Economic Development Subcommittee
Meeting Date:
To:
From:
Item #2:
Recommendation :
July 11, 2022
City Council Economic Development Subcommittee
David Graham, Chief Innovation Officer
Economic Development Strategic Plan Update
{cityof
Carlsbad
Receive an informational report regarding progress on the economic development strateg ic plan, discuss and provide recommendations.
Discussion:
Economic development staff continue to work with RSG Group on the development of an Economic Development Strategic Plan to help guide economic development efforts over the next 3-5 years. This item provides an opportunity to hear an update from staff and RSG Group on the full draft of the strategic plan before it is finalized .
On May 24 and 26, staff hosted two community forums, one using Zoom to enable remote participation , and one in person. These two sessions allowed stakeholders to respond to strategies proposed in the plan before being finalized. After the two hearings at the end of May, RSG worked with staff to develop an outline and began drafting the strategic plan based on their research and analysis and input from businesses, residents, and stakeholder s. On July 6, an initial draft was shared with city department leaders to ensure alignment with ongoing operations and strategies, where possible.
Next Steps:
Staff will finalize the Economic Development Strategic Plan with support from RSG and return to the Subcommittee with a final strategy before presenting th e plan to the full City Council.
Exhibits:
Exhibit 1: Draft Economic Development Strategic Plan
July 11, 2022 Item #2 Page 1 of 11
Exhibit 1
City of Ca
Economic Developme c Plan
Work" Ou
Prepared by RSG, Inc. Updated 7/6/2022
July 11, 2022 Item #2 Page 2 of 11
Executive Summary
The Economic Development Strategic Plan is a roadmap that will guide the City's economic development activities for the next five years. The Strategy comes at a critical time for the City and the community.
Given the pandemic, subsequent recovery, market pressures, and international conflict, it is more important than ever to identify Carlsbad's economic development strategies and to prepare for future challenges. The Strategy provides flexible and agile guidance for Carlsbad to address City Council's goal of economic vitality: fostering a vibrant community.
Carlsbad is proud to have an engaged community, and like so many of the.Cit s previous and concurrent planning efforts, businesses, residents, and stakeholders helped shape he Strategy with their input and feedback. The Strategy has coupled this feedback with data driven i siglits fr , a arket study to shape recommended actions.
Economic development is a collaborative effort, an one d nt, group, or organization. The Strategy thoughtfully involves multi ts, value oca and regional partners, workforce & talent, and the broad and divers pport the community.
Key Findings
• Carlsbad is rich in job opportunities
hub for neighboring cities.
• Key industries include the high wa
which have increased employment b
• Residents are passionat about Carlsbad s smal ttown feel and open space, noting the balance of additiona l developme er,sus pen
• Employers in toui hospitality, nformation & communications technology, and construction hav , iff--icul because of small applicant pool, compet ition, demand for high h cost childcare issues.
• Because the per ess c fusing, businesses would find value in additiona l resour,c s to hel te through the permitting and entitlement process. • gn cost o · · · ro I itive for many employees in enterta inment, hospitality, and tourism in Carlsb
• is a high residents from SD County to Riverside County due to lower housing costs. • The Ctt'y,'. has strong oo munication , but businesses want more focused communication that cuts through aigital clutter: and celebrates their contributions to the community The Strategy is vela . ed around four areas of focus that capitalize on Carlsbad's strengths, while addressing their challenges and opportunities:
Goal 1: Support Small Businesses, Startups, and Entrepreneurs Goal 2: Develop Workforce and Attract Talent
Goal 3: Grow and Support Key Industries
Goal 4: Encourage Placemaking and Engagement
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 3 of 11
In addition, there are 12 objectives and a number of potential strategic actions that are collaborative, and measurable. They are intended to be implemented over a five-year period and they align with the goals and values of the Citywide Strategic Plan.
Methodology
The Concord Group conducted a market study that identified current market conditions and trends in Carlsbad and provided detailed information on demograph ics, employment, and emerging industrie s. The main finding s from the market analysis informed the proposed strategies and ca be found throu ghout the Strategy as they relate to each goal. The full report can be found as an attactiment to the Plan.
