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HomeMy WebLinkAbout2024-01-25; Economic Development Subcommittee and Economic Development Strategic Plan Update (Districts - All); Rocha, LauraTo the members of the: CITY COUNCIL Date~cA ✓ cc ✓ CM _LACM ~M (3)_L {city of Carlsbad Council Memorandum January 25, 2024 To: From: Via: Honorable Mayor Blackburn and Members of the City Council Laura Rocha, Deputy City Manager, Administrative Services David Graham, Chief Innovation Offic712i Geoff Patnoe, Assistant City Manager ~ Memo ID# 2024007 Re: Economic Development Subcommittee and Economic Development Strategic Plan Update (Districts -All) This memorandum provides an update on the most recent meeting of the Economic Development Subcommittee of the City Council. It also includes information regarding the implementation of programs and actions outlined in the Economic Development Strategic Plan (EDSP). Background Economic vitality is one of the goals set forth in the Carlsbad Strategic Plan 2023-2027, which was adopted on October 11, 2022, and is of significant interest to t he community. On January 10, 2023, the City Council adopted the EDSP, aligning with the city's broader 5-year Strategic Plan to enhance economic vitality. The EDSP, supported by the fiscal year (FY) 2023-24 budget, combines a long-term overarching strategy with adaptable, annually reviewed strategic actions. Core to the EDSP is setting long-term goals that support economic vitality while maintaining flexibility to address economic uncertainty as it may arise. To achieve this, the proposed EDSP is broken into two parts. The first part is the strategy itself, which sets long-term goals meant to last three to five years with overarching economic development goals that include: 1. Support Small Businesses, Startups & Entrepreneurs 2. Develop Workforce and Attract Talent 3. Grow and Support Key Industries 4. Encourage Placemaking and Engagement The second part is the Strategic Action Plan, which contains numerous tactics that can be pursued by the city to achieve the four goals contained in the strategy. The Strategic Action Plan also contains factors such as prioritization, cost, estimated timeline, departments engaged, and key performance indicators (KPls) to measure success. Administrative Services Branch Innovation & Economic Development Department 1635 Faraday Avenue I Carlsbad, CA 92008 I 442-339-5987 t Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Plan Update January 25, 2024 Page 2 The Strategic Action Plan is revisited on an annual basis and updated to correspond with changing market conditions, economic needs, and future challenges. As conditions change, certain actions may be elevated in priority, timelines updated, or KPls adjusted to respond to future needs more accurately. The Economic Development Subcommittee plays an important role in reviewing the Strategic Action Plan, providing input, and making recommendations to the City Council. The subcommittee met on December 18, 2023. This report includes the items heard by the subcommittee and the status of the EDSP implementation and its associated programs, initiatives, and strategic actions. Economic Development Subcommittee The Economic Development Subcommittee had the following four agenda items on their docket: 1. Carlsbad Business Organization and Business Updates 2. Update on Village Area Property and Business Improvement District Efforts 3. Update on Workforce and Talent Programs 4. Update on Economic Development Strategic Plan Progress Carlsbad Business Organization and Business Updates The subcommittee heard reports from the Carlsbad Village Association, Carlsbad Chamber of Commerce, and Biocom California. Mr. Bret Schanzenbach, President and CEO of the Carlsbad Chamber of Commerce, discussed national and local trends. He identified a shift in concerns regarding finding labor and talent to a greater concern regarding inflation in the past year. From his perspective the labor market had loosened with some of the layoffs that have occurred. Though difficult for the individual who gets laid off he believed that it did benefit companies that are looking for talent. Overall, from his perspective, Carlsbad companies and the economy remained strong. During discussion with the subcommittee members, it was identified that from his perspective many of the layoffs were of employees with technical skills whether from large or medium sized companies. The subcommittee also heard an update from Biocom California, the industry organization representing life sciences companies in the state. Ms. Melanie Cohn, Senior Director for State and Government Affairs, presented. As far as industry trends related to workforce, Biocom has seen a net neutral trend in the region because though there has been a dip in venture capital funding, the larger life sciences companies continue to expand. The organization is advocating for transit access for