sales/To Auction71235-200204060801001201401601803rd Qtr 074th Qtr 071st Qtr 08CarlsbadOceansideSan MarcosVistaEncinitasEncinitas4%Carlsbad10%Vista21%San Marcos20%Oceanside45%261023671st Qtr. Distribution of367 Homes to Auction16574783515 Regional Sales Tax GeneratorsRegional Sales Tax GeneratorsPrimary Trade AreasPrimary Trade AreasDowntown Redevelopment Area CarlsbadDowntown Redevelopment Area Carlsbad––CarlsbadCarlsbad––No. County Coastal/TouristNo. County Coastal/TouristPlaza Camino Real Plaza Camino Real ––Westfield Shopping TownWestfield Shopping Town––OceansideOceanside––CarlsbadCarlsbad––VistaVista––San MarcosSan Marcos––EncinitasEncinitasAuto MallAuto Mall––CarlsbadCarlsbad––North County Coastal North County Coastal Forum ShopsForum Shops––CarlsbadCarlsbad––North County Coastal/InlandNorth County Coastal/InlandCarlsbad Premium OutletsCarlsbad Premium Outlets––CarlsbadCarlsbad––North County Coastal/Inland/TouristsNorth County Coastal/Inland/Tourists––San DiegoSan Diego 5%7%4%25%8%Auto MallPCR-WestfieldDowntown - RDAPremium OutletsForum OtherCarlsbad Regional Sales Tax Generators Regional Generators = Approx. 49% of Carlsbad’s Sales Tax Revenue Total Citywide Sales Tax Revenue 2007 ($98,048,395)Total Citywide Sales Tax Revenue 2007 ($98,048,395) Sales TaxSales TaxHISTORIC SALES TAX BY GEOGRAPHIC AREABenchmark Year$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000$7,000,00099/4 00/1 00/2 00/3 00/4 01/1 01/2 01/3 01/4 02/1 02/2 02/3 02/4 03/1 03/2 03/3 03/4 04/1 04/2 04/3 04/4 05/1 05/2 05/3 05/4 06/1 06/2 06/3 06/4 07/1 07/2 07/307/4Carlsbad Redevelopment AreaAuto MallPlaza Camino RealCrossroad Premium OutletsThe Forum Sales TaxSales TaxCity of Carlsbad Sales Tax$0$500,000$1,000,000$1,500,000$2,000,000$2,500,0002006/12006/22006\32006/42007/12007/22007/32007/4General RetailFood ProductsTransportaionConstructionBusiness to BusinessMiscellaneous Sales TaxSales TaxNew Auto Sales (Bnchmrk Yr.)$5,500,000$6,000,000$6,500,000$7,000,000$7,500,0002005/12005/22005/32005/42006/12006/22006/32006/42007/12007/22007/32007/4 Transient Occupancy TaxTransient Occupancy TaxLow Wage JobsLow Wage JobsHotel GrowthHotel Growth––Occupancy RatesOccupancy Rates––Room RatesRoom RatesTourismTourism––Drive MarketDrive Market––International TravelersInternational Travelers––Business TravelersBusiness Travelers General Fund RevenuesGeneral Fund RevenuesProperty TaxProperty TaxSales TaxSales TaxTransient Occupancy TaxTransient Occupancy TaxFranchise FeesFranchise Fees SummarySummaryEconomy is Very UncertainEconomy is Very UncertainContinue LongContinue Long--Term PlanningTerm PlanningContinued Fiscal ConservatismContinued Fiscal ConservatismOngoing MonitoringOngoing MonitoringCautious BudgetCautious Budget CarlsbadCarlsbadEconomic OverviewEconomic OverviewApril 15, 2008April 15, 2008 Permit IssuancesPermit IssuancesResidentialResidential––CY 2007 364 Dwelling Units PermittedCY 2007 364 Dwelling Units Permitted––CY 2006 713 Dwelling Units PermittedCY 2006 713 Dwelling Units PermittedCommercial and IndustrialCommercial and Industrial––CY 2007 1,457,958 sq ft PermittedCY 2007 1,457,958 sq ft Permitted––CY 2006 1,373,138 sq ft PermittedCY 2006 1,373,138 sq ft Permitted