Monterey City Council
March 26, 2025

Council Chamber
580 Pacific St.

Monterey, California
and Teleconference Location:

McCully Mōʻiliʻili Public Library
2211 S King St.

Honolulu, Hawai’i

CITY COUNCIL AGENDA
Council Study Session
Wednesday, March 26, 2025
4:00 PM – 5:30 PM PDT
Mayor
Tyller Williamson
Councilmembers
Kim Barber, District 1
Ed Smith, District 2
Jean Rasch, District 3
Gino Garcia, District 4
City Manager
Hans Uslar
City Attorney
M. Christine Davi
HOW TO PARTICIPATE IN THIS MEETING:
 In-Person: At the meeting location listed above.
 Remotely via ZoomGov webinar:
o On a computer or smartphone: https://monterey-org.zoomgov.com/j/1616037682 Zoom software must be up-to-date. For help, please use our Zoom Meeting Instructions. o By telephone dial 833-568-8864 (Toll Free), 669-254-5252 (CA) or 646-828-7666 (NY). If one number doesn’t work, please try another. Enter Webinar ID: 161 603 7682 # If asked for a participant ID, press #. To raise your hand: dial *9. Once called upon, dial *6 to unmute.
 This meeting will also stream live for viewing only on youtube.com/cityofmonterey (~10 second delay) and on Comcast Channel 25 (up to 90 second delay).  Written comment: Emailed comments to [email protected] sent no later than ½ hour before the start of the meeting (sooner preferred) are not read aloud but are made available to the Council and public at monterey.gov/submitted-comments.

PUBLIC COMMENT PROCEDURES AND TIME LIMITS:

The total amount of time allocated for public comment on a particular issue and for each individual speaker is generally as follows:

1. Up to three minutes per speaker.

2. For regular City Council meetings, there are two 15-minute public comment periods, one in the afternoon and one in the evening. Speakers may only comment during one session.

3. The total time allocated for public comment:
a. 30 minutes per item – Public Appearance and Public Hearing items b. 15 minutes per item – All other items (including, but not limited to, Consent, Closed Session, Presentations, and Requests to Agendize)
At the time an item is considered, the Mayor will ask those attending the meeting in person to line up at the podium or raise their hands, and for remote participants to use *9 on the telephone or the “raise hand” function in Zoom, if they wish to address the City Council. The maximum amount of time for each person to speak and the total amount of time allotted for each item will be determined based on the number of people indicating an interest in speaking and the amount of business to be conducted on the agenda. In exceptional circumstances and when necessary to ensure a full opportunity for public input, the Mayor may, with the legislative body’s consent, adjust the amount of time allowed for public input and/or the time allotted for each speaker.

CAMPAIGN CONTRIBUTION DISCLOSURE: Pursuant to the Levine Act (Govt. Code §84308), any party to a permit, license, contract, or other entitlement before the Council is required to disclose on the record any contribution, including aggregated contributions, of more than $500 made by the party or the party's agents within the preceding 12 months to any City official. Participants and 3/26/2025 4:00:00 PM
2 agents are requested to make this disclosure as well. The disclosure must include the name of the party, participant, or agent, and any other person making the contribution; the name of the recipient, the amount of the contribution, and the date the contribution was made.

TELECONFERENCE NOTICE
Pursuant to California Government Code Section 54953(b)(3), this City Council meeting will include teleconference participation by Mayor Williamson from the remote location listed above, which shall be accessible to the public pursuant to California Government Code Section 54954.3.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

STUDY SESSION
Study Session items are used to provide information to the City Council and answer their questions to clarify issues. Study Sessions provide a setting for informal discussions between staff, consultants, board, commission,committee members and the City Council regarding specific programs, projects or policies. The Council does not take formal action on the items.

1. Receive Draft 2025 Economic Development Strategy and Provide Feedback on Economic Development Roadmap (Not a Project Under CEQA per Article 20, Section 15378 and Under General Rule Article 5, Section 15061)

ADJOURNMENT
Writings distributed for discussion or consideration on these matters within 72 hours prior to the meeting, pursuant to Government Code § 54957.5, are available at: monterey.gov/submitted-comments and in the City Manager’s Office at 580 Pacific St., Room 1, Monterey, CA 93940 during regular business hours. All comments and materials provided to the Council become part of the public record. Members of the public who comment in any fashion on an agenda item may be subject to the Levine Act which requires disclosure of campaign contributions of more than $500 to an officer of the City within the preceding 12 months.