workers Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Plan Update January 25, 2024 Page 3 particularly in light of the fact that the San Diego Metropolitan Transit System (MTS) has discontinued connection service at the Sorrento Valley Coaster Station. The organization has weighed in on the Carlsbad Climate Action Plan particularly related to building electrification. The speaker raised concerns that given the energy intensive uses related to life sciences research, development, and manufacturing, there needed to be a consideration for regulations that take industry needs into account. Housing is the biggest issue facing the life sciences industry. This includes moderate income housing which is 80%-100% of the Average Median Income (AMI) and the missing middle. The missing middle was defined as a market rate town home type product for someone with the average age for the industry which is $130,000. The concern expressed was that this type of for sale product was not being built in the region. The final comments were about land use issues and Biocom's support for permit process improvement. There was a discussion about how zoning could be used to incentivize life sciences companies to partner with residential developers to create more mixed-use campuses that provided housing and jobs. Village Area Property and Business Improvement District Efforts Ms. Christine Davis, Executive Director of the Carlsbad Village Association (CVA), gave an update on the status of efforts to explore the use of a property or business improvement district to fund activities to benefit the businesses in the Village. In the FY 2023-24 budget, the City Council allocated $20,000 to the CVA to support a feasibility study for a Property-Based Improvement District (PBID). The CVA is working with Civitas Advisors, a full-service firm specializing in sustainable funding solutions through the formation and renewal of districts. Ms. Davis expressed her appreciation for the city's backing of the PBID Feasibility Study. By way of introduction, it was identified that Carlsbad's situation is different than other areas that form districts. For many the issues of blight, vacancies, lack of clean and safe programs, or a robust homeless outreach team, are more acute. While the city has provided significant services in the PBID study area in the Village, business owners have expressed that there is room for improvement. There is a keen interest in maintaining the Village as a premier destination and avoiding the potential of sliding backwards. The PBID Feasibility study is a data-informed approach to identifying where improvement is needed and desired. It is also helps define the additional services that property owners would like to see put into place. Council Memo -Economic Dev. Subcommittee and Economic Dev. St rategic Plan Update January 25, 2024 Page 4 To date, the CVA has identified a boundary map of properties to study to obtain data from a wide cross-section of properties throughout the Village. The study area was intentionally broad and will be refined to a smaller group of properties based on the district parameters. Based on the boundary map, the CVA mailed a survey card to 163 property owners including city owned properties. Information regarding the survey and a link to access it were added to the CVA website. As of December, there had been a 10% survey response rate, which was expected for several reasons. Getting survey responses from business owners is regularly a challenge due to other priorities. The address list that is relied on for an effort like this consists of San Diego County Tax Assessor address records that often identify the property owner as a trust, bank, or other legal entity. The CVA has been conducting a direct personal contact with property and business owners in the Village to boost participation. Also, a second mailing to a cleaned-up version of the list is anticipated in the first quarter of 2024. The Carlsbad Chamber of Commerce and Visit Carlsbad have also been enlisted to help increase the number of survey responses. For the 10% that responded to the survey, better management of homelessness in the Village was identified as the top priority. The second highest priority identified was a tie between addressing vandalism and property crime and the lack of public parking. Many of the priorities identified by the survey were along the lines of a traditional clean and safe program that many districts run. However, there were also comments about the CVA working with the city to use city assets to increase available parking. As next steps, the CVA is continuing to directly connect with property owners to increase survey participation. There will be ongoing outreach and engagement over the next three months with property and business owners alike. This will contribute to the key components of the Feasibility Study which are a draft service plan, budget, and an assessment methodology. The goal would