HomeMy WebLinkAbout2021-05-11; City Council; ; COVID-19 Economic Response Assessment and Recovery ImplicationsMeeting Date: May 11, 2021
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: David Graham, Chief Innovation Officer
david.graham@carlsbadca.gov, 760-434-2992
Subject: COVID-19 Economic Response Assessment and Recovery Implications
District: All
Recommended Action
•Receive a report regarding the assessment of the city’s economic response to COVID-19
and discuss insights and potential actions for an inclusive recovery
•Discuss the recommendation from the Ad Hoc City Council Economic Revitalization
Subcommittee to direct staff to return to the City Council with an action to create a
standing economic development subcommittee
•Adopt a resolution approving COVID-19 economic recovery actions, including the
development of a written economic recovery and development strategy and moving
unspent Economic Recovery and Revitalization Initiative funds into the fiscal year 2021-
22 budget to continue supporting economic recovery
Executive Summary
As the impact of the COVID-19 pandemic has begun to subside, the county, state and nation are
beginning to move toward recovery. The economic toll from the pandemic and corresponding
health orders that restricted business operations has been severe. The impact has also been
disparate, varying depending on the industry, type of business and even ownership.
Recognizing these factors, the city has actively engaged in economic response activities in
collaboration with our business community: triaging challenges, working collaboratively with
business organizations and stakeholders to provide solutions, relaying clear information about
restrictions and relief programs to the city’s businesses and helping individual businesses find
ways to weather the pandemic with one-on-one support.
Looking forward, the economic landscape is changing. Restrictions are lessening and most
business operations are normalizing. However, certain industries and sectors remain financially
behind and are anticipated to have a longer road to recovery. The city’s recovery strategy needs
to account for the disparate impacts of the pandemic and provide different solutions – a one-
size-fits-all approach risks marginalizing some businesses and industries.
May 11, 2021 Item #12 Page 1 of 61
This shift created an opportunity to set a foundation to “build back better,” that is, to take the
lessons learned during the pandemic and apply them to fostering a more resilient economy.
Staff contracted with a consultant who specializes in inclusive economic development to
evaluate the city’s economic response, assess the impact of programs put in place, and provide
strategic recommendations for how the city can best position itself for recovery and growth
coming out of the pandemic. Data analysis and business community engagement were key to
the effort to review the impacts, interventions, and discovery implications from the city’s
economic response to COVID-19. In addition to drawing upon national, regional, and local data
there was extensive business community outreach including, five stakeholder meetings,
collaboration with local and regional business organizations, and a business survey with over
160 participants.
The “City of Carlsbad Economic Response to COVID-19: Moving to Recovery” report (Exhibit 3)
prepared by Cities GPS, a national inclusive economic development consultant founded and led
by a Brookings Institution non-resident fellow, provides an in-depth review of the impacts,
interventions and implications of the city’s response to the pandemic. Based on that report and
engagement with the city and business community, the COVID-19 Inclusive Recovery
Assessment (Exhibit 2) was developed to provide an approachable set of findings and
implications related to the city’s pandemic response to help inform a strategic approach to
shifting from an economic response to the pandemic to supporting recovery.
The assessment concluded that a written economic recovery and development strategy should
be developed to support local businesses in recovery and revitalization.
This report includes the option for the City Council to approve the development of an economic
development strategic plan, allocate funding from unspent funds committed to the Economic
Recovery and Revitalization Initiative to the development of the strategy and shift funds
committed to economic recovery and revitalization into fiscal year 2021-22 to continue
implementing these programs.
Staff also asks the council to discuss and possibly act on the Ad Hoc City Council Economic
Revitalization Subcommittee’s recommendation to replace the existing subcommittee with a
standing City Council economic development committee.
Discussion
Background
Governor Gavin Newsom declared a state of emergency March 4, 2020, after the first COVID-19
death in the state of California. He directed all “non-essential” businesses to close in the state
nine days later That same day the city manager, in his role as the city’s director of emergency
services, declared a local state of emergency in Carlsbad. The City Council ratified the
proclamation the following day.
The impact to businesses and the economy was severe in the following weeks and months, with
unemployment in the city spiking to 13.8% in April 2020.
Six months after the shutdown, the state unveiled its Blueprint for a Safer Economy, which the
governor said outlined a stringent and slow plan for living with COVID-19 for the long haul. This
plan used health metrics to slot counties into tiers based upon the severity of community
spread, allowing for more business activities where there was less spread and imposing greater
May 11, 2021 Item #12 Page 2 of 61
restrictions where community transmission was more widespread. San Diego County was
initially in the red or “substantial” tier, which had fewer restrictions than the purple or
“widespread” tier. On Dec. 5, 2020, the governor announced the Regional Stay at Home Order,
which put more stringent restrictions on business operations. This order was lifted Jan. 25,
2021. At that time, San Diego County was in the purple or “widespread” tier, before advancing
to the red, and eventually orange tier. The governor has since announced that the tiered
reopening plan and most of its restrictions on business operations are projected to end on
June 15, 2021. It’s expected that there will be some continuation of restrictions for
conventions, large community events, and endurance type events, such as marathons.
Through all the mandates by the state and county to open, close, or modify public and private
operations, the City of Carlsbad has worked to encourage and enforce adherence to the public
health orders. The city has collaborated with the county, other municipal agencies, its business
organizations, businesses and residents to address the pandemic. Carlsbad has consistently had
one of the lowest if not the lowest rates of infection for local cities with populations of 50,000
or more.
Economic Recovery and Revitalization Initiative
To support small businesses affected by the COVID-19 public health pandemic, the City Council
approved a $5 million Economic Recovery and Revitalization Initiative on April 21, 2020. The
initiative has included, among other things, city lessee relief, a business promotion and tourism
marketing campaign, a referral relationship with the National Conflict Resolution Center to
provide free mediation services to landlords and tenants through the county community
mediation program, an e-gift card program with bonuses funded by private fundraising with
matching city funding, a microloan and small business loan program and temporary outdoor
permitting for business operations.
Business outreach has included one-on-one support to businesses, webinars and a dedicated
webpage that includes federal, state, county and city resources.
The City Council approved a resolution Sept. 1, 2020, that appropriated $50,000 in funding to
the Carlsbad Chamber of Commerce to sponsor the Gift Carlsbad shop local program, an e-gift
card program with a bonus amount added to the purchase of an e-gift card from a participating
Carlsbad business. The bonus amount was paid for by the Ready Carlsbad Business Alliance with
a one-to-one match provided from the city. Eighty-three businesses signed up to participate in
the e-gift card marketplace and more than 2,100 virtual gift cards have been purchased, which
between the card purchase and bonus totaled more than $85,000.
The City Council approved a resolution Aug. 18, 2020, approving further implementation of the
Economic Recovery and Revitalization Initiative and modifications to the COVID-19 Small
Business Loan Program. The program provides microloans of between $5,000 to $10,000 and
small business loans of between $10,000 to $25,000 to Carlsbad businesses that meet certain
criteria.
On January 19, 2021 the City Council approved program modifications to allow for business
loans of up to $50,000 and increased the revenue cap of businesses to $5 million and allowed
for businesses to apply for multiple loan products, with a total loan cap of $60,000.
May 11, 2021 Item #12 Page 3 of 61
Based on an analysis of business license data, about 150 to 175 businesses became eligible to
apply for a loan with the updated criteria. Since implementing the changes on February 1, 22
additional businesses have applied for a business loan and 15 have applied for loans above the
original limits.
On April 27, the City Council approved program modifications to expand the business loan term
to make repayments less burdensome for businesses. This changed the maximum term for the
microloan from 18 months to 30 months and the small business loan’s maximum term from 30
months to 60 months. The City Council also approved allowing for one-time additional
deferments of loan repayments, easing the burden for businesses still being impacted by the
pandemic and reducing the likelihood of default.
The city has granted $1.66 million in loans to a total of 82 businesses. Four additional
applications are in process. Sixty-two loans are currently in repayment – meaning their
automatic six-month deferment period is over – and two loans have been fully repaid. There
have been no defaults.
Cities GPS analyzed the loan program as part of their report (Exhibit 3). They found that as of
April the estimated multiplier impact from the 77 executed loans ranges from preserving 185 to
215 jobs, and $975,000 to $1.08 million in annual local tax revenue. Notably, distribution of
these results by industry sector differs substantially from the amount of loans allocated,
reflecting the varying contributions to economic metrics like employment, value-creation, job
quality, and tax base. For example, support to hospitality businesses comprised 17% of the
loans made and total amount lent, plus 32% of direct employment, yet they represented only
14% of all jobs while generating an enormous 54% of local tax revenues preserved.
Manufacturing accounted for 8% of loans and lending, but 13% of jobs impacted and 17% of
taxes. Meanwhile, retail encompassed about 30% of the number and amount of loans made
compared to 25% of jobs and 12% of tax preserved.
The city has continuously assessed its economic response to the pandemic and made
modifications as necessary based on changing conditions, feedback from businesses and
business organizations and policy direction from the City Council. The Ad Hoc City Council
Economic Revitalization Subcommittee has generally met every two weeks to stay updated on
current economic and operating conditions and provide guidance regarding the city’s response.
Analysis
Cities GPS analyzed the city’s economic response and found that it was in alignment with peer
cities across the country. In some cases, the City of Carlsbad’s response led peer cities. The
report incorporated:
• Quantitative assessment drawing on city data, plus other regional (e.g., the San Diego
Association of Governments) and national sources.
• Qualitative review of city COVID-19 responses at a national scale, including identification
of a set of comparable cities, to contextualize Carlsbad’s activity
• Five stakeholder engagement sessions that included disabled, veteran, minority and
women-owned businesses; innovation economy firms and startups; tourism companies,
small businesses and regional business intermediaries
• Business survey that elicited more than 165 responses from Carlsbad firms
May 11, 2021 Item #12 Page 4 of 61
The report concluded that Carlsbad initiated an immediate response to the COVID crisis that
paralleled – and in some cases exceeded – many of the approaches undertaken in comparable
cities. This response spanned the major categories of intervention identified in a broad national
review of peer city interventions: providing resources and information, offering regulatory
relief, expanding capital access and aiding workers.
For example, the size of Carlsbad’s business loan program was among the highest of
comparable cities examined; that it was capitalized by city funds rather than CARES Act
resources was distinctive and may have allowed the city to move faster to address the crisis.
The city worked with intermediaries, such as the Carlsbad Chamber of Commerce and Carlsbad
Village Association, to leverage networks and target response, likely improving effectiveness.
Although some structural decisions regarding terms and duration might be reconsidered with
hindsight, the city also actively sought business feedback and adjusted responses – such as
eligibility for its loan program – in response to evolving needs and conditions. While it is not
possible to make definitive causal claims about the impact of relief without a formal program
evaluation, Carlsbad’s response was found to be comparatively comprehensive and well-
designed.
Strategy
Looking forward, lessons from the COVID-19 pandemic indicate that continued strategic
economic development action will be needed to both promote a full recovery and improve the
business ecosystem, particularly extending to those sectors, businesses and workers that were
hurt most by the pandemic. The implications for inclusive economic recovery and development
and program considerations are listed in the “Options” section for City Council consideration
and are also included as Exhibit 2.
Options
Option 1 - Create a standing City Council subcommittee on economic development
The City Council approved the creation of an Ad Hoc City Council Economic Revitalization
Subcommittee on April 7, 2020. The subcommittee has met 34 times to provide guidance on
programs related to the city’s economic response.
With the improving economic conditions, the necessity for the Ad Hoc City Council Economic
Revitalization Subcommittee is coming to an end. However, there are still several economic
recovery items moving forward that would benefit from council guidance
The City Council could create a new standing committee with a focus on economic
development strategies and programs.
Pros
• Could provide timely ongoing guidance to staff on broad economic development
issues, including economic recovery, inclusive growth, small business support,
and strategies and programs that would position the city for strategic growth.
• Could help the city prepare for potential future economic disruptions
Cons
• City staff will be required to provide administrative support for the standing committee
• Permanently establishes additional duties for council members
May 11, 2021 Item #12 Page 5 of 61
Ad Hoc City Council Economic Revitalization Subcommittee recommendation
The subcommittee recommended creating a standing Economic Development Subcommittee to
provide ongoing guidance on economic development programs and strategies including:
• Creation of a long-term, inclusive economic recovery and development strategy
• Coordination with Carlsbad business organizations
• Evaluation of economic impact of citywide policy
• Other programs and initiatives as approved by the City Council
Option 2 - Carrying Economic Recovery and Revitalization Initiative funds over to fiscal year
2021-2022
The city’s current economic relief and revitalization programs, such as the existing small
business loan program, fee waivers for temporary outdoor use and other relief efforts funded
through the City Council’s contingency funds remain crucial to providing economic relief as
businesses begin to recover from the pandemic impact. Many of these programs are tied to the
health emergency, which could continue beyond June 30. The City Council could adopt a
resolution that carries over the remaining Economic Recovery and Revitalization Initiative funds
to be used in fiscal year 2021-2022 and through the end of the health emergency.
Pros
• Allows current economic relief programs to continue through the end of the
health emergency
Cons
• Funds the City Council committed from the economic uncertainty set-aside fund
for the city’s economic response to the pandemic would remain committed to
that purpose and would not be repurposed for other priorities
Ad Hoc City Council Economic Revitalization Subcommittee recommendation
The subcommittee recommended carrying over existing Economic Recovery and Revitalization
Initiative funding into fiscal year 2021-22 with a recommendation that the funding and its
potential uses be reconsidered once the health emergency orders have been lifted.
Option 3 – Develop an inclusive economic recovery and development strategy
As noted above, the city’s experience during the pandemic indicates that continued strategic
economic development will be required to promote a full recovery and improve a business
ecosystem that was hit hard by the pandemic.
This likely requires a formal economic development strategy that considers these issues:
• Prioritizing potential activities for maximum return on limited resources
• Defining the specific role of the city in advancing these changes
• Aligning with other contributors to fill gaps and eliminate redundancies, reflecting
Carlsbad’s distinctive position as the major sub-regional economic and employment hub
in North County
Written, long-term economic development strategies are common in midsize and large cities.
The City of Carlsbad does not have an existing comprehensive strategy. Cities throughout the
region, state and country rely on these long-term strategies to focus economic development
efforts, set priorities, inform growth plans and shape policy. In North County, the cities of
May 11, 2021 Item #12 Page 6 of 61
Escondido, San Marcos, and Vista all have some form of written economic development
strategy, while the City of Oceanside has an economic development element in its general plan,
which was approved in 2019.
With the emergence from the COVID-19 pandemic, the City of Carlsbad has an opportunity to
develop a strategy that takes into account the significant economic impact of the past year and
ensures that the city sets an inclusive approach to economic development, which is to say, a
strategy that ensures all residents, businesses and workers are able to share in the city’s
economic prosperity.
The following list highlights potential near- and long-term tactics for continued economic
development drawn from the city’s initial response and recovery assessment. The City Council
could provide direction on the how these tactics would be prioritized in the economic recovery
phase and in the overall inclusive economic recovery and development strategy.
1. Continue to improve and build capacity of city economic development operations.
The pandemic reinforced the imperative need for a high-capacity, customer-friendly
approach to economic development equipped to quickly identify and respond to
business needs. Moving forward, the city could institutionalize and expand modern
practices and flexibilities that have been adopted for communicating with and
serving businesses.
• Near-term actions
o Bolster data and research capacity. Continue investing in data and
research capacity for finely grained business and market intelligence to
proactively identify issues and inform interventions.
o Strengthen communications with businesses. Conduct a review of city
communications with businesses, including digital analytics, to identify
any ways to better design and target these products.
• Longer-term actions
o Improve business interface with the city. Reform the business license
application process, permitting and other areas of business interaction
with the city to provide clearer, customer-friendly service such as: single
interface and simplified processes, clearer communication and shorter
wait times. Many businesses have requested this.
o Pursue ongoing regulatory flexibilities. Consider ongoing or permanent
adjustments to regulatory measures eased during the pandemic, such as
outdoor dining.
2. Expand availability and access to business supports at city and regional levels.
While business supports were fundamental to the city’s pandemic relief efforts, the
crisis illustrated unevenness in coverage and access. Closing these gaps can help
promote long-term growth during recovery and revitalization.
• Near-term actions
o Advance longer-term capital access. Building on the city’s business loan
program, consider tools like a revolving loan fund to continue servicing
local business capital needs during recovery and revitalization. Potentially
May 11, 2021 Item #12 Page 7 of 61
weigh how such a resource could target sectors or groups particularly
impacted by the crisis and/or lagging in recovery.
o Promote local businesses. Maintain “shop local” marketing efforts to
promote local businesses, capturing renewed consumer spending.