INTERPRETATION: The Monterey City Council invites and encourages public participation at its meetings.

Requests for language interpretation may be made by contacting the City Clerk at [email protected] or 831-646-3935. The City Clerk will make every effort to accommodate requests for interpreter assistance.

Requests should be made as soon as possible in advance of any meeting of the City Council. The City is committed to addressing language interpretation requests swiftly in order to maximize public participation.

ACCESSIBILITY: The City of Monterey is committed to including disabled people in all of its services, programs and activities. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact [email protected] or (831) 646-3935.

Notification 30+ hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will be accommodated to the extent feasible. For communication-related assistance, dial 711 to use the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearing amplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at (831) 646-3935 to coordinate use of a device.

CITY OF MONTEREY 24-HOUR SUGGESTION HOTLINES: (831) 646-3799 or [email protected] Upcoming city meetings are listed at monterey.gov/agendas For more information, call (831) 646-3935 Council
Agenda Report
FROM: Hans Uslar, City Manager
Nat Rojanasathira, Assistant City Manager
SUBJECT: Receive Draft 2025 Economic Development Strategy and Provide Feedback on Economic Development Roadmap (Not a Project Under CEQA per Article 20, Section 15378 and Under General Rule Article 5, Section 15061) RECOMMENDATION:

That the City Council receive the Draft 2025 Economic
Development Strategy and Provide Feedback on
Economic Development Roadmap.

VALUE DRIVERS:

Serve as stewards of the City’s financial resources
through sound economic vitality efforts, streamlining
operations, reasonable revenue enhancements, visionary
long-term planning, fiscal transparency, and community
partnerships.

POLICY IMPLICATIONS:

At its goal-setting workshop on January 29, 2025, the
Monterey City Council identified “Fiscal Stewardship:

Economic Development” among one of the most
important priority areas, tied for fifth place. It is within the City Council’s policy purview to review and adopt an
Economic Development Strategy. The City Council is
being asked to receive a draft version of the 2025
Economic Development Strategy and provide feedback on
an Economic Development Roadmap.

CAMPAIGN DISCLOSURE REQUIREMENT (LEVINE
ACT) APPLIES: No.

FISCAL IMPLICATIONS:

There are no fiscal implications to receiving this report. In the future the City Council could choose to authorize the City Manager to hire a full-time Economic Development
Manager in Fiscal Year (FY) 2025-26, the position would be budgeted as part of the FY 2025-26 budget review and approval process for a partial or full year. The City would also incur costs for the hiring of an economic development advisory firm to assist with implementation of the
Agenda Report Highlights
The City Council is set to receive the
Draft 2025 Economic Development
Strategy (EDS).
 The strategy aims to enhance
Monterey's economic and fiscal
vitality while maintaining its quality
of life and historic charm.
 The hospitality industry is the
lifeblood of Monterey’s economy,
directly funding core city services.

However, with increasing
competition regionally, the City
cannot take its position as a
hospitality leader for granted.
 The Draft EDS features a SWOT
Analysis and draft Vision and Goals
 The Draft EDS includes strategies
and tactics such as incentivizing
hotel modernization, improving
business district infrastructure, and
leveraging marketing opportunities.
 Next steps involve further
stakeholder engagement, refining
the strategy, and potentially hiring
an Economic Development Manager
by winter 2025/2026.

Date: 3/26/2025
Item No.: 1.

Council Special Meeting, 3/26/2025, Item No. 1., Item Page 1, Packet Page 3 №10/24
Economic Development Strategy, or implementation of Enhanced Infrastructure Financing Districts (EIFDs), which could take place in the current or future fiscal year. Approval of these costs would be subject to the City’s Purchasing Policy, which determines whether the services agreement requires Department Head, City Manager, or City Council approval based on the cost of the services agreement.

ENVIRONMENTAL DETERMINATION:

The City of Monterey determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA)(CCR, Title 14, Chapter 3 (“CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or any reasonably foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

ALTERNATIVES CONSIDERED:

The City Council could choose not to receive the Draft 2025 Economic Development Strategy or not provide feedback on the Economic Development Roadmap, but that is not recommended.