be to have this work complete in three to four months. Workforce and Talent Programs Staff presented a deep dive on the issues of workforce and talent in Carlsbad and the programs that have been developed to address them. Nationally, there is a growing demand for skilled talent and the types of skills needed are rapidly evolving. There are jobs requiring many different skill levels, but a component of the workforce need to be highly educated and highly skilled to drive a vibrant economy. Companies continue to locate and expand in areas where they have access to the skilled talent that they need to grow their companies. Carlsbad is a net importer of jobs which means there are more jobs than residents. Though the number fluctuates, there are about 60,000 residents in the workforce and about 80,000 jobs. Council Memo -Economic Dev. Subcommitt ee and Economic Dev. Strategic Plan Update January 25, 2024 Page 5 The workforce is highly educated with 60% having a bachelor's degree or higher and 24% a graduate or professional degree. Economic Development Strategic Plan Progress The Economic Development Subcommittee received a status update on the programs, initiatives and EDSP actions being undertaken to support EDSP Goals. The Carlsbad EDSP is a roadmap that will guide the city's economic development activities. The EDSP comes at a critical time for the city and the community. Given the COVID-19 pandemic, subsequent recovery, market pressures, and international conflict, it was important to identify Carlsbad's economic development strategies and to prepare for future challenges. The EDSP provides flexible and agile guidance for Carlsbad to address City Council's Goal of Economic Vitality: fostering a healthy local economy. It's important to note that economic development is a collaborative effort, and is not limited to one department, group, or organization. The EDSP involves multiple city departments, local and regional partners, workforce and talent, residents, and the broad and diverse businesses that support the community. Goal 1: Support Small Business, Startups & Entrepreneurs Support Small Businesses, Startups & Entrepreneurs in partnership with local and regional collaborators, supporting the long-term viability of entrepreneurs and small businesses in Carlsbad. Strategy Action Priority Status 1.1.1. Celebrate staff's role in economic development High In Progress and continue to educate them on how their (work internally with other work can lead to success and economic health departments that in the city. interface with businesses) 1.1.2. Continually review the planning application and High In Progress permitting procedures to identify process (ADU by right process, improvements. comprehensive form updates) 1.2.1. Continue the implementation of the Customer High In Progress Self-Service Program within the permitting (12 permits now available, application system, Energov, to increase the goal to have 200 permits number of applications available on line. available online) 1.2.3. Increase the ability for customers to track the High In Progress status of their projects on line. (Building permits now available) Progress Ongoing Ongoing 10% 25% Council Memo -Eco nomic Dev. Subcommittee and Economic Dev. Strategic Plan Update January 25, 2024 Page 6 1.2.4. Promote the pre-application program to help High In Progress identify major issues early in the entitlement (Information included in process. discussions with developers and new companies) 1.2.5. Enhance the Welcome to Carlsbad Program for Medium Complete new businesses by providing information and (Available on the city's resources on the pre-application program, business page) permitting process, and business resources. 1.2.10 Utilizing Energov, track turnaround times for Medium In Progress planning applications and permits to identify (CD staff tracks areas to increase efficiency. turnaround times, enabled streamlined signage application) 1.3.1. Create Small Business and Entrepreneur Medium In Progress Symposium on basic and critical issues for small (Partnership with SBDC business owners. Topics could include and Carlsbad Libraries) marketing, social media, finance, human resources, access to capital, technology, and more. 1.3.2. Partner with business organizations to develop Low In Progress a shop local initiative to encourage patronage (in conjunction with at Carlsbad businesses. Chamber, CVA and Visit Carlsbad) 1.4.1. Evaluate signage requirements for businesses. Low Not started Goal 2: Develop and Attract Workers & Talent Develop and attract workers and talent by providing skills, resources, and support for current and future jobs. Strategy Action Priority Status 2.1.1. Enhance Life in Action tools to assist in talent High In Progress attraction for Carlsbad businesses in key (New interface is industries -transitioning Life in Action Recruiter complete. Due to launch tool from a pilot to an ongoing resource for in January) Carlsbad businesses. Pilot connected 40 companies with 400 employees. Funding proposal would go from pilot to long-term and 2x pa rticipation. 