The City of Carlsbad is committed to engaging community members i i:t isio~ affecting their lives. In addition to the market study, d a robust engagement strategy a imp e ented that incorporates feedback from residents, business owners, business support rganizations , conomic development resource partners, City Council Economic Development Subc0mmittee, and Cit'¥, st ff. Stakeholder feedback was collected through:
• A resident and workforce workshop
• Four business stakeholder workshops
• Social Pinpoint idea wall
• Meeting s with City staff
• Previous outreach efforts conducted
• Previous outreach efforts for the Cit
• City Council Economic Development Sub om
A SWOT analysis docu om s mentioned above, as well as community and regional assets and oth disa van a es for economic development, and opportunities for the City. After cro y e existing economic development programs, we t e gaps between the identified needs and existing
program s.
Prepared by RSG, Inc. Updated 7/6/2022
July 11, 2022 Item #2 Page 4 of 11
Goal 1: Support Small Businesses, Startups, and 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.
Considerations
• 93% of businesses are small businesses 1
o Residents have indicated they enjoy mom -and-pop retail and re t • Remote work allows those to live in Carlsbad and work elsewhere o 90% of Senior Executives expect to some remote to continue 2 o People choose to live in Carlsbad and work remotely
• Entrepreneurship
o 885 home-based businesses started during the GO ID-19 pandemic o Businesses in Carlsbad for less than a year, 4 • % were startups 3 • Permitting and Entitlements
o Qless
o Guide to Opening an Eating Establishment
o Online permits for simple building permits
• Business Support
o Banner program
o Gift Carlsbad
o Cyber Security Program
o Future technologies impact re
o Partnershi · org - Chamber, CVA, Visit Carlsbad
o Partners Innovate 78, EDCs
o Ombu
Where We Excel
• , and skilled labor force
• Busi atis sbad (82% said satisfaction was excellent or good) 4 • res1
VID
• B m
• M rogram
• Re ar sbad Business Alliance
• Partne snips with local and regional business organizations • Village Barrio Mast r Plan - creating a cohesive vision for the area • Permitting i elines are improving but there is room to grow Challenges We Face
• Historical challenges navigating City permitting system. Processing time and communication are oustanding issues5
• Village Barrio Master Plan - some sections were unclear; staff is working to address this 1 Carlsbad Economic Update FY 20
2 Talent Work s 2021 Survey
3 2022 Carlsbad Business Report
4 2022 Carlsbad Business Report
5 May 2021 Cities GPS Report
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 5 of 11
• Businesses express frustration and confusion with signage requirements • Some businesses and developers find Zoning Code confusing • Perception of land use policies being outdated and lack flexibility • The growth management plan needs updating
• The nature of work is changing. City has not designed programs around these changes Objectives
Objective 1.1: Educate the public on the permitting and entitlement process and provide City staff wit h knowledge and resources to work with businesses and provide such information Objective 1.3: Empower small businesses and entrepren
successful in Carlsbad
Objective 1.4: Embrace the changing nature of w at may for Carlsbad businesses
Objective 1.5:
businesses
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 6 of 11
Goal 2: Develop and Attract Workers & Talent
Develop and attract workers and talent by providing skills, resources, and support for current and future jobs.
