Economic Development Subcommittee
Meeting Date:
To:
From:
Item #5:
Recommendation:
May 9, 2022
City Council Economic Development Subcommittee
David Graham, Chief Innovation Officer
Economic Development Update
{city of
Carlsbad
Receive an informational report regarding city economic development activities, discuss and provide recommendations.
Discussion:
Economic development staff have been engaged on a number of programs focused on support and growth of Carlsbad's economy. This report provides a summary of notable program s and ongoing activities.
Response to Economic Conditions
This quarter, the COVID-19 pandemic continued to impact supply chains and manufacturing capacity abroad. Some manufacturing operations, as well as entire cities have been locked down to combat an Omicron surge in China, causing supply shortages on a wide range of products from construction material to technology products . There also continues to be a significant semiconductor shortage, with the global backlog on semiconductor orders extending beyond eight month s, and up to two years for certain types of chips. Although these trends originate abroad, they have a direct impact on some Carlsbad manufacturers and business operations.
Domesti cally, most pandemic -related regulations have been suspended, allowing th e economy to continu e its resurgence. Employers now cite talent, supply chain issues, and rising costs as th e biggest challenges to doing business.
To ensure the city remains responsive to the changing situation and is prepared to meet new challenges head-on, staff have leveraged greater in-house economic data capabilities and analytics developed over the past year to publi sh a quart erly economic scan. Staff also publish relevant data on the city's economic development site, carlsbadca.gov/doingbusiness. The city will continue to develop tools to understand the economy, attract businesses, cultivat e talent, and support data-driven econom ic development decision-making.
Carlsbad Tourism BID
At the January 12 TBID meeting , TBID member s appropriated funding to explore a conversion to a '94 Act TBID. As a result, the TBID has retained outside counsel and has selected a consultant to assist with the conversion process, which is anticipated to take six to seven months.
Civitas Advisors has been contracted to support the conversion and is currently analyzing the existing governance structure, financial position, and "service plan" for the TBID before recomm ending specific steps as part of the conversion process.
May 9, 2022 Item #5 Page 1 of 4
The TBID Advisory Board has created a governance subcommittee to work alongside staff and Civitas to ensure transparency and confidence in the process. Staff also report out regularly to the TBID Advisory Board. Staff will return to the Advisory Board once all due diligence is complete and the TBID Advisory Board will consider whether to move forward with the conversion process. Should the TBID Advisory Board decide to recommend moving forward with the process, it would go to the City Council as an ordinance for consideration.
Staff will continue to keep the Economic Development Subcommittee updated on the process.
Banner Program
As noted at the March 14 Economic Development Subcommittee meeting, staff is continuing to work with the Carlsbad Village Association, which was selected to administer the banner program after the Carlsbad Chamber of Commerce and Visit Carlsbad both opted not to pursue the opportunity, on the expansion of the banner program to enhance a sense of place in key retail areas around Carlsbad. As proposed, the expansion would include an additional 73 light pole banners to be distributed in:
Bressi Ranch
La Costa Town Square
The Crossings
The Shoppes at Carlsbad
The newly updated banner designs would add to the existing banners in the Village, Paseo Del Norte/Palomar Airport Road area, and The Forum. The banners incorporate imagery that embodies Carlsbad lifestyle. They help build a sense of place as well as create an inviting atmosphere for residents and visitors.
Future Technologies Report
Staff have engaged Pioneer Partners, a Kansas City-based organization with experience in assessing new technology areas and their impacts, to help develop an assessment of future technologies in Carlsbad.
The report, which is expected to be complete this summer, will analyze the impact of technologies like artificial intelligence & machine learning, SG, internet of things, cybersecurity, autonomous vehicles, and drones on the City of Carlsbad. The report will examine what technologies are likely to have the largest impact on the city, recommend areas the city can better improve preparedness, and look at economic development opportunities where the city has existing - or could potentially develop - industry clusters.
The report is currently in a fact-finding and research phase. Pioneer Partners is researching best practices and program success in other parts of the country that could be replicated in Carlsbad. Staff, along with Pioneer Partners, are also hosting several stakeholder conversations to understand sentiment of key leaders in our region on where potential opportunities may exist.