• Longer-term actions
o Improve connections to regional services. Through tighter coordination –
or even a concierge function – work with partners across the North
County to ensure full awareness of and easier access to available
supports.
o Expand technical assistance. Identify and resource additional common
areas of need, such as workforce or business operations, either by
emerging issue area or type of firm, working through intermediaries and
service providers.
o Create supports for inclusive growth. Promote expansion of minority
chambers to the area and/or seed diverse business advisory groups to
ensure representative assistance reaching all businesses and
entrepreneurs.
o Strengthen sub-regional collaboration on marketing. Consider flexibilities
for a shared North County tourism promotion effort to gain scale and
more efficiently market the distinctive assets of the sub-region.
3. Improve access to talent base and upward mobility within it.
The disparate impacts of the pandemic on different groups of workers and the
challenges employers say they face in rebuilding their workforces reflect gaps in
supports for both talent development and recruitment. More ambitious action to
address these challenges could benefit businesses, workers and the city alike.
• Near-term actions
o Organize industry to strengthen talent pipeline. Consider industry-specific
business alliances, mid-size firm coalitions and new models of technical
assistance for human resources needs to achieve economies of scale in
addressing talent sourcing challenges, including from outside the city.
• Longer-term actions
o Foster pathways to good jobs. Promote programs that build the skills of
incumbent workers, particularly in lower-wage industries, to ensure
pathways from “promising” to “good” jobs, even across sectors.
o Advance job quality. Provide thought leadership and support
interventions that provide incentives to businesses to improve job quality
and address non-talent barriers to workforce participation, such as
childcare.
4. Prepare for future disruptions. Recovery and revitalization must acknowledge the
likelihood of future challenges highlighted by COVID-19. Strategic planning should
consider how to improve long-term resiliency to prepare.
May 11, 2021 Item #12 Page 8 of 61
• Longer-term actions:
o Support small businesses for a changing economy. Work to improve small
business resiliency, including through adoption of digital technology.
o Enhance broadband coverage and access. Work with internet service
providers to improve broadband service to both enable potential
expansion of remote work and support businesses.
o Plan for future industry shifts. Consider impact of macro shifts that were
underscored and accelerated by the pandemic on major Carlsbad
industries such as hospitality and manufacturing, including automation
and digitalization.
Any or all the tactics listed above can be prioritized in the economic recovery phase and in an
economic development strategy coming out of the COVID-19 pandemic. An effective strategy
would incorporate inclusive economic recovery, acknowledge the disparate impacts of the
pandemic on certain businesses and industries, prioritize small business support programs, set
a foundation for smart growth strategies and include broad economic development strategies
necessary for the City of Carlsbad to remain competitive to key industries for the coming
decade.
Pros
• Creates a written economic development strategy with City Council guidance to
achieve a more prosperous and inclusive economy
• Focuses efforts around strategic goals and programs with measurable outcomes
• Sets a foundation to “build back better”
Cons
• Developing an economic development strategy plan will require staff time and
fiscal resources
Ad Hoc City Council Economic Revitalization Subcommittee recommendation
The subcommittee recommended developing an inclusive economic recovery and development
strategy that incorporates the tactics above and sets a long-term vision for economic
development in the city with the goal of creating a more prosperous and inclusive economy.
Fiscal Analysis
The City Council has allocated $5 million to the Economic Recovery and Revitalization Initiative
and there remains adequate capacity in this allocation to continue implementing the programs
authorized by the council. To ensure the program implementation can continue into the next
fiscal year, the City Council can approve the resolution carrying forward the funds committed to
the Economic Recovery and Revitalization Initiative into the next fiscal year. When the council
lifts the local declaration of emergency, staff will return with a consideration of how to use any
funds that remain in the program.
Approximately $150,000 in contingency remains in the funds committed to the Economic
Recovery and Revitalization Initiative. From this source, $100,000 is available to be used to
support the development of an inclusive economic recovery and development strategy.
May 11, 2021 Item #12 Page 9 of 61
Next Steps
Should the City Council give direction to create an economic recovery and development
strategy, staff would initiate outreach with the business community and include any direction
provided by the council.
Should the City Council give direction to create a standing subcommittee focused on economic
recovery and development, staff will return with the necessary actions to sunset the existing
subcommittee and create the new subcommittee.
Environmental Evaluation (CEQA)
This action is not a “project” as defined in California Public Resources Code Section 21065 and
CEQA Guidelines Section 15378(b)(5) because it involves administrative activities of
governments that will not result in direct or indirect physical changes in the environment.
The action being considered is a report that provides an overview of the various actions and
programs that the city has implemented in response to the COVID-19 pandemic and provides a
description of possible future actions that could be considered, which on their own accord will
not cause a significant environmental impact, so this activity is not subject to CEQA under CEQA
Guidelines Section 15060(c)(3).
Public Notification and Outreach
Public notice of this item was posted in accordance with the Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours prior to scheduled meeting date.
Exhibits
1. City Council resolution
2. COVID-19 Inclusive Recovery Assessment and Implications 3. City of Carlsbad Economic Response to COVID-19: Moving to Recovery
May 11, 2021 Item #12 Page 10 of 61
RESOLUTION NO. 2021-114
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING COVID-19 ECONOMIC RECOVERY ACTIONS
WHEREAS, on February 14, 2020, the San Diego County Health Officer declared a Local Health
Emergency as a result of the spread of COVID-19; and
WHEREAS, on March 4, 2020 Governor Newsom proclaimed a statewide state of emergency as
a result of the spread of COVID-19; and
WHEREAS, on March 16, 2020, the Director of Emergency Services proclaimed a local state of
emergency as a result of the COVID-19 pandemic, which the City Council subsequently ratified and
extended; and
WHEREAS, on March 19, 2020, Governor Newsom issued Executive Order N-33-20 directing
individuals living in California to comply with a State Public Health Officer order to stay at home except
as needed to facilitate authorized, necessary activities or to maintain the continuity of operations at
critical infrastructure sectors; and
WHEREAS, on May 4, 2020 Governor Newsom issued Executive Order N-60-20 allowing non-
essential businesses to reopen in four stages in compliance with criteria set by the State Public Health
Officer and based on certain public health criteria being met on a county-by-county basis; and
WHEREAS, on June 19, 2020, dine-in restaurants, alcohol-serving businesses offering dine-in
meals, personal care services businesses and other businesses in the County of San Diego were
permitted to reopen subject to compliance with state issued guidance; and
WHEREAS, on July 13, 2020 a statewide public health officer order was issued closing bars, pubs,
brewpubs, and closing indoor operations of dine-in restaurants, wineries, tasting rooms, family
entertainment centers, movie theaters, zoos, museums, and card rooms; and
WHEREAS, the State of California has issued industry guidance for businesses that are allowed
to reopen that require modification to business operations, which has a direct cost and may have an
impact on the space in which businesses may operate thus impacting revenue; and
WHEREAS on December 6, 2020, the State of California enacted a Regional Stay at Home Order
for Southern California mandating additional closures and modifications for businesses due to ICU
capacity dropping below 15 percent in a region; and
May 11, 2021 Item #12 Page 11 of 61
WHEREAS, the effects of the Regional Stay at Home Order have continued to have an impact on
Carlsbad businesses operations; and
WHEREAS, the City of Carlsbad unemployment rate spiked to 12.3 percent in April of 2020 and
has not yet recovered to the 2019 average of 2.9 percent; and
WHEREAS, the City of Carlsbad conducted surveys of businesses impacted by COVID-19 in
November 2020 and April 2021 and found that 46 percent of companies indicated the need for more
than $25,000 in additional financial relief to maintain operations over the next six months; and
WHEREAS, 66 percent of businesses surveyed indicated that they experienced a revenue
decrease of more than 25 percent due to COVID-19; and
WHEREAS, the City of Carlsbad approved a resolution creating an Ad Hoc City Council Economic
Revitalization Subcommittee on April 7, 2020; and
WHEREAS, the Ad Hoc City Council Economic Revitalization Subcommittee has met 34 times
since it was created and provides input on the city's COVID-19 related economic relief efforts and
recommendations to the City Council; and
WHEREAS, it is in the public interest to take steps to ensure local businesses remain
economically viable during the COVID-19 pandemic state of emergency; and
WHEREAS, public health restrictions on businesses have begun to ease leading with the state
announcing an end to its blueprint for reopening on June 15, 2020; and
WHEREAS, ongoing support for businesses will be crucial as the city moves from an economic
response to the recovery phase of supporting businesses impacted by the pandemic; and
WHEREAS, the COVID-19 Inclusive Recovery Assessment and Implications makes three findings
regarding the city's actions to respond to the economic impact of COVID-19 including that the city
experienced significant impacts, the city's response exceeded comparable cities in some cases, and
improvement across city operations can advance business resiliency, ; and
WHEREAS, the COVID-19 Inclusive Recovery Assessment and Implications concludes that
continued strategic economic development action will be needed to promote a full recovery and
improve the business ecosystem including the preparation of a formal economic development strategy;
and
May 11, 2021 Item #12 Page 12 of 61
WHEREAS, in fiscal year 2020/2021, the City Council committed $5 million in funding from the
city's economic uncertainty set aside to provide support to businesses in response to the economic
impacts of the pandemic; and
WHEREAS, adopting this resolution is necessary and appropriate to mitigate the immediate
threats to the public health, safety, and welfare of residents and local businesses from the significant
economic impacts of the COVID-19 pandemic by supporting economic recovery and ongoing
compliance public health orders.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That the Deputy City Manager for Administrative Services is authorized to allocate
$100,000 of the contingency balance remaining from the initial allocation to the
Economic Recovery and Revitalization Initiative for the development of an economic
recovery and economic development strategic plan.
3.That the Deputy City Manager for Administrative Services is authorized to carry
forward the remaining funds committed to the Economic Recovery and Revitalization
Initiative into Fiscal Year 2021-22.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 11th day of May, 2021, by the following vote, to wit:
AYES: Hall, Blackburn, Acosta, Bhat-Patel.
NAYS: Schumacher.
ABSENT: None.
MATT HALL, Mayor
BARBARA ENGLESON, City derk
(SEAL)
May 11, 2021 Item #12 Page 13 of 61
COVID-19 Inclusive
Recovery Assessment
and Implications
for
Exhibit 2
May 11, 2021 Item #12 Page 14 of 61
Introduction
The impact of COVID-19 and public health responses created an
economic emergency in Carlsbad and other cities and regions around
the country. Like similarly situated local governments, Carlsbad rushed
to respond, deploying a $5 million response package and a host of
other administrative and regulatory actions to reduce the impact on
businesses, workers and residents. While these efforts helped buffer
the impact of the crisis, in tandem with federal and state actions, the
toll for Carlsbad, within the context of the broader San Diego economy,
has nonetheless been significant. The immediate disruptions also
elevated concerns over longer-term issues, such as job quality, remote
work, automation, durability and growth of women and minority-owned
businesses, and the “future of work”.
To that end, earlier this year, the City of Carlsbad engaged an
independent advisory group to undertake an early quantitative and
qualitative review of lessons, in order to objectively inform further action
and the potential to strengthen supports. Based on data reviews, five
stakeholder engagement sessions and a business survey, this analysis
(1) examined COVID-19’s impact on the Carlsbad and metro San Diego
economies, (2) catalogued and assessed the city’s relief interventions in
the context of both broader regional action and national peer practices,
and (3) offered forward-looking insights on implications for economic
development focus and service delivery.
This assessment is based on the “City of Carlsbad Economic Response
to COVID-19: Moving to Recovery” report prepared by Cities GPS
which included extensive business community outreach including, five
stakeholder meetings, collaboration with local and regional business
organizations, and a business survey with over 160 participants.
Altogether, COVID-19’s impact and the response have exposed core economic challenges and opportunities for many cities and metro areas, including Carlsbad, presenting a unique moment for revisiting economic development strategy.
2May 11, 2021 Item #12 Page 15 of 61
Although Carlsbad was not immune to the virus and its
economic contagion, it fared better than the San Diego
region as a whole. Unemployment in the city reached
13.8% in spring 2020 -- a significant increase from the
pre-pandemic level of 2.9%; nonetheless, this trailed
the region’s peak of 15.9%.i Throughout the pandemic,
unemployment in Carlsbad remained lower than the region
and North County neighbors (see Figure 1). The city’s
While Carlsbad overall suffered
a less severe COVID-19-driven
economic downturn than the
broader San Diego region, due to
its industry and demographic mix,
the city still experienced significant
impacts in particular sectors and
groups.
industry mix – with a disproportionately large share of the
region’s manufacturing, innovation and professional firms
alongside hard-hit hospitality, retail and wholesale, and
small businesses – buffered the overall blow despite still
concentrating impact in low-wage sectors (see Figure 2).
Leisure and hospitality – oriented toward segments
including resorts, group travel and overflow from downtown
San Diego – saw the most severe impacts from the crisis,
following regional and national trends. Hotel occupancy
declined precipitously, hollowing out at 30% in April 2020;
as of December 2020, occupancy was down nearly 50%
year-over-year, while as of March 2021 it had improved to
roughly 20% less than pre-pandemic March 2019.ii
Accordingly, many larger companies furloughed significant
numbers of workers and very recently ramped up efforts to
re-staff.
1
While some hospitality companies shifted marketing toward overnight and drive travel, the overall decline in business conferences and tourism, and occupancy caps have constrained a full rebound.
Findings
Figure 1: Unemployment Impacts of COVID-19 in the San Diego Region
Source: California Employment Development Department data
3May 11, 2021 Item #12 Page 16 of 61
needing $250,000 or more.v Attesting to the long tail
of the crisis for these firms, a similar survey deployed in
April 2021 found that nearly 68% of respondents needed
financial assistance in the next six months, with 10%
needing $250,000 or more; 62% of respondents reported
revenue declines exceeding 25%, matching the previous
fall. Still, several stakeholders interviewed also noted
major positive changes forced on their operations, such
as shifts to e-commerce, that generated immediate new
revenue sources and will be sustained after recovery.
In many ways, Carlsbad was more resilient than other
cities, likely owing to its relative affluence, suitability for
remote work, and concentration of knowledge-driven
high-tech and life sciences firms. For instance, home
values in the city grew by 13% over the past year to
reach a median price of $1.02 million in February 2021,
reflecting the ability of wealthy residents to weather the
crisis.vi However, these metrics within Carlsbad obscure
other serious implications for its economic vitality; over
half of the workforce in hospitality, leisure, and retail /
wholesale trade sectors actually live outside the city’s
boundaries.
Effects on life sciences and manufacturing firms were
more nuanced. A survey of North County manufacturers
found uneven – but net positive – impacts across
manufacturing, in which Carlsbad’s concentration of
jobs is about twice the metro average.iii Firms surveyed
in the sub-region added jobs (a total of 770 new jobs)
and expected to increase physical space; however,
43% reported revenue declines.iv Many innovation
economy and manufacturing stakeholders interviewed,
particularly in life sciences, reported continued growth
in 2020, alongside adjustments to operations (e.g. fewer
employees on-site, more virtual meetings and events).
The crisis quickly exposed capacity gaps in banking
relationships and basic business practices. From a city
business survey conducted in November 2020, 63%
of respondents reported a more than 25% decline
in revenue. Nearly 60% of respondents in the same
survey reported needing financial relief within the next
six months, ranging from $10,000 or less to over 11%
For smaller and locally serving firms, COVID-19 presented an existential challenge or an opportunity for a strategic pivot.
Figure 2: Estimated Net Job Losses by Sectors Source: Analysis of California Employment Development Department, SANDAG, and US Census LEHD data, following SANDAG cluster classifications
4May 11, 2021 Item #12 Page 17 of 61
Carlsbad initiated an immediate response to the COVID-19
crisis that paralleled – and in some cases exceeded – many
of the approaches undertaken in comparable cities.1
It spanned the major categories of intervention identified
in a broad national review of peer city interventions:
providing resources and information; offering regulatory
relief; expanding capital access; and aiding workers.
The city worked with intermediaries, such as the Carlsbad
Chamber of Commerce and Carlsbad Village Association,
to leverage networks and target response, likely improving
effectiveness. Although some structural decisions regarding
terms and duration might be reconsidered with hindsight,
the city also actively sought business feedback and
adjusted responses – such as eligibility for its loan program
– in response to evolving needs and conditions. While
it is not possible to make definitive causal claims about
the impact of relief without a formal program evaluation,
Carlsbad’s response appears comparatively comprehensive
and well-designed.
1 Alongside a review of national city responses, Cities GPS examined practices in a
set of comparable cities, located in the Seattle, San Jose, Phoenix, Denver, Tampa
Bay, and Boston metro areas, to better assess Carlsbad’s specific response. These
cities were identified based on similarities in population, industry mix (tech and
innovation and/or tourism economies), and position as an economic hub within a
bigger regional economy having a larger city at its center.