Context
• Carlsbad has approximately 80,000 jobs
• Carlsbad has 1.6 jobs to labor ratio (inflow of employees from other ci ies). Highest job/labor rat io in surveyed North County cities
• 23. 7% of the Carlsbad labor force (11,416 employees} work in Car'lsbao 23.6% of labor force (11,370 employees} works in Oceanside and 18.9% work in th C"ty of. a Diego • Percentage of residents employed in home city is higher i~ arlsbad tha an other city • Pre-pandemic, unemployment rate was 2.9%; it spiked eapv in the pandemic a has gradually improved back to pre-pandemic levels
• Approximately 60% of residents have bachelor's clegrcee; approximately 25% have-graduate or professional degree
Where We Excel
• Desirable demographics and a large, · - skill
• Carlsbad is an employment hub for · s
• Excellent community amenities and
recreational facilities, in a safe and s
• Life in Action talent attraction progra
• Key industries includ tife Sciences, Te nd Cleantech, all of which have increased emp loyment betwe and aying industries (over $100k annual wages}6 • Six colleges and u · · aCosta, Cal State San Marcos, UC San Diego, National Universi
Challenges We Face
B1 nesses"'clr xpe iencing di iculties in hiring because of small applicant pool, competition, de and for highe wages, high c st of living, childcare issues7 M . bility
Most employee use: car, carpool, bus. Few employees use the rail system8 0ver half of wo kforce is in hospitality , leisure, retail/wholesale live outside of the city9 o Chai enging to get around city because of traffic, lack of mobility options High Cos of living and Housing
o Betwee,n 2011-21, Carlsbad median income increased 40.2%; average income increased
47.2%. Population of households that make less than $100k decreased 18.2%; population of households that make over $150k increased 16.9%. Trend projected to continue over next 5 years10
o Hospitality and other industries that support visitors are struggling to get workers because of cost of living
6 2022 Carlsbad Business Report
7 BW Research Partners hip Biennial Business Survey
8 Business Outreach
9 Cities GPS
10 The Concord Group 2022 Market Study
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 7 of 11
o As of 2019, 40% of renters in Carlsbad earned over $100,000. Percentage of renter s earning over $150,000 increased 125% from 2014 to 201911 o Increase of inflow of residents from LA and SF and outflow to Riverside County from 2019 to 2020. Riverside County has relocation appeal for lower hou sing costs12 Objectives
Objective 2.1: Enhance workforce training and talent attraction resources indu stries
Objective 2.2: Increase broadband connectivity throu ghout the com Objective 2.3: Partner with K-12 and higher educational instftutions to support talent development and linkages with key industries
11 The Concord Group 2022 Market Study
12 The Concord Group 2022 Market Study
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 8 of 11
Goal 3: Grow and Support Our Key Industries
Grow and support key industries by providing support and resources for key industries in Carlsbad's economy.
Context
• Macro disruptions
o Supply chain, inflation, fuel prices, Russian invasion of Ukraine have led to disruptions and instability for businesses
• Office space
o High job to labor market and strong forecasted populatio grow h of households earning over $100K over the next five years may fuel Class A ffice space13 o The majority of inventory in Carlsbad is Class B, whicli as more esih t during economic downturn and in Ql 2022; net absorption of 66 , 1le class A has ne a sorption of -4K o Carlsbad holds a higher share of class A office space in North County (20t(, sh.,are) compared to its neighboring cities "V'
o The average gross rents ($34) are lower tha No h Cou fy average ($44} and lower than neighboring Vista ($38}
• Growing and Key Sectors
o The City of Carlsbad generate, the bulk of its gross re io . I product (GRP) from Manufacturing. Manufacturin i also arges industry l::l e ployment o Professional, scientific, and tee meal services represent a large portion of the City's GRP.
These sectors include Tech, Life Sciences and tM r innovation industries . Continual growth anticipated due to resilien~ o reeession
o In the San Diego M tro, rofessional Services Employment industries saw minimal impact during CO\llD- ecessiona11y period. I dustry shows little growth potential within the MSA • Data Arocessin i s~ ng str n est growth and shift share potential within the Pro essio al entices iniftlst-rv.