DISCUSSION:

The Case for an Economic Development Strategy
Economic Development was seen as a prime opportunity by the majority of councilmembers at the January 29, 2025 goal-setting workshop and it was also identified as one of the most important priority areas for the City of Monterey (tied for fifth-most important).

Staff has prepared a Draft 2025 Economic Development Strategy (attached). The draft contains the following building blocks:
 A newly-defined vision and goal for economic development in the City;  A review of selected economic and employment data, and a rough analysis of the City’s economic development Strengths, Weaknesses, Opportunities and Threats (SWOT);
 Opportunities for additional stakeholder engagement;
 Preliminary economic development strategies; and
 An economic development implementation roadmap.

A Draft 2025 Economic Development Strategy (EDS) is a first step toward encapsulating feedback received from Councilmembers and the community to date. City staff plans additional engagement with the City Council, business community, industry leaders, and residents.

Tourism remains and will continue to be the top economic driver for the City of Monterey. The City’s partnerships with hospitality groups such as the Monterey County Hospitality Association (MCHA) and destination marketing organization See Monterey remain strong. The City has supported economic development efforts such as supporting destination marketing, collaboration with business and industry, and investing in the Monterey Conference Center.

Council Special Meeting, 3/26/2025, Item No. 1., Item Page 2, Packet Page 4 №10/24
There are now opportunities for the City to implement a long-term economic development strategy that supports the high quality of life residents expect and a vibrant and thriving visitor experience that will keep visitors in Monterey longer and bring them back to our community.

In Monterey County, competition in the hospitality industry has never been fiercer. There are a total of 2,039 hotel rooms planned or under construction in the cities of Marina, Pacific Grove, Sand City, Salinas, and Seaside. In Pacific Grove and Sand City, construction is underway on the 101-room Kimpton Hotel and the 215-room Courtyard and Residence Inn by Marriott, respectively. With the planned Grand Hyatt in Seaside, American Tin Cannery Hotel in Pacific Grove, and the AC Hotel and Element Hotel in Marina and others, there are an additional 1,723 rooms in the pipeline.

The City of Monterey cannot take its position as a regional leader for the hospitality sector and other industries for granted. The City should make significant long-term investments in our infrastructure and replace or rehabilitate City-owned assets in our business districts such as Old Monterey, Lighthouse, Cannery Row and North Fremont.

There are vast opportunities to enhance the quality of life, visibility, sense of place, accessibility, and walkability of North Fremont Street, Old Town, Lighthouse Avenue, Old Fisherman’s Wharf, and other business areas. One of the biggest challenges is coordinating efforts among business owners, property owners, business associations, and other partners, as well as identifying and implementing sustainable funding mechanisms to fund these improvements. An Economic Development Strategy will lay the groundwork for that very purpose.

Economic Development Financing Mechanisms
Newer mechanisms exist in California that can help facilitate the financing of infrastructure, economic development, and housing efforts:
 Capturing value by charging for higher density zoning to pay for public infrastructure and amenities.

Historically, cities used Redevelopment Agencies (RDAs) to capture values from zoning right changes (“upzoning” to allow for more density), but when the State dissolved RDAs in 2012, a valuable tool for funding affordable housing and economic development was lost. Recently, many cities have traded in approving additional density in exchange for public infrastructure such as parks, streetlights, and other amenities. The City of Monterey, as part of the State-approved Housing Element, has already “upzoned” areas to increase density in certain areas but has an opportunity to explore additional zoning density and development agreements to create taxable value.  Utilize tax increment financing to fund infrastructure investments.

Post-redevelopment, some new tax increment financing tools have emerged in California. Enhanced Infrastructure Financing Districts (EIFDs) utilize property tax increment revenues generated within a specific geographic area. Community Revitalization and Investment Authorities (CRIAs), which have a greater emphasis on affordable housing with low and moderate income set-aside requirements, are also becoming more common in California. Climate Resilience District (CRDs) help fund sustainable infrastructure, green spaces, and renewable energy solutions to mitigate climate risks such as flooding, heat waves, and sea level rise. EIFDs, CRIAs, and CRDs could help fund economic development efforts in key geographic areas, including Alvarado Street, Calle Principal, North Fremont Street, and Lighthouse Avenue.

Council Special Meeting, 3/26/2025, Item No. 1., Item Page 3, Packet Page 5 №10/24
 Federally funded programs.

Although limited and often restrictive, there may be state and federal funding available for infrastructure needs. The Inflation Reduction Act (IRA) offers tax credits and rebates for individuals and tax-exempt financing for projects to support private sector investment.