Major Elements of the City of Carlsbad’s
COVID-19 Response
• Established a $4.4 million business loan program
• Contributed funds to a joint tourism and business marketing campaign
• Provided landlord and tenant mediation and renegotiation services, and rent relief on city properties
• Instituted “Joint Communications” to businesses with Carlsbad Chamber of Commerce and Carlsbad Village Association
• Offered resources including directory of assistance, GIS map of open restaurants, and “story map” and economic scan charting city trends and performance
• Provided direct assistance to over 650 businesses
• Suspended commercial evictions for tenants in good standing prior to the emergency, delayed business license fees, halted utility shut-offs, waived utility late fees and offered new flexibility on commercial solid waste services
• Adopted a worker recall ordinance for hotel workers
• Established new temporary flexibility for use of outdoor public space, such as public sidewalks and private parking lots
• Supported local businesses through Shop Local and marketing campaigns
• Employed surveys and webinars to gather business feedback
Response provided by Carlsbad was consistent with national practices and in some cases, exceeded comparable cities.
2
For example, the size of Carlsbad’s business loan program was among the highest of comparable cities examined; that it was capitalized by city funds versus CARES Act resources was distinctive and may have allowed the city to move faster to address the crisis.
5May 11, 2021 Item #12 Page 18 of 61
Access to technical assistance and navigation for
available resources: Small businesses reported that
they had difficulty identifying and navigating the array
of supports across the region, as well as gaps meeting
demand for technical assistance on emerging topics like
pivoting to e-commerce. Intermediary service providers
also recognized that COVID-19 highlighted their own
challenges in reaching businesses and different types of
firms. These findings reflect on fragmentation rather than
quality.
Access to capital: While the establishment of the city’s
own well-capitalized loan fund was a benefit, the fact that
the city offered low-interest loans -- versus the grants or
no-interest loans supplied by the majority of comparable
cities -- meant that businesses needed to start repaying
funds before the crisis fully abated.
Carlsbad also did not target its loan program to specific
sectors or demographic groups, expecting that the size
of the program would allow the city to serve a wide array
of recipients. These program design decisions were made
at the outset of the pandemic, moving ahead of peer
examples and without full knowledge of the duration;
they may nonetheless have affected the fund’s initial reach
and impact. In April 2021, the city adjusted the loan term
for small business loans to 60 months and microloans to
30 months, responding to ongoing recovery needs.
Despite the overall strength of the city’s approach,
local stakeholder feedback and review of national
practices identified potential areas for improvement:
Streamlining of city processes: Stakeholders praised
the flexibilities created in reaction to the pandemic (e.g.
outdoor dining), while also contrasting against historical
challenges navigating city permitting and other regulatory
processes. Specific issues included processing time and
gaps in the communication loop among businesses and
city offices, which could be addressed as lessons from
COVID-19 response.
City communications and information-sharing: Small
business stakeholders noted gaps in learning about
available resources, while also acknowledging efforts like
the City Manager updates. Despite the fact that the city
provided regular joint communications emails with the
Chamber and Village Association and leveraged other
platforms, such as social media and webinars, businesses
expressed interest in more “eye-catching” messages to
break through.
Assessment of needs and
interventions identified efforts
to retain from COVID-19
response, as well as possibilities
for improvement across city
operations and business supports
to advance firm resiliency.
3
6
Like many businesses around the country, stakeholders reported difficulty navigating and securing financial assistance from sources such as federal, state and county funds
May 11, 2021 Item #12 Page 19 of 61
Strengthen communications with businesses:
Conduct a review of city communications with
businesses, including digital analytics, to identify any
ways to better design and target these products.
Longer-term actions
Improve business interface with the city:
Responding to business feedback, reform the business
license application process, permitting and other areas
of business interaction with the city to provide clearer,
customer-friendly service such as: single interface
and simplified processes, clearer communication and
shorter wait times.
Pursue ongoing regulatory flexibilities: Consider
ongoing or permanent adjustments to regulatory
measures eased during the COVID-19 pandemic,
such as outdoor dining.
This likely requires Carlsbad to prepare a formal economic development strategy that takes into account these issues:
• Prioritizing potential activities for maximum return on limited resources;
• Defining the specific role of the city in advancing these changes;
• Aligning with other contributors to fill gaps and eliminate redundancies, reflecting Carlsbad’s distinctive position as the major sub-regional economic and employment hub in North County.
Implications
Looking forward, lessons from COVID-19 indicate that continued strategic economic development
action will be needed to both promote a full recovery and improve the business ecosystem,
particularly extending to sectors, businesses and workers hurt most by the pandemic.
The following are examples of near-term and long-
term ideas drawn from this initial response and
recovery assessment.
Continue to improve and build capacity of city economic development operations: COVID-19 reinforced the imperative of a high-capacity, customer-friendly approach to economic development equipped to quickly identify and respond to business needs. Moving forward, the city should institutionalize and expand modern practices and flexibilities adopted for communicating with and serving businesses.
Near-term actions
Bolster data and research capacity: Building on
the Economic Scan, online “story map,” and other
products, continue investing in data and research
capacity for finely grained business and market
intelligence to proactively identify issues and inform
interventions. For example, adding demographics to
business license applications and other city processes
could offer further insights on trends by race and
gender.
1
7May 11, 2021 Item #12 Page 20 of 61
2 Expand availability and access to business supports at city and regional levels: While
business supports were fundamental to COVID-19
response, the crisis illustrated unevenness in
coverage and access. Closing these gaps can help
promote long-term growth during recovery and
revitalization.
Near-term actions
Advance longer-term capital access: Building on
the city’s business loan program, consider tools like a
revolving loan fund to continue servicing local business
capital needs during recovery and revitalization.
Potentially weigh how such a resource could target
sectors or groups particularly impacted by the crisis
and/or lagging in recovery.
Promote local businesses: Maintain “Shop Local”
marketing efforts to promote local businesses
capturing renewed consumer spending.
Longer-term actions
Improve connections to regional services: Through
tighter coordination – or even a concierge function
– work with partners across the North County sub-
region to ensure full awareness of and easier access to
available supports.
Expand technical assistance: Identify and resource
additional common areas of need, such as workforce
or business operations, either by emerging issue area
or type of firm, working through intermediaries and
service providers.
Create supports for inclusive growth: Promote
expansion of minority chambers to the area and/
or seed diverse business advisory groups to ensure
representative assistance reaching all businesses and
entrepreneurs.
Strengthen sub-regional collaboration on marketing: Consider flexibilities for a shared North
County tourism promotion effort to gain scale and
more efficiently market the distinctive assets of the
sub-region.
Improve access to and upward mobility of talent base: The disparate impacts of COVID-19
on different groups of workers and the challenges
employers report facing in rebuilding their
workforces reflect gaps in supports for both talent
development and recruitment. More ambitious
action to address these challenges could benefit
businesses, workers and the city alike.
Near-term actions
Organize industry to strengthen talent pipeline:
Consider industry-specific business alliances, mid-size
firm coalitions and new models of technical assistance
for human resources needs to achieve economies
of scale in addressing talent sourcing challenges,
including from outside the city.
Longer-term actions
Foster pathways to good jobs: Promote upskilling
of incumbent workers, particularly in lower-wage
industries, to ensure pathways from “promising” to
“good” jobs, even across sectors.
Advance job quality: Provide thought-leadership
and support interventions that provide incentives to
businesses to improve job quality (such as the San
Diego Workforce Partnership’s High Road Kitchens
initiative) and address non-talent barriers to workforce
participation like childcare.
3
8May 11, 2021 Item #12 Page 21 of 61
4 Prepare for future disruptions: Recovery and revitalization must acknowledge the likelihood of future challenges highlighted by COVID-19. Strategic planning should consider how to improve long-term resiliency to prepare.
Longer-term actions
Support small businesses for a changing economy:
Work to improve small business resiliency, including
through adoption of digital technology.
Enhance broadband coverage and access: Work
with internet service providers to improve broadband
service to both enable potential expansion of remote
work and support businesses.
Plan for future industry shifts: Consider impact
of macro shifts underscored and accelerated by
COVID-19 on major city industries like hospitality and
manufacturing, such as automation and digitalization.
Endnotes
i City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021.
ii City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021; City of Carlsbad, Economic Scan, Third Quarter FY 2020-2021, April 2021.
iii“The Future of Manufacturing in North County: An Economic Impact Analysis & Workforce Study,” Innovate78 / San Diego Regional EDC, February 2021, https://sd-regional-edc.maps.arcgis.com/apps/Cascade/index.html?appid=7ce1e49f99fc43e9bcceb6474217f67c#&preview
iv Ibid, Innovate 78 / San Diego Regional EDC.
v City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021.
vi City of Carlsbad, Economic Scan, Third Quarter FY 2020-2021, April 2021.
99May 11, 2021 Item #12 Page 22 of 61
Firm Overview
Cities GPS LLC is an advisory group that brings together diverse topical experts and peer practitioners to help business, government, and civic
stakeholders collaborate on finding and implementing solutions for competitiveness, growth, vitality, and inclusion, anchored in the shared
economic assets of city-regions. Cities GPS focuses on traded sectors, talent, innovation, infrastructure, and governance, combining advanced
research techniques, practical experience, and international networks. Cities GPS organizes multidisciplinary teams tailored to each effort,
drawing from a pool with local, national, and global experience. Collectively, Cities GPS advisors have worked with public and private sector
partners in more than 80 cities, 20 states, and 10 countries.
The analysis, conclusions, and recommendations presented in this report are solely those of Cities GPS, and do not reflect the views of any
organizations or individuals that sponsored or contributed to the work, or with whom the authors are otherwise affiliated. The authors recognize
that the value they provide are based on an absolute commitment to objective, candid, high-quality research and practical problem-solving for
policymakers and the public. All activities or work products reflect this dedication to independence and impact.
Principal Authors
Marek Gootman: Serving as Cities GPS Managing Principal, Mr. Gootman brings 30 years of experience focused on private-public action around
city-regions and economic opportunity. At the Brookings Institution, he currently is a nonresident Senior Fellow, following nine years as Fellow
and Director of Strategic Partnerships & Global Initiatives with the Metropolitan Policy Program, where he advanced application of ideas through
research, demonstration projects, policy promotion, and learning networks. Previously, he was a partner at Patton Boggs LLP where he counseled
local governments and public agencies on policy, programs, and federal advocacy, including seven of the 10 largest US cities. Among other
prior positions, he served in various roles with federal agencies, a bi-state metropolitan planning organization, and the UK government working
on economic development, urban revitalization, cross-sector partnerships, and program delivery reforms. Mr. Gootman earned a law degree
at Georgetown University; Master of Government Administration at the Fels Institute, University of Pennsylvania; and business degree from the
Wharton School, University of Pennsylvania.
Rachel Barker: A strategist, analyst, and storyteller focused on building more innovative, inclusive cities, Ms. Barker has worked with national
and local stakeholders to identify and advance solutions that support economic growth and mobility. Her experience encompasses program
development and assessment, application of evidence and data, and codification of practices with multiple organizations, ranging from Results
for America to the Pritzker Traubert Foundation. Previously, Ms. Barker served as an impact manager, policy analyst, and engagement strategist
at the Brookings Institution, addressing issues like inclusive economic development, global competitiveness, and evaluation. Across these roles,
she has coordinated and contributed to a broad array of applied projects and peer learning cohorts, undertook research, and produced dozens of
reports, blogs, and podcasts. Ms. Barker graduated magna cum laude / Phi Beta Kappa from the Elliott School of International Affairs at George
Washington University.
Acknowledgments
Thank you to the more than 200 Carlsbad businesses and stakeholders that contributed to the development
of this report through stakeholder forums, survey responses, and community conversations.
Special thanks to the following organizations and individuals for contributing data and input that informed this process.
Carlsbad Chamber of Commerce
Bret Schanzenbach, CEO
Carlsbad Village Association
Christine Davis, Executive Director
Visit Carlsbad
Mark Rudyk, Interim Executive Director
San Diego Association of Governments
Ray Major, Chief Economist
Stephanie Guichard, Senior Economist
San Diego North Economic Development Council
Erik Bruvold, CEO
San Diego Regional Economic Development Corporation
Bree Burris, Director of Communications
Eduardo Velasquez, Director of Research
10May 11, 2021 Item #12 Page 23 of 61
Economic Response to COVID-19:
Moving to Recovery
Assessment of Impacts, Interventions, and
Implications
May 2021
Prepared for the City of Carlsbad
Office of Innovation + Economic Development by
Exhibit 3
May 11, 2021 Item #12 Page 24 of 61
CONTENTS
Section Page
Issues and Objectives 3-5
Sidebar: City and regional roles in economic development 4
COVID Impact on Carlsbad and the Region 6-13
•Regional Impact 6
Figure 1: San Diego MSA Employment by Sector 7
Figure 2: Regional Change in Employment by Income Category 8
•Carlsbad Impact 8
Figure 3: Unemployment Rate Comparison in the San Diego Region 9
Figure 4: Carlsbad Estimated Net Job Losses by Industry Cluster 10
Figure 5: Change in Foot Traffic for Hospitality Subsectors 11
Figure 6: Carlsbad Business License Quarter-Over-Quarter Comparison 13
Carlsbad COVID Response and Assessment 14-28
•National Practices 14
•Comparable Cities 16
•Local Response 17
Figure 7: Carlsbad Loan Recipients by Number of Employees 19
Figure 8: Distribution of Loan Recipients by Industry Sector 19
Figure 9: Aggregate Amounts Loaned vs Total Direct Employees of Recipients, by Sector 20
Figure 10: Estimated Job Impacts of Loans by Industry Sector 21
Figure 11: Proportion of Job and Local Tax Impacts of Loans by Industry Sector 21
Figure 12: City of Carlsbad Business Loan Program Overview 22
Figure 13: Carlsbad Loan Program vs Small Business Financial Aid in Comparable Cities 23
•Analysis 24
Sidebar: Inventory of Additional Regional Response 26
IMPLICATIONS 29-31
Appendix: Detailed Review of COVID Economic Development Responses by Comparison Cities 32
Acknowledgements and Firm Background 37
May 11, 2021 Item #12 Page 25 of 61
ISSUES AND OBJECTIVES
Fourteen months ago, the impact of COVID-19 and public health responses created an economic
emergency in Carlsbad and other cities and regions around the country. The impact of multiple stay-at-
home orders and evolving constraints on business operations affected core aspects of the Carlsbad
economy for residents, workers, and firms.
Hundreds of restaurants, shops, and personal service providers in Carlsbad closed, particularly
devastating to small business owners and their employees. Hotels and amusement parks shuttered
doors and furloughed workers. Manufacturers struggled to access global supply chains. Many resident
high-skill knowledge workers adapted to remote status, contrasting with essential workers who exposed
themselves and their families to the virus while struggling to make ends meet on less than self-
sufficiency wages.
Carlsbad and other similarly situated city governments rushed to respond, developing an ad hoc
playbook to match an unprecedented crisis of unknown magnitude and duration. Over a period of
weeks and ultimately months, they developed guidelines, organized relief, designed fund, rallied
networks of partners and intermediaries, and advocated for state and federal aid. In a nationwide scan,
the National League of Cities and Bloomberg Philanthropies tallied at least 2,800 COVID-related policy
actions in just the 100 largest cities.1
While these efforts, in tandem with federal and state actions, helped to buffer the impact of the crisis,
the economic and human toll has nonetheless been severe. Nationally, the “K-shaped recovery” yielded
significant divergence in outcomes for higher-income, more educated workers and those in lower-wage
occupations less suited to remote work. Women left the labor force in significant numbers. Economies
that are particularly concentrated in projected lower-growth sectors – such as leisure, tourism, and
retail versus professional, scientific, and technical services – may face slower recoveries overall.2
Additionally, dramatic shifts in how and where people work during COVID have sparked prognostication
about broader economic disruptions that may be accelerated and enduring. The rise of remote work and
its endorsement by big-name tech companies to mid-size professional service firms have led smaller and
mid-sized cities to look at talent attraction as a way to boost their fortunes.3 Meanwhile, other analysts
counter that the power of economic concentration and urban scale ultimately will return close to pre-
pandemic norms. More directly challenging, a McKinsey Global Institute analysis predicted that COVID
will advance automation and other “future of work” disruptions, particularly for lower-wage positions
and those requiring substantial physical proximity.4 On the other hand, employers currently report labor
shortages and inability to draw workers back, even with some wage increases.
1 National League of Cities and Bloomberg Philanthropies, “America’s Local Leaders Stepped Up in Response to COVID-19,”
https://www.nlc.org/wp-content/uploads/2021/03/COVIDTrackerStaticInfographic.pdf.
2 Mark Muro and Yang You, “In some cities, the pandemic’s economic pain may continue for a decade,” Brookings, March 11,
2021, https://www.brookings.edu/research/in-some-cities-the-pandemics-economic-pain-may-continue-for-a-decade//
3 See, for instance, Richard Florida and Adam Ozimek, “How Remote Work Is Reshaping America’s Urban Geography,” The Wall
Street Journal, March 5, 2021, https://www.wsj.com/articles/how-remote-work-is-reshaping-americas-urban-geography-
11614960100.