2.2.2. Promote the city's existing digital tools to High Complete connect residents, businesses, and tourists to (via newsletter and social resources the city offers. media) Ongoing 100% Ongoing 33% 75% 0% Progress 90% 100% Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Pl an Upd ate January 25, 2024 Page 7 2.1.3. Enhance and promote educational workshops Medium In Progress provided by the Library, Parks and Recreation (Several workshops taken and other resources that provide skill place) development to Carlsbad's workforce. 2.2.1. Conduct an initial study for outdoor Wi-Fi at Medium In Progress city facilities and other critical areas for the (Data gathering, research, public. and cost estimation have been completed) 75% 50% Life in Action Recruiter: To make it easier for employers to connect with potential talent, staff are enhancing the "Life in Action Recruiter" tool. As part of the FY 2023-2024 budget, the Economic Development Subcommittee recommended additional funds for the build-out of the recruiter platform, which was in turn approved by the City Council. The upgraded interface provides a more user-friendly and efficient pla t form for employers to recruit interested workers. By streamlining this process and making t he platform more efficient for employers, we aim t o facilit ate better matches bet ween local businesses and job seekers, t hereby optimizing t he recruitment process. The upgraded platform is currently in beta testing as the final kinks get worked out and will launch in January/February 2024. Collaboration with Local Partners and Educational Institutions: Staff are actively collaborating with local pa rtners and educat ional institut ions to increase st udent awareness of job and internship opportunities in Carlsbad. For example, staff are in conversations with CSU San Marcos to determine how to better provide connectivity options, like shuttles, to Carlsbad employers. Staff are also working with the university and the San Diego North Economic Development Council to promote campus housing as an option for summer interns. Through this program, CSU San Marcos will offer blocks of rooms to summer interns at Carlsbad companies at a discounted "rack rate". The program, set to begin in Summer 2024, removes a sign'ificant barrier for interns -affordable options for summer housing. Several Carlsbad employers have expressed significant int erest in the program and laud the idea to expand their ability t o hire interns from across t he count ry. Expanding the Job Readiness Room: The Job Readiness Room (JRR), offered through Carlsbad Libraries completed the pilot phase in July 2023. The program partners learned several lessons about demand, indust ry interests from participants, and usabilit y by businesses. The program succeeded in providing new skills to more t han 100 Carlsbad resident s and workers, but fell short on placements wit hin Carlsbad companies, at roughly 15% placement/success in finding a new job. In debriefing with Carlsbad employers, it was evident that while the program did upskill candidates, it was too challenging to break outside their standard hiring pract ices. As such, the JRR pa rtners reconfigured the program t o provide more specific upskilling pathways for newly hired employees. In this form, the program will allow for 25 small-to-medium-sized Carlsbad employers to provide 15-20 hours of job training for new employees once a hire has been made. This pivot, which will be promoted through the Chamber of Commerce, better aligns with current employer hiring practices and continues to provide a more qualified Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Pl an Update January 25, 2024 Page 8 workforce that supports the city's competitiveness. Evaluating Micro mobility Options: To improve accessibility to employment centers, staff continues to monitor North County Transit District's efforts to revive the former Carlsbad Connector Program to provide first and last-mile connectivity from transit hubs to major employers and business parks. This initiative, which aligns with the city's Transportation Demand Management plan is also how the city would propose to move students from CSU San Marcos to the business park. It aims to address transportation barriers that might prevent talented individuals who do not live within close proximity to Carlsbad from accessing employment opportunities. By improving connect ivit y and transit options, Carlsbad is making it easier for workers to commute, thereby expanding t he t alent pool available to our local businesses. Goal 3: Grow and Support Key Industries Grow and support key industries by providing and creating resources for these industries to thrive in Carlsbad's economy. Strategy Action Priority Status 3.1.1. Evaluate micro-mobility options in