Life in Action Recruiter
Staff are currently working to scale the Life in Action Recruiter program beyond a pilot phase. In the first six months, the platform received approximately 175 applicants who expressed interest in Carlsbad as a place to live and work . A dozen Carlsbad businesses participated in the pilot program, receiving information from job seekers. As staff work to scale the program, the goal is to engage at least SO May 9, 2022 Item #5 Page 2 of 4
Carlsbad businesses that are hiring, promote t he program to a broader audience, and automate processes.
Workforce Development Pilot
Economic development staff are engaged with Carlsbad library staff, the Carlsbad Chamber of Commerce, EMSI Burning Glass, and Bendable - a startup out of the Drucker Institut e - on a workforce development pilot that would focus on skills-based learnin g to support low and middle -skill job seekers in accessing in-demand career opportunities in Carlsbad. The pilot program would utili ze the library system as a conduit for resident s, stud ents and workers to see in-demand career opport uniti es (provided by EMSI Burning Glass) and use the Bendable platform to access and pursue a free, entry level, career skills certification. Upon completion, candidates could then connect with employers hirin g in those fields throu gh the Chamber of Commerce.
The pilot program is at its formative stages. Should all parties agree to move forward, the model would be built out over the course of a year and could become a transformative model that could be scaled to a regional, state, or national level.
Carlsbad Cybersecurity Awareness Program
Staff is continuin g its work with the San Diego Cyber Center of Excellence to promote basic cybersecurity awareness and provide resources to small businesses that are located in Carlsbad, or suppliers to Carlsbad businesses. Over the course of the pandemic, cybercrimes have increased nationally by 300%.
Many small businesses are becoming victims of cyberattacks and damages to the business are often in the milli ons of dollars. As the City continu es to support business resiliency, cybersecurity awareness is an important area where the city can deploy resources.
In early June, CCOE will launch a joint cohort with other North County businesses to better understand their specific risk profile and vulnerabilities and provide basic awareness training for up to 100 emp loyees per participating business. The program will launch with a briefing from the FBl's San Diego Cyber Task Force.
Business Expansion, Attraction, and Retention (BEAR) Update Over the past several months, economic development staff have cont inued to engage on several large BEAR proj ect s that will yield gains in employment and new investment in the city.
Rampart Bioscience, which recently committ ed to developing a 50,000 square foot facility in the MAKE development on Avenida Encinas, is beginning their tenant impro veme nt process. Economic development staff have assisted the company in working through several perm ittin g delays and will continue to monit or progress.
A prominent sports and active lifestyl e company has chosen to expand its headquarters in Carlsbad with a new facility on Cosmos Ct. Staff are working with the company's real estate representatives to ensure a smooth process in their build out.
May 9, 2022 Item #5 Page 3 of 4
Ultima Genomics, a growing genomics company in San Diego, has also committed to a facility on Cosmos Ct. Staff worked with the company to understand site options in Carlsbad and confirmed the facility met their requirements .
Staff have seen an uptick in small business interest in relocating or establishing new space in Carlsbad - a positive sign. Staff continue to provide support services from identifying suitable locations , to understanding the permitting process and necessary licenses, and identifying appropriate resources to begin operations .
Next Steps:
Staff will return at the next Economic Development Subcommittee with updates to these item s. If desired, committee members can provide input and recommendations.
May 9, 2022 Item #5 Page 4 of 4
ECONOMIC DEVELOPMENT PROGRAM AND BEAR
UPDATE
Recommendation: Receive an informational report regarding city economic development activities, discuss and provide
recommendations.