4 Susan Lund, et al, “The future of work after COVID-19,” McKinsey Global Institute, February 18, 2021,
https://www.mckinsey.com/featured-insights/future-of-work/the-future-of-work-after-covid-19.
May 11, 2021 Item #12 Page 26 of 61
While the permanence and extent of these shifts remains debatable, COVID impact and response has
exposed both core economic challenges and opportunities for many cities and metro areas. The
impending end of the public health crisis presents a unique moment for revisiting economic
development strategy. Local leaders need to understand how the past year has reshaped their local
industries, changed business practices, and altered demand for workers and skills. They need to consider
how their core strengths and weaknesses are positioned in relation to both projected macroeconomic
shifts and existing threats to long-term economic competitiveness and prosperity. They need to weigh
the effectiveness of their COVID response and what it reveals about their ongoing role in supporting
economic growth and vitality.
The City of Carlsbad engaged an independent advisory group to undertake an early quantitative and
qualitative review of these issues to objectively inform further action and potential to strengthen means
of support.
Based on research that included extensive data reviews, five stakeholder engagement sessions, and a
business survey, this analysis (i) examined COVID-19's impact on the Carlsbad and metro San Diego
economies, (ii) catalogued and assessed the city’s response interventions in the context of both broader
regional action and national peer practices, and (iii) offered forward-looking insights on implications for
economic development focus and service delivery.
In all, the assessment found:
• While Carlsbad overall suffered a less severe COVID-driven economic downturn than the
broader San Diego region, due to its industry and demographic mix, the city still experienced
significant impacts in particular sectors and groups.
• Relief provided by Carlsbad was consistent with national practices and, in some cases, exceeded
comparable cities.
• Assessment of interventions and needs, including stakeholder feedback, identified areas to
retain from COVID response and possibilities for improvement across city operations, business
supports, and firm resiliency.
• To advance these changes, prioritize efforts, and maximize Carlsbad activity as the major sub-
regional economic / employment hub, the city should create an updated, written economic
development strategy that aligns with other North County and regional assets.
May 11, 2021 Item #12 Page 27 of 61
Sidebar: City and regional roles in economic development
Economies function at the regional scale across political jurisdictions – tied together by shared
industry clusters, workforce, infrastructure, innovation assets, and other drivers of competitiveness.
However, appropriate roles and responsibilities for contributing to economic development efforts are
nested at local and regional levels, across public and private actors.
At the regional level with a scope often spanning multiple cities and counties, regional economic
development organizations play a framing and coordinating role in setting common priorities and
delivering programs that require scale. They support both specific industry clusters and shared drivers
of competitiveness (e.g. talent) through regional initiatives, offer region-wide services (e.g. exports
assistance), and market the area as a whole to achieve greater visibility. Regional chambers of
commerce, workforce development boards, universities and community colleges, cluster
organizations, metropolitan planning organizations, and incubators and accelerators, among other
local and regional organizations, often collaborate with EDOs to align and advance priorities,
maximizing limited resources.
City economic development typically plays a more targeted role in supporting business development
and growth, with activities more tied to local relationships and “Main Street” locally-serving firms
versus regional clusters and traded sectors. They contribute to a positive business environment
through zoning, permitting, licensing, and other regulatory processes, and enable site selection and
property development. They often also provide guidance for businesses and may manage city-wide
services such as marketing campaigns. These activities may be carried out in coordination with local
chambers of commerce, downtown associations, or business improvement districts. They are
essential to ensuring local business operations and have a multiplier effect for regional
competitiveness. As the officials closest to local business activity, city-level actors often have greater
knowledge and connections to individual firms, as well as a particularly fine-grained view of economic
challenges and opportunities.
In Carlsbad, the Innovation & Economic Development Department facilitates business services,
including processes for business licenses, bids and contracts, site selection and expansion, and
communicating and gathering input regarding city business policies. Through a customized campaign,
Life in Action, the city markets Carlsbad as a premier destination for skilled talent and entrepreneurs.
With connections to local organizations (such as the Carlsbad Chamber of Commerce and the Carlsbad
Village Association) and regional partners, the city connects local firms to broader resources and
economic opportunities. Over the past year, it has also bolstered its research and data capacity,
including publishing a regular “Economic Scan” product. As described later in this report, the COVID
crisis prompted the city to expand its assistance to businesses, leveraging its existing capacity and
creating new opportunities for impact.
The question for Carlsbad -- and other mid-sized cities -- is what can be best achieved through local
action versus collaborative regional efforts, and how to align strategy, roles, and investment across
invisible boundaries.
May 11, 2021 Item #12 Page 28 of 61
PART 1: COVID IMPACT ON CARLSBAD AND THE REGION
Regional Impact
Carlsbad experienced the COVID economic impact within the context of the broader San Diego region
where, notwithstanding significant assets and strengths, the pandemic had both immediate and ongoing
effects:
• Gross regional product declined between $7 billion and $10 billion in 2020, a 3% to 4.5%
decrease (approaching the region’s 5% decline during the Great Recession).5
• Unemployment quickly spiked following the onset of the crisis in March 2020, reaching a peak
of 15.9% in April, an increase of over ten percentage points from the beginning of the year
(Figure 3).6
• In tandem, the number of jobs available in the region declined; as of March 2021, the region
could count 7% fewer than March 2020.7 Job postings, however, rebounded nearly 14%
between February and March 2021, putting the region above its pre-pandemic level and
suggesting positive momentum.8
• Small businesses regionwide were hit hard; as of March 2021, metro San Diego saw an average
decline of over 25% in small businesses open from a January 2020 baseline.9
At their trough, these trends represented some of the most severe impacts in labor market and
economic activity across the nation’s 53 “very large” metropolitan areas.10 However, improvements in
recent months have put the region near the top of this cohort in the positivity of its current labor
market trajectory.
Underneath these regional trends, a subset of industries bore the worst of the crisis, with implications
differing by locality. (Figure 1) Visitor spending in 2020 halved from the previous year, declining from
$11.6 billion to $5.2 billion, according to the San Diego Tourism Authority.11 As business travel and
tourism to the region’s beaches, resorts, amusement parks, and convention facilities -- a major
economic driver in Carlsbad and other adjacent cities -- dwindled under national stay-at-home orders,
leisure and hospitality businesses bled jobs. Tourism and hospitality accounted for a stunning 52% of the
5 SANDAG, Update to County Board Supervisors, February 19, 2021.
6 California Employment Development Department data.
7 Analysis of Bureau of Labor Statistics' Metropolitan Area Employment and Unemployment data, Metro Recovery Index,
Brookings Institution, https://www.brookings.edu/interactives/metro-recovery-index/, accessed April 2021.
8 Analysis of EMSI data, Metro Recovery Index, Brookings Institution, https://www.brookings.edu/interactives/metro-recovery-
index/, accessed April 2021.
9 Analysis of Homebase data, Metro Recovery Index, Brookings Institution, https://www.brookings.edu/interactives/metro-
recovery-index/, accessed April 2021.
10 Metro Recovery Index, Brookings Institution, https://www.brookings.edu/interactives/metro-recovery-index/, accessed April
2021.
11 SANDAG, “The San Diego Economy COVID-19 Impacts: A Year in Review,”
https://sandag.org/uploads/publicationid/publicationid_4756_28849.pdf, p. 5.
May 11, 2021 Item #12 Page 29 of 61
jobs lost in the region, followed by education (22%) and retail (15%), which all together represented
nearly nine in ten jobs lost.12
Figure 1
Source: SANDAG analysis of California Employment Development Department data.
Alongside disparate industry impacts, not all residents experienced the crisis equally. Declines in
employment varied across income levels and the San Diego region, with working-class areas south and
southeast of the City of San Diego faring the worst and pointing to more significant effects on lower-
wage and diverse workers.13 Further, between March and December 2020, regional workers earning
less than $27,000 saw a 25% decline in employment, vastly exceeding the 6% decline in employment
among workers earning $27,000 to $60,000 and the 3% increase in employment for workers earning
over $60,000.14 (Figure 2) In contrast, median household income within Carlsbad approaches $110,000.
12 SANDAG, Update to County Board Supervisors, February 19, 2021.
13 San Diego Regional EDC, “San Diego’s Economic Pulse: December 2020,” https://www.sandiegobusiness.org/blog/san-diegos-
economic-pulse-december-2020/.
14 SANDAG, “The San Diego Economy COVID-19 Impacts: A Year in Review,”
https://sandag.org/uploads/publicationid/publicationid_4756_28849.pdf, p. 9.
May 11, 2021 Item #12 Page 30 of 61
Figure 2
Source: SANDAG
Carlsbad Impact
Carlsbad, for its part, encountered COVID from an enviable position among mid-sized U.S. cities. With
approximately 25,000 more jobs than resident workers, the city serves as an employment hub for the
north county sub-region.
It includes sector concentrations that generally withstood or even thrived in the COVID economy. The
north anchor of the Greater San Diego innovation and manufacturing economy, it is home to globally-
leading life sciences and tech firms from Viasat to Walmart Labs to independent startups. In fact,
Carlsbad firms like Thermo-Fisher, Genmark Diagnostics, COPAN, and Quidel were responsible for
producing materials needed for COVID response. The city also bested its North County neighbors in first-
round Paycheck Protection Program awards, with 565 applicants receiving at least $150,000.
Thus, while Carlsbad was not immune to the virus and its economic contagion, it fared better than the
San Diego region as a whole. Unemployment in the city reached 13.8% in Spring 2020 -- a significant
increase from the pre-pandemic level of 2.9%; nonetheless, this trailed the region’s peak of 15.9%.15
(Figure 3) Industry mix and workforce demographics -- with a disproportionately large share of the
region’s manufacturing, innovation, and professional firms alongside hard-hit hospitality, retail and
wholesale, and small businesses -- buffered the overall blow, despite still concentrating impact in
particular low-wage sectors.
15 City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021.
Less than $27K $27K - $60K More than $60K
Employment -25%-6%3%
-25%
-6%
3%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
Regional Change in Employment by Income Category
(Mar 2020 -Dec 2020)
May 11, 2021 Item #12 Page 31 of 61
Figure 3
Source: California Employment Development Department data.
At the heart of the recession in January 2021 (latest data available), Carlsbad had lost an estimated net
13,800 (or 17.5%) of non-governmental jobs, but more than two-thirds of those were in tourist-oriented
accommodations, food service, and entertainment, with another 14% in retail and wholesale trade.
Furthermore, over half of the workers in those sectors live outside of the city. Higher-wage jobs in
manufacturing and professional services categories tracked much lower impact on employment losses at
3% and 6% of their base, although the absolute numbers were notable due to the concentration of
those sectors in the city compared to the region. (Figure 4)
Likely reflecting these trends, the city has seen a decline in industrial vacancies, alongside an increase in
retail vacancies; commercial vacancies have been stable, perhaps owing in part to a moratorium on
commercial evictions.16
16 City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021.
May 11, 2021 Item #12 Page 32 of 61
Figure 4
Source: Analysis of California Employment Development Department, SANDAG, and US Census LEHD data,
following SANDAG cluster classifications
Following national and regional trends, hospitality and leisure -- oriented towards segments including
restaurants, resorts, group travel, and overflow from San Diego -- saw the most severe impacts from the
crisis. Restaurant sales tax receipts by the city through the third quarter of 2020 experienced year-over-
year declines of more than 25% for full-service and 60% for fast food. Hotel occupancy declined
precipitously, hollowing out at 30% in April 2020; as of December 2020, occupancy was down nearly
50% year-over-year, while as of March 2021 it had improved to roughly 20% less than pre-pandemic
March 2019.17
These outcomes also are reflected in data tracking foot traffic changes across hospitality business
segments of accommodations, food, and recreation. (Figure 5) They suggest relative impacts and trends
based on subsector, seasonality, and COVID public health orders.
While some hospitality companies shifted marketing towards overnight and drive travel, the overall
decline in business conferences and tourism and occupancy caps have constrained a full rebound.
Accordingly, many larger companies furloughed significant number of workers and only very recently
ramped up efforts to restaff.
17 City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021; City of Carlsbad, Economic
Scan, Third Quarter, FY 2020-2021, April 2021.
May 11, 2021 Item #12 Page 33 of 61
Figure 5
Source: Analysis of Safegraph data
Effects on life sciences and manufacturing firms were more nuanced. Based on city sales tax receipts,
business segments such as biotechnology, chemical products, and semiconductors actually increased
their year-over-year activity by between 100% and 200% for the third quarter of 2020. Other categories
of light industry remained relatively flat or experienced moderate reductions of up to 15%, but with a
positive trajectory toward recovery.
Furthermore, a survey of North County manufacturers found uneven -- but net positive -- impacts across
manufacturing, in which Carlsbad’s concentration of jobs is about twice the metro average.18 While 43%
of the firms surveyed in the sub-region had experienced COVID-related revenue declines, the survey
sample actually added net jobs (for a total of 770) and expected to increase physical space.19
Innovation economy and manufacturing stakeholders interviewed, particularly in life sciences, also
reported continued growth in 2020, alongside adjustments to operations (e.g. fewer employees on-site,
more virtual meetings and events). Several companies explicitly noted new investments in R&D and
expanded employment in the city, even as the pandemic reduced attrition. While stakeholders
highlighted the negative effects of missing in-person events on collaboration and networking, many
indicated potential for permanent changes to their physical operations and work patterns, such as the
possibility of distributed workplaces and shifting more space to R&D versus on-site workers. This group
was most likely to consider COVID-motivated trends related to remote work and/or talent relocating to
less expensive, non-coastal locations.
18 “The Future of Manufacturing in North County: An Economic Impact Analysis & Workforce Study,” Innovate78 /
San Diego Regional EDC, February 2021, https://sd-regional-edc.maps.arcgis.com/apps/Cascade/index.html?appid=7ce1e49f99fc43e9bcceb6474217f67c#&preview.
19 Ibid.
May 11, 2021 Item #12 Page 34 of 61
For small and medium-sized businesses, particularly in retail, COVID presented an existential challenge
and an opportunity for a strategic pivot. Comparisons of city sales tax across retail through the third
quarter of 2020 showed stability or rapid rebound in general merchandise, home furnishing, and drug
stores; it also revealed sustained declines in many significant categories, ranging from about 30% for
specialty stores to nearly 70% in personal services.
From a city business survey conducted in November 2020, 63% of respondents reported a more than
25% decline in revenue. Nearly 60% of respondents in the same survey reported needing financial relief
within the next six months, ranging from $10,000 or less to over 11% needing $250,000 or more.20
Attesting to the long tail of the crisis for these firms, a similar survey deployed in April 2021 found that
nearly 68% of respondents needed financial assistance in the next six months, with 10% needing
$250,000 or more; 62% of respondents reported revenue declines exceeding 25%, almost matching the
previous fall.
In particular, the crisis quickly exposed capacity gaps of smaller businesses in retail and service
categories, lacking basic business practices existing banking relationships. Both businesses and support
intermediaries identified COVID impacts revealing need for assistance on fundamentals among
established smaller firms, not just start-ups, for stability and adaptation. Additionally, the categories of
what constitutes fundamentals those basics evolved to include some new categories, such as adoption
of digital tools.
Still, several stakeholders interviewed also noted major positive changes forced on their operations,
such as shifts to e-commerce, that generated immediate new revenue sources and will be sustained
after recovery. While this experience may have been more common among higher-capacity, digitally-
savvy businesses that encountered COVID with an existing degree of resilience, it also extended to
several small retail and production operations that found new markets beyond the storefront.
Small businesses (including restaurants) and leisure and hospitality companies alike identified rebuilding
their talent base as an ongoing challenge. Several suggested this may be attributable to ongoing
enhanced unemployment assistance and benefits that made it uneconomical for workers to return,
despite some employers raising wages in response. The talent squeeze in COVID response suggested
areas where these firms might find benefit in focused support to facilitate access and efficiencies by
aggregating demand for worker identification and training.
Relative business license activity is a solid indicator of overall recovery for the city, with the first quarter
of 2021 returning to virtually the same level as 2020, substantially rebounding from midyear dips.
(Figure 6) However, the notable uptick in licenses for businesses in residences and outside of Carlsbad
reinforces COVID-inspired trends in many similarly situated cities for remote and home-based work, as
well as entrepreneurship forced by changed economic circumstances. The extent to which these trends
will continue at this level is debatable, but the sectoral and asset mix of Carlsbad suggests that economic
20 City of Carlsbad, Economic Scan, Second Quarter FY 2020-2021, January 20, 2021.
May 11, 2021 Item #12 Page 35 of 61
Figure 6
Source: Carlsbad Economic Scan, April 2021
development efforts should track and prepare for some ongoing impacts to the business, real estate,
and talent base in terms of supports.
By many other metrics of local vitality, Carlsbad was more resilient than other cities, likely owing to its
relative affluence, suitability for remote work, and concentration of knowledge-driven high-tech and life
sciences firms. For example, through the pandemic, home values in the city grew by 13% over the past
year to reach a median price of $1.02 million in February 2021, reflecting the ability of wealthy residents
to weather the crisis.21
However, those measures within Carlsbad obscure other serious implications for its economic durability
and factors that drive employment and tax base; over half of the workforce in hospitality, leisure, and
retail / wholesale trade sectors actually live outside the city’s boundaries.