the Village High In Progress and coastline to make Carlsbad more (Potential collaboration connected and accessible. with the City of Encinitas) 3.4.1. Continue to support Carlsbad business High In Progress organizations that maintain the tourism (Regular meetings with economy in Carlsbad . Visit Ca rlsbad and hoteliers, re- establishment of the CTBID under '94 law) 3.2.1. Use business data and recent business surveys Medium In Progress to assess and engage with industry clusters to (2024 business survey is develop support for their expansion, attraction, live and open for and retention. (Biennial Business Survey) responses) 3.2.2. Utilize partnership with Innovate 78 to connect Medium In Progress Carlsbad businesses with regional resources. (Regional collaboration pivoting in 2024 to be more resource-driven) 3.3 .1. Promote the city's business locator website to Medium Complete businesses looking to move to Carlsbad, (Via newsletter and social developers, brokers, and investors. media) 3.3 .2. Host industry advisory groups with leaders in Medium Complete key business clusters, with a specific emphasis (Roundtable series on the innovation economy. captures all key industries) Progress 75% Ongoing 50% Ongoing 100% 10% Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Plan Update January 25, 2024 Page 9 Industry Roundtables Beginning on August 30, 2023, these roundtables have successfully convened leaders from key industries in Carlsbad, including Tech, Sports and Active Lifestyle, Cleantech, and Life Sciences sectors. These discussions foster industry-specific dialogue and insight into future challenges and opportunities. Plans are set to host 12 such discussions annually beginning in 2024. Broker Connections Staff continue to maintain relationships with the commercial real estate brokerage community in Carlsbad. Continuous engagement with the commercial real estate brokerage community has been pivotal in enhancing business intelligence and keeping Carlsbad at the forefront as a preferred business location. Innovation Day Carlsbad's participation in Innovation Day hosted by Connect, an organization committed to innovation in San Diego County, at Petco Park underscored the city's role as a regional innovation hub. The event attracted over 3,500 attendees, including more than 100 Carlsbad residents. Notably, Carlsbad companies such as Aptera, Shipcalm, Airspace Technologies, Argonaut Manufacturing, and Viasat were featured. Connect's commitment to host a flagship event in Carlsbad in 2024 further reinforces this positioning. Regional Collaboration The City of Carlsbad continues to participate in the lnnovate78 collaboration along with the cities of Escondido, Oceanside, San Marcos, and Vista. The collaboration allows the five cities to compete collectively as a North County region, instead of independently and against one another. Starting in 2023, the collaboration made a pivot to work with the San Diego North Economic Development Council to bolster North County attraction and retention efforts. Beginning in 2024, the collaborative will shift its focus from lnnovate78 as a marketing and promotional initiative and invest more heavily in direct services and support for startups, entrepreneurs, and innovation economy companies. This will be done through mutual support of Connect, in which Carlsbad was already a supporter. Economic Intelligence The ongoing biennial business survey is a critical tool for understanding and responding to economic trends and needs. The 2024 survey is currently in progress, with results expected to be presented in the first quarter of 2024. Outreach is being conducted through city-owned channels as well as partner organizations. Businesses can fill out the survey through January at carlsbadca.gov/BusinessSurvey. Council Memo - E conomic Dev. Subcommittee and Econ omic Dev. Strategic Pl an Update January 25, 2024 Page 10 Goal 4: Connection, Engagement & Placema king Encourage a sense of connection in our community by building upon our successes and promoting access to economic development resources and opportunities. Strategy Action Priority Status 4.2.1. Partner with local business organizations to High Com plete implement placemaking strategies such as {Contracted with CVA on holiday lighting and a banner program to successful implementation enhance the sense of place and community. of the banner program and holiday lighting) 4.1.2. Incorporate business and economic High In Progress development activities into the weekly City {14 business related items Manager newsletter, city calendar, and social featured in the city media to foster a sense of pride in local managers update 11 businesses. articles published, 11 newsletters distributed) 4.2.3. Utilize the city's social media platforms to High In Progress showcase Carlsbad's sense of place and {918 posts, 132,000 community. engaged) 4.1.6. Develop a business spotlight program to Medium Complete highlight