The bipartisan Infrastructure Investment and Jobs Act provides funding for transportation infrastructure (roads, bridges, public transportation, climate resiliency, brownfields cleanup, and electric vehicle infrastructure). It is noteworthy that federal funding is currently volatile and uncertain, as several federal grants have been nixed.  State funded programs.

State funding is available utilizing Proposition 4 (Parks, Environment, Energy, and Water Bond of 2024) and other State funds. The Infill Infrastructure Grants and Catalyst Program offers $1 million to $30 million awards for affordable housing, housing infrastructure, and transportation projects. The Affordable Housing and Sustainable Communities (AHSC) Program offers $1 million to $7.5 million grants for infill projects, and gap funding for infrastructure for affordable residential and mixed-use projects. The Multifamily Housing Program (MHP). These state funding opportunities should be further explored.

Economic Development Vision and Goals
Proposed Economic Development Vision: Monterey will maintain its outstanding quality of life for residents by strengthening the community’s economic and fiscal vitality. It will do so by embracing its historic charm, protecting the coastal environment, supporting affordable housing for the community’s workforce, and fostering sustainable tourism through innovation and partnerships.

Proposed Economic Development Goals:

1. Remaining Competitive in the Hospitality
Marketplace through Quality of Place:

Foster the modernization and increased appeal
of outdated amenities and assets, including
hotels, retail areas, and business districts.

2. Sustainable Redevelopment: Prioritize
redevelopment and adaptive reuse of
underutilized properties to meet modern
economic needs and identify funding
solutions to support those efforts.

3. Business Retention, Attraction, and
Promotion through Collaborative
Partnerships: Strengthen coordination with
business associations, commercial real estate
brokers, business districts, industry associations, and destination marketing organizations

4. Economic Diversification: Continue to focus on and retain the region’s existing economic strengths in the fields of hospitality, military, education, and healthcare, while exploring new growth industries, particularly with regard to high-wage jobs that support these sectors.

Council Special Meeting, 3/26/2025, Item No. 1., Item Page 4, Packet Page 6 №10/24

5. Affordable Workforce Housing Solutions: Develop strategies to address the current lack of workforce housing affordability that hinders the attraction and retention of talent in all industries.

Economic Development Strategies and Tactics
The draft economic development strategies and tactics are sorted by the goals listed above, and identify the level of complexity, the responsible party (e.g., City, property owners, business, business associations, or a combination thereof), and the support role to implement each strategy or tactic.

Some of the many draft strategies and tactics listed in the draft document include:
 Incentivizing hotel and lodging modernization through tax incentives and updated design guidelines
 Updating façade improvements, signage, and merchandizing in business districts  Improving placemaking, lighting, wayfinding, infrastructure revitalization and maintenance through Enhanced Infrastructure Finance Districts and other funding mechanisms
 Analyzing and implementing parking policies and technology that support customer turnover and access to businesses
 Leveraging and coordinating marketing and promotional opportunities between See Monterey and business associations
 Developing a special events and signature events strategy  Reviewing vacant or underutilized properties as potential redevelopment sites, and identifying funding streams for private investment
 Designating specific business districts for targeted revitalization efforts  Activating temporary uses of vacant space, such as pop-up shops, art installations, and event spaces
 Establishing a business attraction and retention program that tracks business concerns and provides workshops and marketing opportunities through partners such as the Central Coast Small Business Development Center (SBDC)
 Supporting workforce development and talent attraction efforts  Continuing to investment in the Monterey Conference Center as an economic driver  Continuing to focus on and retain existing economic strengths in hospitality, military, education, and healthcare, while exploring new growth industries, particularly in highwage jobs that support these sectors.  Fostering employer-led workforce housing initiatives
The complete list of draft strategies and tactics is described in detail in the attached Draft 2025 Economic Development Strategy document.

Next Steps: Economic Development Roadmap
This attached Draft 2025 Economic Development Strategy (EDS) document needs to be further refined and updated by engaging additional stakeholders, including residents, business owners, major employers, property owners, business associations, and industry groups.

There will also likely be a need to allocate additional staffing resources to implement the City’s economic development efforts. The City may choose to complete the EDS and gather feedback from stakeholders and business interests before determining how to staff an Economic Development Office. The final EDS would include a detailed implementation strategy on how to Council Special Meeting, 3/26/2025, Item No. 1., Item Page 5, Packet Page 7 №10/24
achieve the City’s economic development goals, whether that be with full-time staff, consultants, or a combination of the two.