21 City of Carlsbad, Economic Scan, Third Quarter FY 2020-2021, April 2021.
May 11, 2021 Item #12 Page 36 of 61
PART 2: CARLSBAD COVID RESPONSE AND ASSESSMENT
National Practices
The rapid COVID-driven lockdowns and closures in March 2020 sparked a near-immediate response
from cities across the country in areas ranging from economic development to housing, health, and
emergency management, reinforced by further actions throughout the year. Responses varied based on
city size, resources, and direct access to federal distributions.
However, most cities undertook interventions in four common areas, leveraging their core economic
development tools -- knowledge of local business ecosystems and networks; control over local
regulatory levers and taxes; and relationships with intermediaries -- to help businesses understand,
navigate, and survive both the immediate and enduring crisis:
• Information Sharing and Technical Assistance: Many cities developed or expanded online
resource pages compiling public and private resources; established enhanced communications
with businesses, such as newsletters and webinars; offered guidelines for re-opening and other
key milestones; developed marketing campaigns to support local restaurants and other small
businesses; and assessed ongoing impact through surveys or other data collection to guide
development and targeting of assistance.22 Some also offered more expansive technical
assistance, ranging from “hands-on” individualized counseling to webinars.
• Regulatory Relief: Cities consistently offered flexibility and assistance on city-imposed
regulations and taxes, including deferring taxes and providing relief on utility payments. Many
provided particular flexibility for restaurants, such as enabling outdoor dining and removing
some limits on alcohol service.
• Capital: Programs and funds providing business grants and loans to fill gaps or supplement
federal and state assistance were one of the most significant areas of aid. Models and organizing
principles ranged, reflecting factors such as local resources and capitalization, institutional
capacities, and partnerships.23 National reviews have identified five distinct categories: (i) city
government funds; (ii) public entity funds operated by economic development and other quasi-
public groups or public authorities; (iii) philanthropic funds; (iv) financial institution funds,
typically managed by CDFIs or local and regional banks; and (v) business chamber funds.24 The
time horizon focus ranged from immediate response (March or April 2020) to mid-term survival
(three months) and longer-term institutionalization; many cities evolved to employ multiple
approaches, and duration depended on grant versus loan structures.25 Often backed by federal
Economic Development Administration funding, some cities – including the City of San Diego –
adopted revolving loan funds that may offer permanent value.
22 Phil Berkaw, ”Five Ways Local Governments are Supporting Small Businesses During COVID-19,” National League of Cities,
April 14, 2020, https://www.nlc.org/article/2020/04/14/five-ways-local-governments-are-supporting-small-businesses-during-
covid-19/.
23 Bruce Katz, Colin Higgins, Michael Saadine, Florian Schallol, ”Saving Small Businesses: Emerging Typologies of Local Relief
Funds,” Nowak Metro Finance Lab, Drexel University, https://drexel.edu/nowak-lab/publications/reports/Covid-Emergency-
Fund-Typologies/.
24 Ibid.
25 Ibid.
May 11, 2021 Item #12 Page 37 of 61
Specific to city-operated funds, programs included grants and low-interest loans and microloans.
Reaching local businesses and networks was often a challenge to strategically targeting and
dispersing funds, so partnering with intermediaries having existing familiarity with the market
became critical to effectiveness. This market intelligence was an advantage of funds operated by
economic development organizations, Community Development , Chambers, public authorities,
and other externally-facing groups.26 Ultimately, several cities contracted with or granted to
those entities to deliver the assistance. Across types, the scale of the crisis and immediacy of
launching responses prompted quick -- although somewhat uniform -- decisions regarding fund
targeting, eligibility, applications, and other elements of program design; more formal
evaluations will be needed to empirically determine the efficacy of different approaches.27
• Workforce / Talent: As unemployment skyrocketed, a smaller number of cities developed
approaches to stabilize and support local workers and encourage a return to the labor market.28
Charlotte, NC’s Open for Business initiative included workforce readiness and job training
components focused on providing services to displaced workers and facilitating training and
paid work-based learning cohorts in in-demand fields.29 Philadelphia’s Workforce Respond and
Recharge initiative established a comprehensive, racial equity-focused effort to address both
short-term unemployment and achieve longer-term talent development objectives.30 The most
ambitious approaches included implementing employment programs focused on public service
activities to support displaced workers.31
Nationally, firms owned by diverse entrepreneurs and owners significantly lagged white-owned
businesses in accessing resources from the Paycheck Protection Program despite, on average, starting
with lower cash reserves.32 As the uneven impacts of the pandemic on non-white and female residents,
workers, and businesses became more evident and differential access to response became apparent,
jurisdictions also adopted efforts to ensure equity. For instance, Energize Colorado, a non-profit-run
fund partially capitalized by the state of Colorado, included a preference for women-owned, minority-
owned, veteran-owned, and rural businesses.33
26 Ibid.
27 Ibid.
28 Martha Ross, Suzanna Fritzberg, Josh Carpenter, and Sarena Martinez, ”Local service corps can address unemployment and community need,” Brookings Institution, July 23, 2020, https://www.brookings.edu/research/local-service-corps-can-address-unemployment-and-community-need/.
29 Reniya Dinkins, ”A two-part plan for saving Charlotte, N.C’s small businesses,” Brookings Institution, July 23, 2020, https://www.brookings.edu/research/a-two-part-plan-for-saving-charlotte-n-c-s-small-businesses/.
30 City of Philadelphia, “Workforce Respond and Recharge: 2021 Commitment,” https://www.phila.gov/media/20210209160115/Workforce_Respond_Recharge_2021_Commitment.pdf. 31 Martha Ross, Suzanna Fritzberg, Josh Carpenter, and Sarena Martinez, ”Local service corps can address
unemployment and community need,” Brookings Institution, July 23, 2020,
https://www.brookings.edu/research/local-service-corps-can-address-unemployment-and-community-need/.
32 Sifan Liu and Joseph Parilla, “New data shows small businesses in communities of color had unequal access to
federal COVID-19 relief,” Brookings Institution, September 17, 2020, https://www.brookings.edu/research/new-
data-shows-small-businesses-in-communities-of-color-had-unequal-access-to-federal-covid-19-relief/.
33 Reniya Dinkins and Michael Zhu, ”Overcoming bias in small business relief,” Brookings Institution, February 16,
2021, https://www.brookings.edu/research/overcoming-bias-in-small-businesses-relief-in-colorado/.
May 11, 2021 Item #12 Page 38 of 61
Comparable Cities
To better assess Carlsbad’s specific response, a set of comparable cities was identified based on
similarities in (i) population, (ii) industry mix, featuring tech/innovation, tourism, and/or advanced
manufacturing, and (iii) position as a major economic hub within a bigger regional economy having a
larger city at its center:
San Jose Region
• Cupertino, CA (pop. 59,276)
• Mountain View, CA (pop. 82,739)
• Santa Clara, CA (pop. 130,365)
Seattle Region
• Bellevue, WA (pop. 148,164)
• Everett, WA (pop. 111,475)
• Kirkland, WA (pop. 93,010)
• Redmond, WA (pop. 69,900)
Phoenix Region
• Gilbert, AZ (pop. 254,114)
• Scottsdale, AZ (pop. 258,069)
• Tempe, AZ (pop. 195,805)
Others
• Boulder, CO (pop. 105,673) - Denver Region
• Cambridge, MA (pop. 118,927) - Boston Region
• Clearwater, FL (pop. 116,946) - Tampa Region
Recognizing the inherent differences in resources available to larger versus smaller cities, these areas
typically adopted many elements of the national playbook. (Review was based on information available
on city websites as of February through April 2021). However, their responses also diverged or were
particularly notable in several areas, offering potential lessons and insights:
• Size, Design, and Capitalization of Financial Assistance: The comparable cities weighted
towards offering grants versus loans. Most capitalized funds with CARES Act funding, corporate
or philanthropic donations, or even crowdsourcing versus existing city funds. (Carlsbad
dedicated city funding; this may have allowed the city to move faster versus waiting for
additional tranches of funds). Others created models stacking multiple distinct funding
opportunities (Cambridge, MA) or layered financial assistance with other services, such as
technical assistance (as in Redmond, WA and Clearwater, FL).
• Targeting of Financial Assistance: While all comparable cities set basic guidelines for financial
assistance number of employees, gross annual revenue, presence in the city, etc.) and
emphasized response to COVID impact, a smaller number more specifically targeted assistance.
For its small business grant program, Tempe, AZ prioritized businesses in NAICS codes
particularly affected by COVID. Santa Clara, CA offered larger grants to non-essential businesses,
presumably unable to operate, than essential businesses that were open to generate some
income. Redmond stated a preference for “demonstrating actions and plans to pivot your
business during this pandemic,” suggesting a focus on business resilience.34
• Focus on Diversity and Racial Equity: A subset of comparable cities set formal or informal goals
for directing relief to demographic groups hit hardest by the pandemic. Tempe aimed to allocate
20% of its small business grants to minority, veteran, and women-owned businesses. Redmond’s
small business grant fund prioritized “qualifying as a diverse business that can demonstrate
34 OneRedmond, “Redmond Small Business Resiliency Grant Fund – Phase 1,” https://oneredmond.org/redmond-small-
business-grants/.
May 11, 2021 Item #12 Page 39 of 61
ownership by underrepresented groups including, but not limited to, veterans, minorities and
low-income men and women.”35 In Cambridge, two programs provided preference for women
and minority-ownership and HUD-eligible businesses; an online dashboard created by
Cambridge to track all of its COVID small business financial assistance programs also included
demographic data.
• Support for Workers: A subset of comparable cities also provided direct supports for workers
beyond references to other available resources in directories. At the most basic level, Santa
Clara instituted a worker recall ordinance requiring employers to re-hire building service, food
service and hotel service workers displaced by the pandemic. Gilbert, AZ subsidized limited
worker retraining in the Maricopa Community Colleges system as part of a three-part recovery
program.
• Regional Collaboration and Partnerships: Virtually all comparable cities partnered with local
Chambers and downtown associations to collect business intelligence and disseminate
information, and joined with additional institutions and/or fiscal agents to build and administer
small business funds. However, Greater Seattle’s Eastside area (including Bellevue, Kirkland, and
Redmond) appears to have collaborated particularly strongly to deliver a sub-regional response.
This includes the establishment of a new sub-regional effort, OneEastside, and joint investment
on technical assistance.36
• Other Notable Approaches: Further interventions ranged from basic sector-targeted programs
to innovative delivery of business support services. For example, Santa Clara adopted an
ordinance limiting app delivery fees for restaurants and Boulder, CO subsidized delivery from
local restaurants. Gilbert and Scottsdale, AZ provided a more robust technical / business
assistance through a virtual small business assistance center.
A detailed review of each comparable city’s response is provided in the Appendix.
Local Response
Carlsbad initiated an immediate response to the COVID crisis that paralleled -- and, in some cases
exceeded -- many of the approaches undertaken in comparable cities.
To meet the crucial need for clear, consistent guidance and information for businesses, the city and
partners at the Carlsbad Chamber of Commerce and Carlsbad Village Association launched a series of
“Joint Communications” to area businesses on March 17, 2020. Drawing on the shared expertise and
networks of these organizations, this digital communication continues to regularly share updates on
available funding sources, updates on health advisories, and other information with local businesses.
The city also established a centralized, regularly-updated business resources page on its website
consolidating information on loans and other financial assistance, guidelines, webinars and other tools.37
35 Ibid.
36 See OneEastside, https://oneeastside.org/about/ and (re)STARTUP425, https://re.startup425.org/.
37 See City of Carlsbad, “Business Resources,”
https://cityadmin.carlsbadca.gov/services/depts/fire/emergency/business.asp.
May 11, 2021 Item #12 Page 40 of 61
A newly-established quarterly “economic scan” and online ”story map” provided additional ongoing
updates on the city’s economic performance.
The city also took administrative action. On March 17, 2020, the City Council declared a state of
emergency. By April 7, the city suspended commercial evictions for tenants in good standing prior to the
emergency; the city also delayed business license fees, halted utility shut-offs, waived utility late fees,
and offered new flexibility on commercial solid waste services. As of June 10, the city established new
temporary flexibility for use of outdoor public space, such as public sidewalks and private parking lots.
Later in the year, the City Council passed a hotel worker recall ordinance, providing protections to hard-
hit leisure and hospitality workers.
Significantly, on April 21, 2020, the City Council approved a $5 million COVID response package, one of
the largest in the sample of comparable cities 38 This primarily consisted of a $4.4 million business loan
program (Figure 13). It also provided $250,000 for a joint tourism and business marketing campaign to
be delivered in coordination with the Carlsbad Chamber of Commerce, Carlsbad Village Association, and
Visit Carlsbad; $50,000 in funding for landlord and tenant mediation and renegotiation services; and
$50,000 to support rent relief on city properties. The remaining $250,000 was reserved for other activity
at the direction of the City Council.
Additional interventions to bolster local businesses and restaurants followed. The city and partners
created and publicized a GIS map of establishments open for takeout and delivery. A Shop Local
campaign, “Gift Carlsbad,” encouraged residents to purchase gift cards for local businesses by providing
a bonus supplement on top of the purchase; ultimately more than 2,000 gift cards were purchased,
totaling over $88,000 in support for local businesses. A marketing campaign, #StaySafeStayOpen,
promoted compliance with social distancing, mask-wearing, and other COVID protocols to keep infection
levels low enough to maintain local operations; a related #MaskUp campaign targeted tourists. Another
marketing effort, “Carlsbad is Calling,” promoted visits to the city from local “staycation” travelers.
Throughout the year, city action was guided by business input and feedback. In April 2020, the City
Council established a special city council economic revitalization committee tasked with gathering
business input. Business surveys (in June, October / November, and April) and a series of webinars co-
hosted with the Carlsbad Chamber of Commerce and Village Association also served as forums for needs
identification and feedback on city response.
That input, in part, informed additional city actions and adaptations of relief programming. This included
new flexibilities introduced to the city’s business loan program over the summer of 2020 and in January
2021, expanding eligibility to larger businesses and increasing the loan limit. The city also extended its
outdoor activation initiative over summer 2020 to enable restaurant “curb cafes” in public parking areas
and instituted a retroactive fee holiday for outdoor activation permits.
As the largest Carlsbad program investment, loan fund performance requires specific consideration.
Overall loan availability exceeded uptake, likely due to eligibility and terms. Of the $4.4 million
capitalization, just over $1.55 million was issued through 77 active loans (as of April 2021), or 35% of
available financing, with some still pending. Additionally, 14 applications were denied and 33 were
38 City of Carlsbad News Updates, “Apply for a business loan,” July 22, 2020,
https://cityadmin.carlsbadca.gov/news/displaynews.asp?NewsID=2177.
May 11, 2021 Item #12 Page 41 of 61
withdrawn; collection of additional information on the basis for those denials or withdrawals would be
needed through case-by-case contacts to determine whether they reflected firm capacity constraints,
program structure, or changed circumstances.
The vast majority of executed loans went to very small businesses, with more than 75% allocated to
firms employing five people or less. At either end of the spectrum, 23 recipients reported only one
employee while three recipients had 20 or more workers. (Figure 7)
Figure 7
Source: Analysis of city loan data
Organized by industry sector, the proportion distributed by the number of loans and amount loaned
were virtually identical. (Figure 8) As expected given the disparate sector impacts of COVID, roughly half
of the loans went to recipients in hospitality and retail. More surprisingly, business support and
professional services received 20% of the loans, slightly exceeding the number to restaurants and
accommodations; these likely reflected a concentration of office and administrative activities disrupted
by remote work.
Figure 8
.
May 11, 2021 Item #12 Page 42 of 61
A moderate difference in sector lending emerged based on direct employment by recipients. (Figure 9)
Hospitality businesses represented 17% of the loans made by number and amount, but employed 24%
of all workers among firms receiving assistance. The higher proportion in hospitality direct employment
took share from education and social services.
Figure 9
Precisely gauging loan program impact on economic and employment outcomes is very challenging due
to limits on data collection and external influences on loan recipient businesses. Comparable cities’
programs typically tracked fund distributions by firm characteristics or locations as a proxy for
performance.
However, conservative assumptions about job preservation by firm size and loan amount can be
combined with employment “multipliers” for industry subsectors. These scenarios forecast the ripple
effects on job creation through business-to-business transactions and workers spending new income, as
well as local business tax revenues generated. Industry multipliers vary widely depending on whether
the business is locally-serving or trades outside of the region; for example, at a beauty salon has a 1.26
multiplier effect versus semiconductor manufacturer at 2.63, with each job preserved generating nearly
twice as many others.