local businesses. {Small business spotlight in newsletter and social media) - Progress 100% Ongoing Ongoing 100% Life in Action: Recognizing the importance of showcasing Carlsbad as an ideal place to live and work, staff are ut ilizing the Life in Action Program to promote the city as a great place to live and work. Highlighting the unique lifestyle, cultural richness, and career opportunities available in the city, Life in Action engages audiences via persistent social media posts, monthly newsletters, and original content. By effectively communicat ing these attributes, staff aim to attract a diverse and t alented workforce who are drawn not only to the quality of life that Carlsbad affords but also to the career prospect s of key indust ries and businesses. In the last year, Life in Action published 918 social media posts, engaging 132,000 people. Staff also authored 11 articles and published 11 newsletters. Banner Program Since the Banner Program's expansion, it has received numerous compliments from residents, visitors, and businesses. The Carlsbad Village Association {CVA) has effectively managed the Banner Program, expanding it s scale and introducing cost efficiencies. The program's success under CVA's management has been notable, enhancing the city's visual appeal and community engagement. This includes more than doubling the program scale, sourcing local imagery, adding a Fall seasonal rotation, and handling storage and maintenance of t he program. Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Plan Update January 25, 2024 Page 11 Discussion Carlsbad has a history of making strategic decisions to support a vibrant economy. The COVID-19 global pandemic had a significant impact of many business sectors. The City Council moved quickly to create an ad hoc subcommittee and economic response. By any measure the city's response to the COVID-19 pandemic helped many businesses survive. It also brought into clear focus the need to continue to make strategic investments in the economy. The City Council created a standing Economic Development Subcommittee to guide the city's support for business and the economy. In 2020, the City Council approved the creation of the Innovation and Economic Development Department that was formed through efficiencies and without the addition of new positions. Around a dozen new programs and partnerships have been piloted since the City Council created a department focused on economic development. The city has expanded its collaboration with industry organizations, educational institutions, and its business organizations like the Carlsbad Chamber of Commerce, Carlsbad Village Association, and Visit Carlsbad. The City Council approved the city's first stand alone EDSP with a corresponding annual Strategic Action Plan. The plan, developed in close collaboration with businesses and the community, has received significant praise. To achieve its goals and objectives there will need to be a continued investment which in turn will support thriving businesses that contribute a significant amount of revenue to the city. That revenue in turn supports the services that make Carlsbad a safe and attractive place for people to locate. In turn, that talent attracts companies. The continued strategic investment in a comprehensive economic development strategy not only benefits the businesses powering our economy but the services all residents enjoy. The City Council decisions over the past four years have significantly supported Carlsbad businesses and laid a strat egy for a vibrant economy into the future. The Economic Development Subcommittee continues to be an important resource for businesses and business organizations to engage with the city. After one year of implementation of the EDSP it is clear the city is on the right track and should continue investing in its implementation. Next Steps The Economic Development Subcommittee will meet on January 30, 2024, at 10 a.m ., to set a calendar of meetings for 2024. The subcommittee will review the 2023 implementation of the EDSP and provide input on the Strategic Action Plan for 2024. This will include potential recommendations for the FY 2024-2025 budget. The 2024 Strategic Action Plan and any budget recommendations will be presented to the City Council for their consideration. Staff will continue to execute strategies and tactics included in the Strategic Action Plan in conformance with the EDSP approved by City Council. Staff will continue to update the Council Memo -Economic Dev. Subcommittee and Economic Dev. Strategic Plan Update January 25, 2024 Page 12 Economic Development Subcommittee on progress and present annual reports to the City Council. cc: Scott Chadwick, City Manager Cindie McMahon, City Attorney Jeff Murphy, Community Development Director Suzanne Smithson, Library & Cultural Arts Director Kristina Ray, Communications and Engagement Director Matt Sanford, Economic Development Manager