The recommended Economic Development Roadmap is as follows:

March 2025:
 Introduce the Draft 2025 Economic Development Strategy to the City Council and gather initial feedback from the City Council at its March 26, 2025 Study Session.

Spring /Summer 2025:
 Conduct focus group and town hall meetings with business associations and industry partners to gather information and feedback for the final Economic Development Strategy.
 Engage with an economic development firm to refine specific financing strategies such as tax increment financing.

Fall 2025:
 Present final Economic Development Strategy to City Council for adoption, which would include a detailed implementation schedule, Key Performance Indicators (KPIs), and staffing model.

It is recommended that the City Council provide feedback on the recommended Economic Development Roadmap for implementation.

NR
Attachments: 1. Draft 2025 Economic Development Strategy Writings distributed for discussion or consideration on this matter within 72 hours prior to the meeting, pursuant to Government Code § 54957.5, will be made available at the following link:
https://monterey.gov/Submitted-Comments
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 6, Packet Page 8 ATTACHMENT 1
DRAFT 2025 Economic Development Strategy
City of Monterey, California
March 2025

Council Special Meeting, 3/26/2025, Item No. 1., Item Page 7, Packet Page 9 City of Monterey
DRAFT 2025 Economic Development Strategy

Table of Contents

1. Introduction.............................................................................................................................................3

1.1 Economic Context............................................................................................................................4

1.1.1 Employment......................................................................................................................6

1.1.2 City Revenue Sources .....................................................................................................8

1.1.2.1 Transient Occupancy Tax (Hotel Tax) ....................................................................8

1.1.2.2 Sales Tax...................................................................................................................11

1.1.2.3 Measure S Sales Tax ...............................................................................................14

1.1.2.4 Property Tax ................................................................................................................14

1.1.2.5 Business License Tax ................................................................................................15

1.1.3 Economic Development Financing Tools.........................................................................16

2. Guiding Vision and Economic Development Goals........................................................................19

3. SWOT Analysis......................................................................................................................................21

3.1 Strengths .........................................................................................................................................21

3.2 Weaknesses....................................................................................................................................22

3.3 Opportunities..................................................................................................................................23

3.4 Threats .............................................................................................................................................23

4. Stakeholder Engagement....................................................................................................................25

5. Economic Development Strategies ..................................................................................................27

6. Implementation Schedule..................................................................................................................35 Council Special Meeting, 3/26/2025, Item No. 1., Item Page 8, Packet Page 10 City of Monterey
DRAFT 2025 Economic Development Strategy

1. Introduction
At its goal-setting workshop on January 29, 2025, the Monterey City Council identified “Fiscal Stewardship: Economic Development” among one of the most important priority areas, tied for fifth place. Economic Development was also seen as a prime opportunity by the majority of councilmembers during a brainstorming exercise.
“Economic Development” may mean different things for our City Council. This draft “Economic Development Strategy” attempts to provide a preliminary framework. It is meant to be a starting point for many future conversations with residents, businesses and City Council.

The draft contains the following building blocks:
• A newly added and defined vision and goal for economic development in the City. • A review of selected economic and employment data, and a preliminary analysis of the City’s economic development Strengths, Weaknesses, Opportunities and Threats (SWOT).
• Opportunities for additional stakeholder engagement.
• Preliminary economic development strategies.
• An economic development implementation roadmap.

A Draft 2025 Economic Development Strategy (EDS) is a first step towards encapsulating feedback received from Councilmembers and the community. Additional engagement and feedback from the City Council, business community, industry leaders, and residents are planned. The heartbeat of Monterey’s economy is our hospitality industry. Tourism remains and will continue to be the top economic driver for our community’s wealth and quality of life.

The City’s partnerships with hospitality partners such as the Monterey County Hospitality Association (MCHA) and destination marketing organization See Monterey remain strong. Our City has supported economic development efforts in the hospitality industry such as supporting destination marketing, collaboration with businesses, and investments in the Monterey Conference Center and Monterey hotels.

Today we have an opportunity to implement a long-term economic development strategy that supports residents and tourists alike. This strategy should strive to ensure the high quality of life Monterey residents expect while providing a vibrant and thriving experience that will keep visitors coming back to our community for years to come.