May 11, 2021 Item #12 Page 43 of 61
Figure 10
Applying these methods, the estimated multiplier impact from the 77 executed loans ranges from
preserving 185 to 215 jobs, and $975,000 to $1.08 million in annual local tax revenue. (Figure 10)
Distribution of these results by industry sector differs substantially from the amount of loans allocated,
reflecting the varying contributions to economic metrics like employment, value-creation, job quality,
and tax base. (Figure 11)
Figure 11: Proportion of Job and Local Tax Impacts of Loans by Industry Sector
For example, support to hospitality businesses comprised 17% of the loans made and total amount lent,
plus 32% of direct employment, yet they represented only 14% of all jobs while generating an enormous
54% of local tax revenues preserved. Manufacturing accounted for 8% of loans and lending, but 13% of
May 11, 2021 Item #12 Page 44 of 61
jobs impacted and 17% of taxes. Meanwhile, retail encompassed about 30% of the number and amount
of loans made compared to 25% of jobs and 12% of tax preserved.
Given the diversity of loan criteria, structures, timing, and other factors, these results cannot be
compared against programs in other cities. However, assuming reasonable repayments, the job and
fiscal benefits of the loan program indicate a solid return on investment.
Figure 12: City of Carlsbad Business Loan Program Overview
Element Description
Timing Initially launched in early May 2020. Expanded eligibility announced in August 2020 and
January 2021.
Size /
Capitalization
$4.4 million in city funds
Award Amount Offered small business recovery loans of $10,000 to $50,000 and microloans of $5,000 to
$10,000. (Initially, small business loans were capped at $25,000).
Eligibility
Criteria /
Targeting:
Small business recovery loans were available to businesses employing 50 or fewer
individuals and generating $5 million or less in gross revenue (initially set at $3 million).
Microloans were available to businesses employing 15 or fewer individuals and generating
$2 million or less in gross revenue. Eligible businesses could apply for both and/or multiple
awards, up to $60,000 in total.
Awardees were required to hold a city business license in good standing (for at least six
months, expanded from one year) and be in compliance with city health orders. Chain
businesses / franchises could not access the program unless they had a business owner in
residence in San Diego County.
COVID impact, credit score, and bankruptcy within three years were considerations in
reviewing applications.
Terms Eligible uses were limited to “operational expenses such as rent, payroll, mortgage interest
and utilities,” not covered by any federal assistance received.
Interest on small business loans was set at 2% if paid back within 12 months and 3% if paid
back within 30 months, with the option to defer a first payment by up to 180 days (initially
90 days).
Interest on microloans was set at 0% if paid back within 6 months, 1% if paid back within 12
months, and 2% if paid back within 18 months, with the option to defer a first payment by
up to 180 days (initially 90 days).
In April 2021, the city adjusted the loan term for small business loans to 60 months and
microloans to 18 months.
Application
Process
Applicants submitted a web-based form to the city collecting basic business data,
information on COVID impact and other assistance applied for, a bank statement, and
interim financial statement.39
Partnerships The city engaged a non-profit lending organization, CDC Small Business Financing, to service
the program.
39 City loan application: https://www.surveymonkey.com/r/J6RNTJB.
May 11, 2021 Item #12 Page 45 of 61
Figure 13: Carlsbad Loan Program vs. Small Business Financial Aid in Comparable Cities*
City** Form Fund Size Source Award Amount Launch***
Carlsbad, CA Loan $4.4 million City Small business loans: $10,000-$50,000 (initially
capped at $25,000) Microloans: $5,000-$10,000
May 2020
San Jose Region
Cupertino, CA Grant $185,000 CARES $5,000 July 2020
Mountain View, CA Both Grant: $250,000
Small business loan:
$1+ million
Landlord loan:
$100,000
Corporate /
philanthropy
(small business
loans); City
(landlord loans).
Grant: $5000
Small business loan: up to
$10,000
Landlord loan: up to $5,000
Grant: Feb 2021
Loans: April 2020
Santa Clara, CA Grant $1.7 million City, CARES,
crowdsourcing
Non-essential business:
$10,000
Essential business: $5,000
April 2020
Seattle Region
Bellevue, WA Grant $600,000 CARES ($185,000);
other sources n/a
$5,000 August 2020
Everett, WA Grant $1.84+ million CARES $10,000-$20,000, depending
on business size
April 2020
Kirkland, WA Grants Phase 1: $461,000
Phase 2: $1+ million
Phase 1: donations
by Google.org,
City, and others
Phase 2: CARES
Phase 1: $1,000-$1,200
Phase 2: $5,000
Phase 1: March
2020, reset
August 2020
Phase 2:
September 2020
Redmond, WA Grant $1.825 million CARES Phase 1: up to $10,000 Phase 2 & 3: up to $7,500 First phase launched August 2020
Phoenix Region
Gilbert, AZ Both Grant: $11 million Loan: $5 million CARES Grant: up to $35,000 Loan: $10,000-$50.000 Fall 2020
Scottsdale, AZ Grant $3.3 million
CARES Up to $5,000
(reimbursement basis)
August 2020
Tempe, AZ Grant $1.1 million City (specific source n/a) Up to $10,000 (depending on number of employees) October 2020
Other Regions (Denver, Boston, Tampa)
Boulder, CO Grant $675,000 CARES n/a August / September 2020
Cambridge, MA Both $4.2+ million
CARES/CDBG;
Cambridge
Redevelopment
Authority;
donations to
disaster fund
Grant: $10,000 (later
adjusted to $6,000)
Loan: $15,000
Spring 2020
Clearwater, FL Grant $4 million City / CARES Office / Store: $5,000 Home-Based: up to $2,000 May 2020
* Based on review of city websites, April 2021
** Listed in order of population size
*** Many programs had multiple rounds; this refers to the first identifiable date.
May 11, 2021 Item #12 Page 46 of 61
Analysis
Overall, the city’s COVID response was consistent with national trends and, in some cases, exceeded
that of comparable cities. Carlsbad’s response -- including providing resources and information;
promoting local businesses; offering regulatory relief; and creating financial support -- spanned most
major categories identified in analysis of programs and practices.
While it is not possible to make definitive causal claims about the impact of relief without a formal
program evaluation, Carlsbad’s response appears comparatively comprehensive and well-designed. The
size of Carlsbad’s business loan program was among the highest of comparable cities examined; the fact
that it was capitalized by city funds versus CARES Act resources was distinctive and may have allowed
the city to move faster to address the crisis. The city worked closely with other intermediaries, such as
the Carlsbad Chamber of Commerce and Carlsbad Village Association, to leverage networks and target
response, likely improving effectiveness. Although some structural decisions regarding terms and
duration might be reconsidered with hindsight, the city also actively sought business feedback and
evolved responses -- such as eligibility for its business loan program -- adapting to changing needs and
conditions.
Nonetheless, stakeholder input and review of comparable / national practices identified several
potential areas for improvement:
• Streamlining of City Processes: Stakeholders praised flexibilities created in reaction to the
pandemic (e.g. outdoor dining), while contrasting against historical challenges navigating city
permitting and other regulatory processes. Specific issues included processing time and gaps in
the communication loop among businesses and city offices, which could be addressed as lessons
from COVID response.
• City Communications and Information-Sharing: Small business stakeholders noted gaps in
learning about available resources, while also acknowledging efforts like the City Manager
reports. Despite the fact that the city provided regular and comprehensive joint
communications emails with the Chamber and Village Association, and leveraged other
platforms such as social media and webinars, businesses expressed interest in more “eye-
catching” messages from the city to break through. The city may want to review analytics for its
current communications products to further refine its targeting and outreach strategy.
• Access to Technical Assistance and Navigation for Available Resources: Small businesses
reported difficulty in identifying and navigating the array of supports across the region, as well
as gaps meeting demand for technical assistance on emerging topics like e-commerce and digital
tools. These findings reflect fragmentation and scale, rather than quality. Intermediary service
providers also recognized that COVID highlighted their own challenges in reaching businesses
and different types of firms, including women or minority-owned firms. Multiple stakeholders
noted the utility of working with city staff, but total assistance offered (reaching 650 businesses)
likely was still limited by availability and other responsibilities. Several cities in the comparison
sample, such as Scottsdale, Gilbert, and Clearwater, offered more comprehensive technical
assistance, including through web-based platforms and/or as a component of grant programs.
• Access to Capital: Like many businesses around the country, stakeholders reported difficulty
navigating and securing financial assistance from sources such as the Paycheck Protection
May 11, 2021 Item #12 Page 47 of 61
Program, as well as other federal, state, and county funds. These revealed limited banking
relationships among certain types of firms and owner demographics. More technical assistance
may have helped businesses understand the landscape of available options and prepare quality
applications, including provision of legal and accounting support; one local business
intermediary noted applicants with balance sheets “on the back of legal pads.” Such support
could be an important gap to focus on after COVID recovery.
Although speedy establishment of the city’s own well-capitalized loan fund was a certain
benefit, early program design decisions likely affected the fund’s reach and impact. These
choices were made ahead of many peer examples at the outset of the pandemic, without a full
understanding of scope and duration. The structure of low-interest loans -- versus the grants or
no-interest loans supplied by the majority of comparable cities -- meant that businesses needed
to start repaying funds before the crisis fully abated. Carlsbad also did not target its loan
program to specific sectors or demographic groups, anticipating that the size of the program
would allow the city to serve a wide array of recipients. The city responded to some of these
issues in April 2021 by adjusting the loan term for small business loans to 60 months and
microloans to 18 months. Nevertheless, the demand and impacts of a city loan fund emerging
from COVID response suggests exploring value for a more permanent and targeted ongoing
capacity.
May 11, 2021 Item #12 Page 48 of 61
Sidebar: Inventory of Additional Regional Response
The city’s relief programming accompanied complementary efforts at the local, regional, and state
scales. Directing city businesses to these offerings, while offering a bespoke city response gave local
businesses direct access to relief customized to local needs, plus guidance on navigating broader
resources.
At the local / North County level:
• Carlsbad Chamber of Commerce: developed directories of state and federal assistance, local
technical assistance, and other resources available to businesses; compiled and publicized list
of open local businesses; offered informational webinars; conducted surveys assessing COVID
impact on businesses
• Carlsbad Village Association: provided basic information and guidance to businesses;
developed list of open local restaurants for support
• San Diego North EDC: conducted research on COVID impact in North County; publicized
guidance and updates for businesses through newsletters and website
• MiraCosta Technology Career Institute
• North County Career Centers
• North San Diego SBDC: Provided business assistance, leveraging expanded regional SBDC
network resources.
At a regional level:
• San Diego County: Offered a two- round ($20 million and $30 million) Small Business Stimulus
Grant Program capitalized by federal CARES Act funding; with the San Diego Foundation, local
CDFIs, and SBDC network launched the San Diego County COVID-19 Small Business &
Nonprofit Loan Program; supported the $66 million San Diego Foundation-led San Diego
COVID Community Response Fund; and worked with the regional SBDC network to expand
COVID-related small business services with federal and state funding. Also manages re-
opening plan process and provides guidance, guidelines, and resources for businesses,
including via regular telebriefings.
• San Diego Regional EDC: Provided a region-wide resources directory, data-driven research on
COVID regional economic impact, business-informed reopening guides, a “still hiring” list of
open tech and life sciences jobs (in collaboration with CONNECT and Startup SD), and the
opportunity to receive direct guidance/technical assistance (after completing an online form).
In January, as part of its regional inclusive growth initiative, the EDC announced a new
May 11, 2021 Item #12 Page 49 of 61
initiative focused on supporting small business recovery through improved local
procurement.40
• Innovate 78: Compiled North County-centric guidance and updates on its website. In
February, the group released an analysis of the sub-region’s manufacturing industry including
consideration of COVID impact.
• San Diego Workforce Partnership: Published updates and research offering guidance and
context on employment impacts of COVID crisis; offered resources to unemployed workers;
and provided “business impact” counseling focused on limiting layoffs, offering employee
support, and otherwise addressing employment-focused COVID disruptions.41 Also elevated
and subsidized innovative initiatives, such as High Road Kitchens, aimed at preserving
employment and promoting job quality.42
• San Diego and Imperial SBDC Network: With County support and state and federal funding,
provided expanded assistance to businesses. Online trainings and personalized assistance
spanned topics including re-opening, cybersecurity, human resources, and marketing and
sales. Also provided specific tools and guidance focused on retail, food services, childcare,
salons and barbers, fitness studios, and office buildings.43
• San Diego Foundation: Managed and administered the $66 million San Diego COVID
Community Response Fund and, with the County, local CDFIs, and SBDC network launched,
the San Diego County COVID-19 Small Business & Nonprofit Loan Program.
• United Way of San Diego County: Launched a Worker Assistance Initiative to help low-
income workers with rent, mortgage, and utility payments.
• Industry associations, such as Biocom: operated a “return-to-work” taskforce, offered
guidance and information, including via webinars.
At the state level:
• State tax deferrals made available for several different categories of businesses.
• California Small Business COVID-19 Relief Grant Program, a state-run program awarding
grants between $5,000 and $25,000.
40 San Diego Regional EDC, “Study release: One percent shift in procurement could mean thousands of jobs for San
Diegans,” January 28, 2021, https://www.sandiegobusiness.org/blog/study-release-one-percent-shift-in-
procurement-could-mean-thousands-of-jobs-for-san-diegans/.
41 San Diego Workforce Partnership, “COVID-19 Updates for Businesses,” updated June 22, 2020,
https://workforce.org/covid-19-bus/ and San Diego Workforce Partnership, “COVID-19 Business Impact Support,”
https://forms.workforce.org/form-5339245/COVID19-Employee-Support.
42 San Diego Workforce Partnership,” High Road Kitchens,” https://workforce.org/hrk
43 San Diego and Imperial SBDC, “Adapting Your Business to the new COVID-19 Environment,”
https://www.sdivsbdc.org/adaptsd/.
May 11, 2021 Item #12 Page 50 of 61
• Main Street Small Business Tax Credit, a state program that “allows a small business hiring
credit against California state income taxes or sales and use taxes to certain California
qualified small business employers that receive a tentative credit reservation.”
• California Rebuilding Fund, a nonprofit fund administered through CDFIs offering small
business assistance with emphasis on “economically disadvantaged and historically under-
banked areas of the state.”
Additional resources:
• Federal relief, including through the Paycheck Protection Program.
(Descriptions based on information available on organization websites as of March / April 2021)
May 11, 2021 Item #12 Page 51 of 61
PART 3: IMPLICATIONS
Much of city-level COVID responses relied on a baseline of core economic development capacity to
deliver -- seasoned staff, strong relationships and networks, and industry-leading tools and practices.
Effectively responding to COVID required engaging closely with local firms to determine needs, supply
resources, and address hurdles. Sustaining these practices, filling remaining gaps, and preparing for both
long-term vitality and future disruptions will require additional capacity-building and investment.
Looking forward, lessons for Carlsbad from COVID indicate that continued strategic economic
development action will be needed to both promote a full recovery and generally improve local the
business ecosystem, particularly extending to sectors, businesses, and workers most impacted by the
pandemic.
This likely requires Carlsbad to prepare a formal economic development strategy that takes into
account these issues -- prioritizing potential activities for maximum return on limited resources,
defining the specific role of the city in advancing these changes, aligning with other contributors to fill
gaps and eliminate redundancies, and reflecting the city’s distinctive position as the major sub-
regional economic and employment hub in North County.
The following are examples of near-term and long-term ideas for consideration, drawn from this initial
response and recovery assessment.
1. Continue to improve and build capacity of city economic development operations: COVID
reinforced the imperative of a high-capacity, customer-friendly approach to economic development
equipped to quickly identify and respond to business needs. Moving forward, the city can
institutionalize and expand on enhanced practices and flexibilities adopted for communicating with
and serving businesses.
Near-term actions
• Bolster data and research capacity: Building on its Economic Scan, online “story map,” and
other new products, the city would benefit from expanding data and research capacity for
finely-grained business and market intelligence to proactively identify issues and inform
interventions. For example, adding demographics to business license applications and other
city processes would offer further insights on trends by race and gender.
• Strengthen communications with business: The city can review how it communicates with
businesses, including digital analytics, to identify ways to better design and target products
that reach different audiences, addressing points about penetrating an overload of incoming
information.
Longer-term actions
• Improve business interface with city: Responding to business feedback, the city can reform
the business license application process, permitting, and other areas of business interaction
to provide clearer, customer-friendly service. Ideas included establishing a single seamless
point for navigation, plus simplified processes, clearer status communications, and shorter
wait times.
• Pursue ongoing regulatory flexibilities: The city can consider extended or permanent
adjustments to regulatory measures eased during COVID, such as activation of outdoor
spaces for dining and other activities.
May 11, 2021 Item #12 Page 52 of 61
2. Expand availability and access to business supports at city and regional levels: While business
supports were fundamental to COVID response, the crisis illustrated unevenness in coverage and
access. Closing these gaps can help promote more and enduring growth through recovery and
revitalization, maximizing economic participation.