Item
5 {city of
Carlsbad
ECONOMIC DEVELOPMENT PROGRAM AND BEAR
UPDATE
Updates
• Response to Economic Conditions
• Carlsbad Tourism BID
• Banner Program
• Future Technologies Report
• Life in Action Recruiter
• Workforce Development Pilot
• Cybersecurity Awareness Program
• BEAR Update
{city of
Carlsbad
EVOLVING ECONOMIC CONDITIONS
• Despite waning COVID-19 impact, macro-disruptions continue to affect Carlsbad businesses, some of which have a nexus to COVID-19 o Supply chain issues
o Inflation
o Rising fuel prices
o Russian invasion of Ukraine
o Worker/talent shortage
• Disruptions create a degree of operational uncertainty • With the Economic Insights and Intelligence (Ei2) capability, Car lsbad has thus far been well positioned to anticipate and address oncoming challenges quickly and robustly
{city of
Carlsbad
WORKER/TALENT SHORTAGE
• EDD March unemployment data
o California unemployment rate: 4.2%, (1.6% improvement) o County unemployment rate: 3.4%, (1.3% improvement)
o Carlsbad unemployment rate: 3.1%, (.8% improvement)
• Currently, there are 1.9 open jobs for every unemployed worker • Businesses have challenges retaining workers
• Pressure to increase wages
{city of
Carlsbad
GLOBAL PRESSURES
Several macro-economic disruptions are impacting operations, locally. • Russian invasion of Ukraine has led to increased fuel prices • Manufacturing and supply chain issues related to COVID-19 outbreaks and lockdowns in China
• Global semiconductor shortage is delaying tech products {city of
Carlsbad
INFLATION CONCERNS
• Sustained cost increases are driving concern for businesses • San Diego area prices are up 2.1% over the past two months • Over-the-year prices are up 7.9% (5.6% less food and energy) • Fe
deral Reserve taking action to counter inflation
o Steadily increasing interest rates (.5% rate increase in May) o Will begin to reduce Treasury bonds held in asset portfolio {city of
Carlsbad
RESPONSE – RECOVERY - REVITALIZATION
• Many businesses are struggling to keep up with increased costs and wages • Businesses and industry groups anticipate continued disruptions to oper
ating stability
• Staff are working with business organizations and industry groups to evaluate pote
ntial resources and interventions
{city of
Carlsbad
CARLSBAD TBID UPDATE
• In January, the CTBID Advisory Board voted to evaluate the existing CTBID
bid model authorized by state law and a new governance model (‘94 Act Authorization) which is also authorized by state law • Staff are working with consultant to analyze existing governance str
ucture, financial position, and “service plan”
• There are potential benefits to moving to the new model including long
er-term stability and predictability about the assessment and activities
• Should the TBID Advisory Board recommend the conversion, it would go
to the City Council as an ordinance for consideration
• The process is anticipated to take six to seven months to complete {city of
Carlsbad
BANNER PROGRAM
As discussed at the January 10 and March 14 meetings, staff continues to evaluate an expansion of the banner program • The identified areas for expansion include:
o The Shoppes
o Bressi Ranch
o La Costa Town Square
o The Crossings
• The program expansion would result in a total of 73 new banner
s
• The estimated cost of the expansion is $35,000 in year 1 {city of
Carlsbad
LIFE IN ACTION RECRUITER
Staff are currently working to scale the Life in Action Recruiter program to a level of higher impact. In the first six months, the program received 175 applicants. In scaling the program, the goals are to:
• Engage at least 50 Carlsbad businesses
• Promote the program to a broader audience of candidates • Automate processes to drive efficiency
{city of
Carlsbad
WORKFORCE DEVELOPMENT PILOT
Skilled talent is an important asset Carlsbad needs to continue to grow Economic development staff have engaged with:
• Library staff
• EMSI Burning Glass
• Bendable – a s
tartup out of the Drucker Institute
• Carlsbad Chamber of Commerce
Sta
ff are in the early assessment phase of a potential a workforce development pilot that would focus on skills-based learning to support low and middle-skill job seekers in accessing in-demand career opportunities in Carlsbad {city of
Carlsbad
CYBERSECURITY AWARENESS PROGRAM
Staff are continuing to work with the San Diego Cyber Center of Excellence to promote basic cybersecurity awareness and provide resources to small businesses that are located in Carlsbad, or suppliers to Carlsbad businesses.
• Cybersecurity attacks increased 300% during the pandemic • Average small business damages are in the millions of dollars • Basic awareness training can help businesses be more
resilient
{city of
Carlsbad
NOTABLE ACTIVITIES
BUSINESS EXPANSION, ATTRACTION & RETENTION
• Thermo Fisher
• Ram
part Bioscience
• Ultima Genomics
• Project SAL
• BMW of Carlsbad
• NeoGenomics
{city of
Carlsbad