In Monterey County competition in the hospitality industry has never been fiercer. There are a total of 2,039 hotel rooms planned or under construction in the cities of Marina, Pacific Grove, Sand City, Salinas, and Seaside. In Pacific Grove and Sand City, construction is underway on the 101-room Kimpton Hotel and the 215-room Courtyard by Marriott and Residence Inn by Marriott, respectively. With the planned Grand Hyatt in Seaside, American Tin Cannery Hotel in Pacific Grove, and the AC Hotels and Element Hotel by Westin in Marina and others, there are an additional 1,723 rooms in the pipeline. These communities have also made significant Council Special Meeting, 3/26/2025, Item No. 1., Item Page 9, Packet Page 11 City of Monterey
DRAFT 2025 Economic Development Strategy

improvements to sidewalks, streetlights, and other infrastructure to attract visitors and locals to shopping centers and business districts in their jurisdictions.

The City of Monterey cannot take its position as a regional leader in tourism and hospitality for granted. Residents understand that tourism plays an important role in the local economy.

According to See Monterey’s 2024 Resident Sentiment Survey, a significant majority of City of Monterey residents (72%) see tourism as important to Monterey County. Countywide, 66% of residents say that tourism has a positive impact, while 47% say it has a positive impact on their community, and only 37% say it has a positive impact on their families. Tourism contributes significantly to the City of Monterey’s operating budget. Some residents may not see the way tourism revenues support many amenities and services the City provides, such as public parks, Monterey Sports Center, and more. Surveyed residents who expressed a negative view of tourism perceive the main challenges to be its contribution to traffic congestion, a decrease in affordable housing, stress on infrastructure particularly during the summer, and the overall environmental impact. Significant long-term investments in infrastructure and replacing or rehabilitating City-owned assets and streetscape improvements in business districts such as Old Monterey, Lighthouse Avenue, Cannery Row and North Fremont are needed to maintain a positive experience for residents and visitors. Other survey respondents recognized that visitor dollars positively impact the community by supporting local businesses, leading to job creation, and supporting local amenities that residents enjoy. There are vast opportunities in Monterey to enhance the quality of life, visibility, sense of place, accessibility, and walkability of Old Monterey, Lighthouse Avenue, Old Fisherman’s Wharf, and other business areas in Monterey. One of the biggest challenges is coordination among business owners, property owners, business associations, and other partners, as well as identifying and implementing sustainable mechanisms to fund these improvements. An Economic Development Strategy will lay the groundwork for that very purpose.

This paper will be refined and updated by engaging additional stakeholders such as residents, business owners, major employers, property owners, business associations, and industry groups. There will also likely be a need to allocate additional staffing resources to implement the City’s economic development efforts. The City may choose to complete the Economic Development Strategy and gather feedback from stakeholders and business interests before determining how to staff an Economic Development Office. The final EDS would include a detailed implementation strategy on how to achieve the City’s economic development goals, whether that be with full-time staff, consultants, or a combination of the two.

1.1 Economic Context
The City of Monterey is a vibrant coastal community known for its rich history, natural beauty, and diverse economy. The City appeals to all types of businesses striving to have the name “Monterey” in their address or business names. While the City enjoys a strong tourism base, there is ongoing competition for tourism regionally and nationally. There are opportunities to remain competitive and address key challenges such as the high cost of living and limited affordable housing. Monterey has the know-how and the common sense understanding of how Council Special Meeting, 3/26/2025, Item No. 1., Item Page 10, Packet Page 12 City of Monterey
DRAFT 2025 Economic Development Strategy

to successfully collaborate with hospitality. Economic success and prosperity go hand in hand with good economic policies and investments.

Monterey relies on tourism and hospitality as key drivers of local revenue including Transient Occupancy Tax (TOT), sales tax, and parking revenues. TOT and sales tax revenues fund essential services like police services, fire and emergency services, parks and recreation, Monterey Public Library, Monterey Sports Center, trails, and other core services many residents rely on. Parking revenues reimburse the General Fund for services delivered for parking operations as well as fund the summer trolley services provided by Monterey-Salinas Transit.