Near-term actions:
• Advance longer-term capital access: Building from the COVID small business loan program
experience, the city should consider tools like a revolving loan fund to continue addressing
local business capital needs during recovery and revitalization. The city also can consider
how such a resource may particularly impacted target sectors or groups, plus broader
economic development goals.
• Promote local businesses: Maintain “Shop Local” marketing efforts to promote local
businesses capturing renewed consumer spending.
Longer-term actions:
• Improve connections to regional services: Through tighter coordination -- or even a
concierge function -- the city could work with partners across the North County sub-region
to ensure full awareness of and easier access to available supports.
• Expand technical assistance: Working with intermediaries and service providers, the city
can identify and resource additional common areas of need, such as workforce access or
business operations, by emerging issue area or type of firm.
• Create supports for inclusive growth: The city can spur greater effort to address the distinct
needs of non-white and women entrepreneurs as groups for which the COVID impact
reinforced long-standing challenges. This may include simply ensuring representation and
input on those needs, such as seeding diverse business advisory groups or promoting the
presence of minority chambers in the area.
• Strengthen sub-regional collaboration on marketing: The city can consider flexibility for a
more shared North County tourism promotion effort to achieve scale and efficiencies in
marketing the distinctive assets of the sub-region.
3. Improve access to and upward mobility of talent base: The disparate impacts of COVID on groups
of workers, as well as the challenges employers report in rebuilding their workforces, indicate gaps
in supports for talent development and recruitment. More ambitious action to address these
challenges could benefit workers, employers, and the city alike.
Near-term actions:
• Organize industry to strengthen talent pipeline: The city could help to catalyze industry-
specific business alliances, mid-size firm coalitions, and new models of technical assistance
for human resources needs to achieve economies of scale in addressing talent sourcing
challenges, including from outside the city.
Longer-term actions:
• Foster pathways to good jobs: Addressing needs of both employers and employees, the city
can facilitate activities that help smaller and mid-size firms to upskill incumbent workers,
particularly in lower-wage industries, for pathways from “promising” to “good” jobs, even
across sectors.
May 11, 2021 Item #12 Page 53 of 61
• Advance job quality: The city can provide thought-leadership and support for activities that
enable businesses to improve job quality (such as the San Diego Workforce Partnership’s
High Road Kitchens initiative), and confront non-talent barriers to workforce participation
like childcare.
4. Prepare for future disruptions: Revitalization must acknowledge the likelihood of future disruptions
and challenges highlighted by COVID. Strategic planning should consider how to improve long-term
resiliency to prepare for these changes.
Longer-term actions:
• Support small businesses for a changing economy: The city could invest in activities that
help small businesses to improve resiliency, such as identifying and adopting new
technologies.
• Enhance broadband coverage and access: In order to address unmet needs of residents as
well as support businesses and enable capture of potential remote work, the city can pursue
models and provider collaborations to improve broadband service availability and
subscriptions.
• Plan for future industry shifts: The city can consider impact of macro shifts underscored and
accelerated by COVID on major city industries like hospitality and manufacturing, such as
automation and digitalization.
Conclusion
When COVID-19 first started generating headlines in late 2019, most local leaders across the U.S. could
not conceive that the virus would spawn a global pandemic bringing a year-plus black swan event to
their cities halfway across the world. Its abrupt impact and sustained influence on just about every facet
of life was difficult to foresee and impossible to fully prepare for. Responding to an unprecedented
economic crisis, the response by cities often drew on instinct and experimentation without prior
experience.
Even as the pandemic abates and economy reopens hot, cities need to critically examine their COVID
response and its implications for moving forward on economic development actions. The impacts
disrupted business practices and talent needs, left significant numbers of workers still displaced, and
illuminated fundamental gaps in economic opportunity. It also stretched and tested local government
response and partnerships, identifying gaps that need to be filled and reinforcing the imperative of
thoughtful, comprehensive local and regional roles in supporting business vitality. As an immediate step,
cities need to determine how to most strategically invest significant local relief made available under the
American Rescue Plan).44
An objective review of Carlsbad’s relief efforts indicates the city responded in a swift and expansive
manner, likely contributing to the survival of local businesses, jobs, and tax base. However, it also
reveals that revitalization requires the city to establish a written economic development strategy
incorporating lessons from those activities and business interactions to ensure long-term vitality.
44 Brad Whitehead and Joseph Parilla, “How should local leaders use their American Rescue Plan funding?” Brookings Institution, March 23, 2021, https://www.brookings.edu/blog/the-avenue/2021/03/23/how-should-
local-leaders-use-their-american-rescue-plan-funding/.
May 11, 2021 Item #12 Page 54 of 61
Appendix: Overview of COVID Economic Development Responses by Comparison Cities
Review based on information available on city websites as of February through April 2021
City Main Features of COVID Economic Development Response
San Jose Region
Cupertino, CA • Consolidated information on resources available to businesses.45 Disseminated
occasional e-mail newsletter.
• Developed reopening toolkit, COVID-19 signage/posters, and other business tools
• With CARES funding, awarded $185,000 in Small Business Emergency Relief
Grants.
• Offered webinars on topics including small business assistance with partners such
as the Cupertino Chamber of Commerce and the NorCal SBDC.
• Maintained “Open for Business” list of restaurants and other establishments
remaining in operation.
• Provided flexibility for outdoor dining.
Mountain View, CA • Provided list of business resources on overall community resources page.46
• Instituted S1+ million Small Business Resiliency Loan Program, capitalized by City,
Google, LinkedIn, and donations to small business relief fund at local community
foundation. Fund offered no-interest loans of up to $10,000 to businesses with 25
or fewer employees.47
• Offered $100,000 in no-interest loans to small landlords through dedicated loan
program.
• Provided $250,000 in support to businesses through lottery-based Small Business
Grant Program.48
• Enabled flexibilities for downtown and citywide outdoor dining
Santa Clara, CA • Created resource page.49
• Instituted Small Business Assistance Grant Program, awarding $1.7 million to small
businesses with 25 or fewer employees; non-essential businesses were eligible for
$10,000 and essential businesses were eligible for $5,000.50 Program was
capitalized by the City, CARES funding, and crowdsourcing led by the Silicon Valley
Central Chamber of Commerce.
• Small businesses adversely affected by COVID also eligible for Energy Efficiency
Grants to ultimately lower energy costs from City-owned Silicon Valley Power.51
45 City of Cupertino, “COVID-19 Business Info,” https://www.cupertino.org/businesses/economic-
development/covid-19-business-info.
46 City of Mountain View, “COVID-19 Community Resources,”
https://www.mountainview.gov/depts/manager/communityinfo/covid19communityresources/default.asp#busine
ss.
47 City of Mountain View Media Release, “Mountain View Launches Small Business Resiliency and Small Landlord
Programs.” April 29, 2020, https://www.mountainview.gov/civica/press/display.asp?Layout=1&Entry=1439/.
48 City of Mountain View, “Small Business Grant Program,”
https://www.mountainview.gov/depts/comdev/economicdev/small_business_grant_program.asp.
49 City of Santa Clara, “COVID-19 Business Resources,” https://www.santaclaraca.gov/i-want-to/stay-
informed/newsroom/coronavirus-updates/covid-19-business-resources/-loadingmode-EditContent/-fsiteid-
1?navid=14174/
50 City of Santa Clara, “Small Business Assistance Grant Program,” https://www.santaclaraca.gov/i-want-to/stay-
informed/newsroom/coronavirus-updates/covid-19-business-resources/small-business-assistance-grant-program and https://www.santaclaraca.gov/home/showpublisheddocument?id=67221.
51 Silicon Valley Power, “Rebates,” https://www.siliconvalleypower.com/businesses/rebates.
May 11, 2021 Item #12 Page 55 of 61
City Main Features of COVID Economic Development Response
• Established flexibility for restaurants and other businesses to operate outdoors.
• Encouraged “Takeout Tuesdays” to support local restaurants. Also instituted
ordinance limiting delivery app fees.52
• Instituted flexible payment plans for utilities, moratorium on disconnections, and
applied garbage rate discounts.
• Adopted worker recall ordinance applying to building service, food service and
hotel service workers who lost jobs due to COVID; considered expansion of
existing worker retention ordinance to benefit hotel workers.53
Seattle Region
Bellevue, WA • Developed central business resources webpage and newsletter.54
• Offered business assistance through partnership with sub-regional
(re)STARTUP425 initiative.
• Established $600,000 Small Business Relief Grant Program awarding $5,000 grants
to small businesses and arts organizations. (At least $185,000 of this funding was
from the federal CARES Act).55
• Instituted new flexibilities regarding outdoor dining and curbside food pickup.
Suspended water shut-offs, eliminated utility past-due fees, and provided other
utility relief.
• Joined with sub-region partners to highlight open businesses and restaurants on
“What’s Open Eastside” platform.
• Provided some tax deferrals for small businesses with less than $5M in gross
revenue.
Everett, WA • Compiled resources page.56
• Provided flexibility for outdoor dining via “Streatery” program.
• Launched three-round EverettCARES grant program to assist small businesses;
businesses with 1-20 employees were eligible for $10,000, businesses with 21-50
were eligible for $20,000.57
Kirkland, WA • Developed central webpage consolidating resources.58 Also mailed initial business
resource packet to local businesses in March 2020.
• With Google, local Chamber, and local bank, instituted Small Business Relief Fund
aimed at small businesses and non-profits with 25 or fewer employees.
(Google.org provided initial $250,000 capitalization for the fund, with another $200,000 raised from other local sources).59
52 City of Santa Clara, “Third Party Food Delivery Fee Cap,” https://www.santaclaraca.gov/i-want-to/stay-
informed/newsroom/coronavirus-updates/covid-19-business-resources/-loadingmode-EditContent/-fsiteid-
1?navid=14174.
53 City of Santa Clara, “Worker Recall and Retention,” https://www.santaclaraca.gov/i-want-to/stay-
informed/newsroom/coronavirus-updates/worker-recall-and-retention.
54 City of Bellevue, WA, “COVID-19 Business/Nonprofit Resources,” https://bellevuewa.gov/city-
government/departments/city-managers-office/communications/emergencies/covid-19/business-resources.
55 City of Bellevue, WA, “City extends more financial support to small businesses,” https://bellevuewa.gov/city-
news/small-business-relief.
56 City of Everett, COVID-19, For Businesses, https://everettwa.gov/2569/For-businesses/
57 City of Everett, Everett CARES Grant Program, https://everettwa.gov/everettcares/.
58 City of Kirkland, “COVID Support Resources for Businesses,” https://www.kirklandwa.gov/Resident/Public-
Safety/COVID-19-Support-Resources-for-Businesses.
59 Greater Kirkland Chamber of Commerce, “The Kirkland Small Business Relief Fund,”
https://kirklandchamber.org/kirkland-small-business-relief-fund/.
May 11, 2021 Item #12 Page 56 of 61
City Main Features of COVID Economic Development Response
• With CARES funding, distributed an additional $1+ million in grants to small
businesses and over $300,000 to arts organizations.60
• Launched Shop Local Kirkland Initiative to promote local businesses via website,
social media, graphics/marketing tools.
• Offered business assistance through partnership with sub-regional
(re)STARTUP425 initiative.
• Established small business and nonprofit eviction moratorium and utility charge
deferrals. Provided relief from certain regulations (e.g. suspension of some fees,
flexibility for outdoor dining, parking stalls for restaurant pick-up, eased sign code
enforcement for essential businesses.)
• Conducted business survey to assess needs and response effectiveness.
Redmond, WA • Compiled directory of resources and guidance; provided phone-based assistance
to businesses.61
• Instituted $1.5 million Redmond Small Business Resiliency Grant Fund, providing
grants up to $10,000 to small businesses/non-profits with less than $2 million
gross annual revenue and fewer than 25 employees.62 Awards were accompanied
by business assistance services. (Program operated in partnership with One
Redmond, a sub-regional combined Chamber, economic development enterprise,
and community foundation).
• Phase II of grant program offered additional $225,000 for “home-based”
businesses.63
• Offered $100,000 in grant funding (up to $7,500 per grant) to support
weatherization of businesses and nonprofits for outdoor operations.64
• Coordinated closely with One Redmond to provide direct technical assistance,
additional Small Business Recovery Fund, map of open businesses, and other
resources through new Eastside sub-region collaboratives.65
• Facilitated temporary outdoor dining permits, flexibilities for curb-side pickup.
• Promotion of local businesses and tourism through “Buy Redmond” campaign.
Phoenix Region
Gilbert, AZ • Developed three-phase #GilbertTogether Business Recovery Program spanning
both resident and business resiliency.66
• Business assistance included: $11 million in Business Relief Grants (up to $35,000
per recipient), Business Recovery Loans (between $10,000 and $50,000), and
60 City of Kirkland, “COVID-19 Economic Development and Small Business Relief,” rev. December 28, 2020,
https://www.kirklandwa.gov/files/sharedassets/public/city-managers-office/pdfs/kirkland-small-business-relief-
summary-12.28.20.pdf.
61City of Redmond, https://www.redmond.gov/1367/Resources-for-Businesses-Impacted and
https://www.redmond.gov/DocumentCenter/View/13309/TOURISM-AND-ED-UPDATES_APRIL-PDF
62 OneRedmond, “Redmond Small Business Resiliency Grant Fund – Phase 1,” https://oneredmond.org/redmond-
small-business-grants/
63 One Redmond, “Redmond Small Business Resiliency Grant Fund Phase II,” https://oneredmond.org/redmond-
small-business-resiliency-grant-fund-phase-ii/.
64 One Redmond, “Redmond Business Winterization Grant Fund,” https://oneredmond.org/redmond-business-
winterization-grant-fund/.
65 See (re)STARTUP425, https://re.startup425.org/ and Eastside Recovery Hub, https://oneeastside.org/eastside-
recovery-hub/.
66 City of Gilbert, AZ, #GilbertTogether Business Recovery Program,”
https://www.gilbertaz.gov/business/gilberttogether-business-recovery-program.
May 11, 2021 Item #12 Page 57 of 61
City Main Features of COVID Economic Development Response
Business Resiliency Assistance technical assistance.67 A total of $18 million in
CARES funding was dedicated to these activities.
• Technical assistance offerings included group trainings / bootcamps, access to a
marketing / customer acquisition tool identified by business feedback and a web-
based small business / entrepreneurship assistance hub.
• Offered some support for worker retraining with Maricopa Community Colleges
for residents adversely affected by COVID.
• Developed webinars in partnership with local Chamber. Also conducted business
surveys to assess needs.
Scottsdale, AZ • Published pandemic resources page on website, distributed city newsletter.68
• Initiated virtual small business assistance center to provide personal guidance and
counseling to local companies.
• Partnered with local provider to offer additional technical assistance through
webinars, “restaurant bootcamps,” and hands-on help.69
• Developed and publicized “Good to Go Business Finder” navigator for finding open
restaurants and other businesses. Promoted local businesses through “Shop
Scottsdale” campaign.
• Upon application, provided relief from regulatory license fees, $2,000 credit for
commercial utilities. Halted water disconnections.
• Instituted Scottsdale Small Business Reimbursement Program offering up to
$5,000 reimbursements to local businesses for COVID-related expenses. Up to
$3.3 million was made available.70
• Awarded nearly $885,000 in grants to arts and culture organizations, plus
authorized $175,000 more in funding to support two additional organizations.
Tempe, AZ • Compiled resources for businesses, offered email updates.71
• Made $1.1 million available for small business grants, with focus on industries
most affected by COVID (NAICS-specified) and goal to dedicate up to 20% to
minority, veteran, and women-owned businesses.72 Awards of up to $10,000
determined by number of employees.
• Produced marketing videos featuring business leaders encouraging compliance
with COVID health protocols. Also provided banners and marketing collateral
promoting these practices.
67 City of Gilbert, AZ, “#GilbertTogether Business Relief Grant Applications Officially Open,” October 30, 2020,
https://www.gilbertaz.gov/Home/Components/News/News/4269/17 and City of Gilbert, AZ, “Gilbert Partners with
Desert Financial Credit Union to Administer $50,000 Microloans,”
https://www.gilbertaz.gov/Home/Components/News/News/4263/17.
68 Choose Scottsdale / City of Scottsdale Economic Development, “Pandemic Business Resources,”
https://www.choosescottsdale.com/media/covid19.
69 Choose Scottsdale / City of Scottsdale Economic Development, “Scottsdale Business Training and Technical
Assistance,” https://www.choosescottsdale.com/grow/small-business-startups/
70 Lorraine Longhi, Arizona Republic, ” Scottsdale has $3M in COVID-19 relief funds to help small businesses as
Tuesday deadline looms,” Sept 4, 2020,
https://www.azcentral.com/story/news/local/scottsdale/2020/09/04/heres-how-scottsdale-small-businesses-can-
apply-up-5-k-covid-19-relief/5693016002//
71 City of Tempe, AZ, “For businesses,” https://www.tempe.gov/government/communication-and-media-
relations/coronavirus-covid19/for-businesses.