o Several medical field offices uses ·o an Diego MSA saw declines during the initial COVID ecession perio , ut re recovering and poised for growth in the next five year period --.. -~, utpatient care c nters ('19-'20 3.5% growth, '21-'26 3.3% forecasted growth) saw growth during,,COVID-recession period, with strong forecasted shift share of near y 8% over the next five -year period
o Scientific Research and Services sector has seen steady growt h since 2009. May have a negative shifts are in the next few years as more businesses move into region • Hosp it Ii I. Ente ai ment / Tourism
o Hospi ali and Tourism has seen largest employment decline from 2018-2020, driven by the pan,demic along with challenges associated with finding and retaining workers and reopening in an uncertain environment 14
o Leisure & Hospitality shows 8% growth in SD MSA and 34.1% shift share in next 5 years15 o From 2010 to 2019, the City of Carlsbad was top performer in growth of arts, entertainment, and recreation sector
Where We Excel
l 3 The Concord Group 2022 Market Study
14 BW Research Partnership Biennial Business Survey
15 The Concord Group 2022 Mark et Study
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 9 of 11
• Economic Intelligence and Insights (Ei2) Program
• Tourism attractions: Nature preserves, parks, natural landscapes, open space, lagoons, wildlife corridors, Legoland, golf courses, flower fields
• Partnerships with business organizations
• Between 2010 & 2020, Carlsbad businesses attracted a total of $23.36 billion in venture capital 16 o Life Sciences industry cluster accounted 66% of total investments from 2010 through 2020, followed by the ICT industry cluster at 22.8% of total investments o Nearly 16.2 patents are obtained per 1,000 workers, outpacing tech hubs such as San Francisco and San Jose17
• Carlsbad is a hub of employment for the major surrounding citi s its igher level of inflow of individuals who work in Carlsbad but do not reside in City fu Is potent,a de and for high end class A office space
• Life Science office market is competitive in Carlsbad. 0f Life Science office mar et in the region:
Carlsbad, Downtown SD, La Jolla UTC, and Kearny " sa, Carlsba as the seconH west rents at $28.52/sf behind Kearny/Serra Mesa. In 2021, Carl ba had lo e vacancy rate and the second highest net absorption behind La Jolla UTC18
• Hotels have CTBID to help promote Carlsbad and attract visitors • Doing Business in Carlsbad (StorymaP.
Challenges We Face
• Sports Innovation and Design, and H
employment between 2018-2020 19
• COVID recession ha ·mpa sorption of office space for Carlsbad with a dip to -56K in 2020 et abs reached 289K and 2019 168k, showing sensitivity to e
• Desire for mor n ransportation to move workers to and from jobs • High cost of liv employees in entertainment, hospitality , and tour" ·
Objective
0 es to improve mobility for visitors, residents, and workforce 0 businesses in key sectors with data and resources they need to thrive in Ca
Objective 3.3: P. ovide concierge services to businesses in growing industries or sectors, such as health care, life sciences, and the innovation economy, that are looking to relocate or expand in Carlsbad
Objective 3.4: Support businesses in tourism, hospitality, and entertainment, while balancing tourism with the needs of our residents
16 2022 Carlsbad Business Report
17 Carlsbad Economic Update FY20
18 The Concord Group 2022 Market Study
19 2022 Carlsbad Business Report
Prepared by RSG, Inc.
July 11, 2022
Updated 7/6/2022
Item #2 Page 10 of 11
Goal 4: Encourage Place making and Engagement
Encourage a sense of connection in our community by building upon our successes and promoting access to economic development resources and opportunities.
Where We Excel
• Engaged community
• Joint communications with the Chamber of Commerce, CVA, and Visit Carlsbad • City Manager's newsletter
• Citizens Academy
• Biennial business survey
• Carlsbad Connects App
• Economic Intelligence and Insights (Ei2) Program
Challenges We Face
• Cutting through the digital clutter
• Economic development programs are not well branded (except Life in Action) • The City does not have a cohesive economic deve op ent stra eg that guides programs and activities
• The City does not have a consolidated, specific econom1 development website oriented toward businesses with current information o ,.,:>.rograms and activitie Objectives
Objective 4.1: Build upon the successe o
City's economic develog ent programs
munication efforts in the City to promote the
Objective 4.2: ortunities to strengthen the connection between people and th
and right of way to create a sense of place
Prepared by RSG, Inc. Updated 7/6/2 022
July 11, 2022 Item #2 Page 11 of 11
ECONOMIC DEVELOPMENT STRATEGIC PLAN
UPDATE
Recommendation: Receive an informational report regarding progress on the Economic Development Strategic Plan, discuss and provide recommendations.
Item 2
Economic
Revitalization and
Development
Strategy
Economic Development
Subcommittee
July 11, 2022
Agenda
Executive Summary & Key Findings
Methodology
Economic Development Goals & Objectives
Next Steps
Feedback and Direction
Key Findings
Carlsbad is rich in job
opportunities
Key industries: life
sciences, technology, and
clean tech
Residents are passionate
about Carlsbad’s small-
town feel
Employers in tourism,
hospitality, clean tech, ICT,
and construction report
difficulties in hiring.
Key Findings
Businesses want help
navigating through the
entitlement process.
The cost of living is
prohibitive for many
employees in
entertainment, hospitality,
tourism.
There is a high outflow of
residents from SD County to
Riverside County
Businesses want focused
communication that
celebrates their
contributions to the
community.
Methodology
Market Study
Resident &
Workforce
Outreach
Business
Engagement
SWOT
Analysis
Identify Goals
and Strategic
Objectives
Create and
Adopt
Strategic Plan
Goal 2: Develop
Workforce and
Attract Talent
Goal 4: Encourage
Placemaking &
Engagement
Goal 3: Grow
and Support Key
Industries
Goal 1: Support
Small Businesses,
Startups, and
Entrepreneurs
15 Goal 1: Support
Small
Businesses,
Startups, and
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.
Considerations
• 93% of businesses are small businesses
• Remote work allows people to live in Carlsbad
and work elsewhere
• Entrepreneurship
• Permitting and Entitlements (Qless, Guide to
Opening an Eating Establishment, online
permits)
• Business Support (Banner program, Gift
Carlsbad, Cyber Security Program)
• Carlsbad Economic Update FY20
• Talent Works 2021 Survey
• 2022 Carlsbad Business Report
18 Desirable demographics; educated and skilled
labor force
Historical challenges navigating City permitting
system
Business satisfaction of doing business in Carlsbad
(82% said satisfaction was excellent or good) Village Barrio Master Plan - needs clarifications Economic resilience and agility Frustration and confusion with signage Partnerships with business organizations Zoning Code can be confusing Village Barrio Master Plan – creating a cohesive
vision for the area
Perception of land use policies being outdated
and inflexible
Permitting timelines are improving but there is
room to grow Growth Management Plan needs updating
The nature of work is changing, and the City has
not designed programs around these changes
Goal 1: Support Small Businesses, Startups, and Entrepreneurs Where We Excel Challenges
Goal 1: Support
Small
Businesses,
Startups, and
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.
Committee Input
Goal 1
Objectives
Objective 1.1: Educate the public on the permitting and entitlement process and provide City staff with knowledge and resources to work with businesses and provide such
information
Objective 1.2: Improve customer service experience during the permitting process
Objective 1.3: Empower small businesses and
entrepreneurs with resources they need to be successful in Carlsbad
Objective 1.4: Embrace the changing nature of work and
what that may look like for Carlsbad businesses
Objective 1.5: Increase engagement and support for
women, minority, veteran, disabled-owned businesses
Goal 2:
Develop
and
Attract
Workers &
Talent
Develop and attract workers and
talent by providing skills, resources,
and support for current and future
jobs.
Considerations
• Carlsbad has approximately 80,000 jobs
• Carlsbad has 1.6 jobs to labor ratio (inflow of
employees from other cities)
• 23.7% of Carlsbad labor force work is in Carlsbad,
23.6% in Oceanside, 18.9% in the City of San Diego
• Percentage of residents employed in home city is
higher in Carlsbad than any other city
• Unemployment has gradually improved back to
pre-pandemic levels
• Approximately 60% of residents have bachelor’s
degree; approximately 25% have graduate or
professional degree
23 Desirable demographics and large, educated, and
skilled labor force
Businesses are experiencing difficulties in hiring:
small applicant pool, competition, demand for
higher wages, cost of living, childcare issues
Carlsbad is an employment hub for surrounding
cities Mobility
Excellent community amenities and services,
including top rated schools, medical, and
recreational facilities
High Cost of Living and Housing
Life in Action talent attraction program
Key industries include Life Sciences, Technology,
and Cleantech
Six colleges and universities within 30 miles
Goal 2: Develop and Attract Workers & Talent
Where We Excel Challenges
Goal 2:
Develop
and
Attract
Workers &
Talent
Develop and attract workers and
talent by providing skills, resources,
and support for current and future
jobs.