72 Arizona Community Foundation, “Tempe Small Business Grant Program,” https://www.azfoundation.org/Grants-
Loans/Tempe-Small-Business-Grant-Program/.
May 11, 2021 Item #12 Page 58 of 61
City Main Features of COVID Economic Development Response
• Launched “Buy Now, Save Local” campaign to support small businesses. Promoted
app developed by councilmember displaying open businesses.
• Hosted webinars sharing guidance on COVID adaptation business practices.
• Allowed flexibility for outdoor dining and retail operations.
Other Regions (Denver, Boston, Tampa)
Boulder, CO • Developed resources page.73
• Established $675,000 Small Business Grant Program with CARES funding;
businesses and non-profits with 100 or fewer employees were eligible.
• Provided flexibility for outdoor dining and curbside pick-up.
• Subsidized delivery for food from local restaurants.
Cambridge, MA • Generated central resource page for businesses.74
• Distributed or involved in distributing approx. $4.2 million in business assistance
funding through several programs: $500,000 Mayor’s Disaster Relief Fund
(offering grants up to $10,000; subsequently $6,000); Cambridge Redevelopment
Authority Zero-Interest Loan program offering loans of up to $15,000 to
businesses qualifying for Disaster Relief Fund; and additional CDBG and CARES Act
funding.75 Small business relief programs supported by CDBG or CARES funding for
HUD-eligible businesses included preferences for women and minority-owned
businesses.76
• Created online dashboard to display small business support progress, including
details on business types, owner demographics, and more.77
• Publicized list of open businesses. Launched “Pick It Up Cambridge” campaign to
support restaurants.
• Offered virtual information sessions and office hours for business assistance.
Clearwater, FL • Compiled resources page.78 City staff also available via phone to provide
assistance.
• Instituted $4M Clearwater Back-to-Business Grant and Professional Services
Program aimed at brick-and-mortar, home-based, and non-profits, with 25 or
fewer employees. Alongside grant, recipients received access to professional
services assistance (e.g. legal, marketing) 79
73 City of Boulder, “Coronavirus Business Resources,” https://bouldercolorado.gov/coronavirus-business-resources.
74 City of Cambridge, “COVID-19 Information for Businesses,” https://www.cambridgema.gov/covid19/Business.
75 Ibid.
76 City of Cambridge, “Cambridge Small Business COVID-19 Relief Grant,”
https://www.cambridgema.gov/CDD/News/2020/3/smallbusinesscovid19reliefgrant and Cambridge Small
Business Winter COVID-19 Grant,
https://www.cambridgema.gov/news/detail.aspx?path=/sitecore/content/home/cdd/news/2020/12/wintercovid1
9smallbusinessgrant.
77 City of Cambridge, “Small Business Assistance Dashboard,”
https://www.cambridgema.gov/covid19/Business/Assistance.
78 City of Clearwater, “Resources for Small Business Owners and Employees Impacted by COVID-19,”
https://www.myclearwater.com/news-info/covid-19-information-city-updates/resources-for-small-business-
owners-employees-impacted-by-covid-19.
79 City of Clearwater, “COVID-19 Back to Business Program,” https://www.myclearwater.com/government/city-
departments/economic-development/covid-19-back-to-business-program-2591
May 11, 2021 Item #12 Page 59 of 61
Acknowledgments
More than 200 Carlsbad businesses and stakeholders contributed to the development of this report
through quantitative and qualitative research input and insights from interviews and roundtables,
survey responses, and community conversations.
Special recognition among these contributors goes to several organizations and individuals who were
indispensable in facilitating the analysis through provision of localized data, context, and contacts:
City of Carlsbad
• David Graham, Chief Innovation Officer
• Matt Sanford, Economic Development Manager
• David van Guilluwe, Data Science Manager
San Diego Regional Economic Development
Corporation
• Eduardo Velasquez, Director of Research
• Bree Burris, Director of Communications
San Diego North Economic Development Council
• Erik Bruvold, CEO
San Diego Association of Governments
• Ray Major, Chief Economist
• Stephanie Guichard, Senior Economist
Carlsbad Chamber of Commerce
• Bret Schanzenbach, CEO
Carlsbad Village Association
• Christine Davis, Executive Director
Visit Carlsbad
• Mark Rudyk, Interim Executive Director
Firm Background
Cities GPS LLC is an advisory group that brings together diverse topical experts and peer practitioners to
help business, government, and civic stakeholders collaborate on finding and implementing solutions for
competitiveness, growth, vitality, and inclusion, anchored in the shared economic assets of city-regions.
Cities GPS focuses on traded sectors, talent, innovation, infrastructure, and governance, combining
advanced research techniques, practical experience, and international networks. Cities GPS organizes
multidisciplinary teams tailored to each effort, drawing from a pool with local, national, and global
experience. Collectively, Cities GPS advisors have worked with public and private sector partners in more
than 80 cities, 20 states, and 10 countries.
Principal Authors
Marek Gootman: Serving as Cities GPS Managing Principal, Mr. Gootman brings 30 years of experience
focused on private-public action around city-regions and economic opportunity. At the Brookings
Institution, he currently is a nonresident Senior Fellow, following nine years as Fellow and Director of
Strategic Partnerships & Global Initiatives with the Metropolitan Policy Program, where he advanced
application of ideas through research, demonstration projects, policy promotion, and learning networks.
The analysis, conclusions, and recommendations presented in this report are solely those of Cities
GPS, and do not reflect the views of any organizations or individuals that sponsored or contributed
to the work, or with whom the authors are otherwise affiliated. The authors recognize that the
value they provide are based on an absolute commitment to objective, candid, high-quality
research and practical problem-solving for policymakers and the public. All activities or work
products reflect this dedication to independence and impact.
May 11, 2021 Item #12 Page 60 of 61
Previously, he was a partner at Patton Boggs LLP where he counseled local governments and public
agencies on policy, programs, and federal advocacy, including seven of the 10 largest US cities. Among
other prior positions, he served in various roles with federal agencies, a bi-state metropolitan planning
organization, and the UK government working on economic development, urban revitalization, cross-
sector partnerships, and program delivery reforms. Mr. Gootman earned a law degree at Georgetown
University; Master of Government Administration at the Fels Institute, University of Pennsylvania; and
business degree from the Wharton School, University of Pennsylvania.
Rachel Barker: A strategist, analyst, and storyteller focused on building more innovative, inclusive cities,
Ms. Barker has worked with national and local stakeholders to identify and advance solutions that
support economic growth and mobility. Her experience encompasses program development and
assessment, application of evidence and data, and codification of practices with multiple organizations,
ranging from Results for America to the Pritzker Traubert Foundation. Previously, Ms. Barker served as
an impact manager, policy analyst, and engagement strategist at the Brookings Institution, addressing
issues like inclusive economic development, global competitiveness, and evaluation. Across these roles,
she has coordinated and contributed to a broad array of applied projects and peer learning cohorts,
undertook research, and produced dozens of reports, blogs, and podcasts. Ms. Barker graduated magna
cum laude / Phi Beta Kappa from the Elliott School of International Affairs at George Washington
University
May 11, 2021 Item #12 Page 61 of 61
COVID-19 Economic Recovery
Assessment & Implications
David Graham, Chief Innovation Officer
Matt Sanford, Economic Development Manager
Cities GPS
May 11, 2021
Recommendations
•Receive a report regarding the assessment of the city’s economic response to
COVID-19 and discuss insights and potential actions for an inclusive recovery
•Discuss the recommendation from the Ad Hoc City Council Economic Revitalization
Subcommittee to direct staff to return to the City Council with an action to create a
standing economic development subcommittee
•Adopt a resolution approving COVID-19 economic recovery actions, including:
–Authorizing the Deputy City Manger for Administrative Services to allocate
$100,000 of the contingency balance remaining from the initial allocation of
the Economic Recovery and Revitalization Initiative for the development of an
economic recovery and economic development strategic plan
–Authorizing the Deputy City Manager for Administrative Services to carry
forward the remaining funds committed to the Economic Recovery and
Revitalization Initiative into Fiscal Year 2021-22
2
Economic Assessment
•Quantify economic impact on Carlsbad businesses, while factoring
disparate impact based on
–Industry
–Business Size
–Business ownership structure
•Evaluate City of Carlsbad economic response
–Compare City of Carlsbad response to other similar cities
–Analyze effectiveness of city response programs
•Present implications for continued economic recovery
–Discuss areas where the city can improve
–Provide actionable recommendations as we move to recovery phase
3
Economic Assessment Process
•Worked with Cities GPS – a national inclusive economic development
consultant –to provide third-party analysis professional opinions. This
included:
–Quantitative assessment drawing on City of Carlsbad data, plus other
regional (e.g.SANDAG) and national sources
–Qualitative review of city COVID-19 responses at national scale,including
identification of set of comparable cities, to contextualize Carlsbad
activity
–Five stakeholder sessions engaging DVMW businesses,innovation
economy firms and start-ups, tourism companies,small businesses, and
regional business intermediaries (e.g.The Chamber of Commerce,
Carlsbad Village Association and Visit Carlsbad)
–Business survey that elicited more than 165 responses4
Core Tea Meeting 1 –May X, 2020
City of Carlsbad City Council
May 11, 2021
Marek Gootman and Rachel Barker
COVID-19 Inclusive Economic Development Response and
Recovery Assessment
Summary of Findings
{city of
Carlsbad CITIE · s
1.While Carlsbad overall suffered a less severe COVID-driven economic downturn than the
broader San Diego region --due to its industry and demographic mix --the city still
experienced significant impacts on particular sectors and groups.
2.Relief provided by Carlsbad was consistent with national practices and, in some cases,
exceeded comparable cities.
3.Assessment of interventions and needs, including stakeholder feedback, identified areas
to retain from COVID response and possibilities for improvement across city operations,
business supports, and firm resiliency.
4.To advance these changes,prioritize efforts,and maximize Carlsbad activity as the
major sub-regional economic / employment hub,the city should create an updated,
written economic development strategy that aligns with other North County and
regional assets.
Overall Findings
1CITIE OPS
Source: California Employment Development Department data
Carlsbad suffered a less severe COVID downturn than the region
2
20.00%
18.00%
16.00%
14.00%
12.000/4
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
CITIE OPS
Comparison of Unemployment Impacts within the Region
(Mar 2020-Mar 2021)
-Carlsbad
San Marcos
-Escondido
-Vista
-oceanside
-san Diego County
Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21
Source: Analysis of California Employment Development Department, SANDAG, and US Census LEHD data,
following SANDAG cluster classifications
Particular sectors and groups experienced significant impacts
3CITIE OPS
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
Carlsbad Estimated Net Job Losses by Industry Cluster
(Feb 2020 -Jan 2021)
Job Loss O Share Loss
0
,c--0-
0
Construction Manufacturing Retail & Transportation & Professional,
Wholesale Trade Utilities Financial &
Administrative
0
Education
0
Health care & Tourism, Leisure,
Social Assistance Accomodations &
Food
80%
70%
60%
50%
40%
30%
20%
10%
0%
Major Elements of Carlsbad COVID Response
•Established a $4.4 million business loan program.
•Contributed to joint tourism and business marketing
campaign.
•Provided landlord and tenant mediation and renegotiation
services, and rent relief on city properties.
•Instituted “Joint Communications” to businesses, with
Carlsbad Chamber of Commerce and Carlsbad Village
Association.
•Offered resources including directory of assistance, GIS map
of open restaurants, and “story map” and economic scan
charting city trends and performance.
•Provided direct assistance to over 650 businesses.
•Suspended commercial evictions for tenants in good standing
prior to the emergency,delayed business license fees, halted
utility shut-offs, waived utility late fees, and offered new
flexibility on commercial solid waste services.
•Adopted a worker recall ordinance for hotel workers.
•Established new temporary flexibility for use of outdoor public
space, such as public sidewalks and private parking lots.
•Supported local businesses through Shop Local and
marketing campaigns.
•Employed surveys and webinars to gather business feedback.
Seattle Region
Bellevue, WA
Everett, WA
Kirkland, WA
Redmond, WA
Phoenix Region
Gilbert, AZ
Scottsdale, AZ
Tempe, AZ
San Jose Region
Cupertino, CA
Mountain View, CA
Santa Clara, CA
Other
Boulder, CO
Cambridge, MA
Clearwater, FL
Comparable Cities
Common Response Themes
•Information sharing and technical assistance
•Regulatory relief
•Access to capital
•Workforce/talent assistance
Areas of Divergence
•Size, design, capitalization of financial assistance
•Targeting of financial assistance
•Focus on diversity and equity
•Regional collaboration and partnerships
Carlsbad relief was consistent with national practices
4CITIE ijPS
Source: Analysis of City of Carlsbad loan data
Loan program distributions supported very small businesses, reflecting impacted sectors
Loan Recipients by Number of Employees Distribution of Loans by Industry Sector
5
40
35
30
25
20
15
10
5 ■ Construction ■ Manufacturing
■ Retail & Wholesale Trade ■ Transport & Warehousing
0 ■ Professional, Financia & Administrative ■ Education
1-2 employees 3-5 employees 6--9 employees 10+ employees ■ Health Care &Social Assistance ■ Tourism, Leisure, Accommodations & Food
CITIE OPS
Estimated multiplier effects of the 77 executed loans range from preserving 185 to 215 jobs, and
$975,000 to $1.08 million in annual local tax revenue.
Source: Analysis of City of Carlsbad loan data
Loan impacts include preservation of direct / indirect jobs and tax revenue
Estimated Share of Direct / Indirect Jobs Preserved,
by Industry Sector
Estimated Share of Local Taxes Preserved,
by Industry Sector
6
■ Construction
Retail & Wholesale Trade
Professional, Financia & Administrative
■ Health Care & Social Assistance
CITIE OPS
■ Manufacturing
■ Transport & Warehousing
Education
■ Tourism, Leisure, Accommodations & Food
To maximize efforts as the major sub-regional economic / employment hub,Carlsbad should create an updated written economic
development strategy that considers what worked, gaps, and the specific role of the city aligned with other North
County and regional assets. Considerations include:
•support small businesses for a changing economy
•ensure broadband coverage and access
•plan for future industry and workforce shifts
7
Findings from COVID responses identified areas to retain or improve
•bolster data and research for decision-making
•improve business-city interface and communications
•pursue ongoing regulatory flexibilities, such as use of
outdoor space
1. Continuing to enhance city economic development operations and capacity
2. Expanding availability and access to business supports at city and regional levels
•improve navigation or connections to regional services
•expand technical assistance that fills gaps in topics or
scale
•advance longer-term capital access
•create supports for inclusive growth, reaching non-
white and women-owned businesses
•strengthen sub-regional collaboration on marketing
3. Improving access to and mobility of talent base
•organize firms based on size and sectors to strengthen
talent pipeline
•foster pathways to good jobs and promote job quality
4. Preparing for future disruptions
CITIE OPS
Insights
13
•Early action by the city council to respond to the economic impact of
the pandemic has put the city in a good position relative to peer cites
•Recognizing the need to shift from economic response to recovery,
the city is positioned to strategically engage at a time of economic
vulnerability
•Continued leadership and investment through recovery and into
revitalization can accelerate a reinvigoration of the city's inclusive
economic competitiveness efforts and strengthen resiliency
Economic Recovery
14
The Ad Hoc City Council Economic Revitalization Subcommittee
recommends adopting a resolution to:
•Carry over existing Economic Recovery and Revitalization Initiative
funding into fiscal year 2021-22 with a recommendation that the
funding and its potential uses be reconsidered once the health
emergency orders have been lifted
•Develop an inclusive economic recovery and development strategy that
incorporates the tactics described in the staff report and sets a long-
term vision for economic development in the city with the goal of
creating a more prosperous and inclusive economy
•Create a standing economic development committee of the City Council
Economic Recovery
Recommended purview of an economic development committee:
•Create a long-term, inclusive economic recovery and development
strategic plan
•Coordinate with Carlsbad business organizations
•Evaluate the economic impact of citywide policy
•Provide guidance on other business and economic related programs
and initiatives that would be considered by the City Council
15
Recommendations
•Receive a report regarding the assessment of the city’s economic response to
COVID-19 and discuss insights and potential actions for an inclusive recovery
•Discuss the recommendation from the Ad Hoc City Council Economic Revitalization
Subcommittee to direct staff to return to the City Council with an action to create a
standing economic development subcommittee
•Adopt a resolution approving COVID-19 economic recovery actions, including:
–Authorizing the Deputy City Manger for Administrative Services to allocate
$100,000 of the contingency balance remaining from the initial allocation of
the Economic Recovery and Revitalization Initiative for the development of an
economic recovery and economic development strategic plan
–Authorizing the Deputy City Manager for Administrative Services to carry
forward the remaining funds committed to the Economic Recovery and
Revitalization Initiative into Fiscal Year 2021-22
16
Thank you!
17