Committee Input
Objectives
Objective 2.1: Enhance workforce training and
talent attraction resources to support Carlsbad’s key
industries
Objective 2.2: Increase broadband connectivity
throughout the community to promote digital
equity
Objective 2.3: Partner with K-12 and higher
educational institutions to support talent
development and linkages with key industries
Goal 3:
Grow and
Support
Our Key
Industries
Grow and support key industries by
providing support and resources for
key industries in Carlsbad’s
economy.
Considerations
• Macro disruptions (supply chain, inflation, fuel, Russian invasion of Ukraine)
• Average office rents ($34) are lower than North County average ($44) and lower than neighboring Vista ($38)
• Growing and Key Sectors: manufacturing, professional, scientific, and technical services; tech, life sciences, innovation industries
• Hospitality and Tourism has seen largest employment
decline from 2018-2020
• Leisure & Hospitality shows 8% growth in SD MSA and 34.1% shift share in next 5 years
• Carlsbad top performer in growth of arts, entertainment, and recreation sector
28 Economic Intelligence and Insights (Ei2) Program
Sports Innovation and Design and Hospitality are
key industries, both of which decreased
employment between 2018-2020
Tourism attractions (nature preserves, parks,
lagoons, etc.)
COVID recession had impact on absorption of
office space
Partnerships with business organizations Desire for more connected and frequent public transportation
From 2010-20, businesses attracted $23.36B in
venture capital
High cost of living for is prohibitive for many
employees in entertainment, hospitality, and
tourism to live in Carlsbad
Hub of employment for surrounding cities
Life Science office market is competitive
CTBID
Goal 3: Grow and Support Our Key Industries
Where We Excel Challenges
Goal 3:
Grow and
Support
Our Key
Industries
Grow and support key industries by
providing support and resources for
key industries in Carlsbad’s
economy.
Committee Input
Goal 3
Objectives
Objective 3.1: Evaluate opportunities to improve
mobility for visitors, residents, and workforce
Objective 3.2: Connect businesses in key sectors
with data and resources they need to thrive in
Carlsbad
Objective 3.3: Provide concierge services to
businesses in growing industries or sectors, such as
health care, life sciences, and the innovation
economy, that are looking to relocate or expand in
Carlsbad
Objective 3.4: Support businesses in tourism,
hospitality, and entertainment, while balancing
tourism with the needs of our residents
Goal 4:
Encourage
Placemaking
and
Engagement
Encourage a sense of connection in
our community by building upon
our successes and promoting access
to economic development resources
and opportunities.
32 Engaged community Cutting through the digital clutter Joint communications with the Chamber of
Commerce, CVA, and Visit Carlsbad
Economic development programs are not well
branded (except Life in Action)
City Manager’s newsletter The City does not have a cohesive economic development strategy
Citizens Academy
The City does not have a consolidated, specific
economic development website oriented
toward businesses with current information
Biennial business survey
Carlsbad Connects App
Economic Intelligence and Insights (Ei2) Program
Goal 4: Encourage Placemaking and Engagement
Where We Excel Challenges
Goal 4:
Encourage
Placemaking
and
Engagement
Encourage a sense of connection in
our community by building upon
our successes and promoting access
to economic development resources
and opportunities.
Committee Input
Goal 4
Objectives
Objective 4.1: Build upon the successes of the
communication efforts in the City to promote the City’s economic development programs
Objective 4.2: Enhance physical placemaking opportunities to strengthen the connection between people and the places they share
Objective 4.3: Leverage city-owned assets and right of way to create a sense of place
Next Steps
INCORPORATE
FEEDBACK
DRAFT PLAN ED
SUBCOMMITTEE
FULL CITY
COUNCIL
Additional
Input
FUTURE AGENDA ITEMS
• September Meeting Date
• Talent/Workforce Strategy
Adjourn
Thank you!