The devasting economic impacts of the COVID-19 pandemic highlighted the need for fiscal stewardship, as tourism-related revenue losses led to significant budget cuts and layoffs and losses in the amount of $32M in18 months. In 2020, the California State Auditor listed Monterey among the top 11 cities in California most financially devastated by pandemicrelated revenue loss1 . According to the U.S. Census Bureau, hospitality and food service employs 4,813 jobs in the City of Monterey.

Other primary economic drivers include the military/federal, education, and healthcare sectors.
2 The U.S. Army Garrison Presidio of Monterey (POM), the Defense Language Institute Foreign Language Center (DLIFLC), Naval Support Activity Monterey (NSAM), the Naval Postgraduate School (NPS) and Fleet Numerical Meteorology and Oceanography Center (FNMOC), form a major economic sector within Monterey’s city limits3. Naval Support Activity Monterey, home to NPS and FNMOC employs 2,125 active-duty service members and 1,901 civilians. DLIFLC houses 2,568 active-duty instructors and students, and 2,180 civilians. The United States Coast Guard employs 40 service members.4
Educational institutions supporting the City’s economy include Monterey Peninsula College (which employs around 500 faculty and staff), the Middlebury Institute of International Studies at Monterey, Monterey Peninsula Unified School District (which employs around 1,115 faculty and staff), and California State University Monterey Bay’s Ryan Ranch Center, as well as DLIFLC and NPS which are also part of the military sector.5 The region’s healthcare industry is anchored in the City of Monterey. In addition to the Community Hospital of the Monterey Peninsula on Holman Highway, Montage Health has 1 https://www.prnewswire.com/news-releases/california-state-auditor-finds-anaheim-monterey-and-southlake-tahoe-among-cities-losing-significant-revenue-due-to-covid-19-301176342.html 2 U.S. Census Bureau Center for Economic Studies, Longitudinal Employer-Household Dynamics, OnTheMap webtool 2022 Estimate, https://onthemap.ces.census.gov/ 3 Matrix Design Group and Monterey Bay Defense Alliance, “Monterey County Military Economic Impact Report,” published November 12, 2024,
https://storymaps.arcgis.com/stories/6ac5f61d39dc4035a2dae674e3e20c34. 4 Matrix Design Group, March 2025.
5 National Center for Education Statistics, “Monterey Peninsula Unified District Directory Information (2023- 2024 School Year),” accessed March 17, 2025,
https://nces.ed.gov/ccd/districtsearch/district_detail.asp?Search=2&ID2=0625530 Council Special Meeting, 3/26/2025, Item No. 1., Item Page 11, Packet Page 13 City of Monterey
DRAFT 2025 Economic Development Strategy

expanded their presence in Ryan Ranch, including the Ohana Center for Child and Adolescent Behavioral Health and other facilities. Their presence on the Monterey Peninsula includes 475 medical staff and 2,609 employees, most of whom work in the City of Monterey. 6 This Draft EDS outlines strategies to bolster the City’s economic resilience, foster innovation, identify opportunities, and strengthen collaboration with business associations and partners, all while enhancing the City’s unique character and quality of life. A balanced, data-driven economic development strategy will focus on business retention and attraction to ensure longterm fiscal health and stability.

1.1.1 Employment
The City of Monterey is the major economic hub for employment in the region. Most notably, a significant part of the City’s employment comes from the federal government. In calendar year 2024, NSAM and DLIFLC employ approximately 8,814 full-time active duty and civilian workers.

They also employ 143,872 Temporary Duty Personnel Days, or roughly 394 full-time equivalents (Temporary Duty Personnel Days are equal to the number of Temporary Duty Personnels times the average length of stay).7
According to the most recent U.S. Census Bureau data (2022), there are 24,944 individuals employed in the City of Monterey in non-military industries. Most of these individuals, 21,865 workers, commute from outside the City, while 3,079 of them live and work within the City’s boundaries. Approximately 8,050 City residents commute to nearby areas for work (Figure 1).8 6 Montage Health, “About Fact Sheet,” accessed March 17, 2025, https://www.montagehealth.org/app/files/public/aefd5925-7c0f-4203-a662-e49149500a20/about/aboutfact-sheet.pdf. 7 Matrix Defense Center, March 2025.
8 U.S. Census Bureau Center for Economic Studies, Longitudinal Employer-Household Dynamics, OnTheMap Webtool 2022 Estimate, https://onthemap.ces.census.gov/ Council Special Meeting, 3/26/2025, Item No. 1., Item Page 12, Packet Page 14 City of Monterey
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Figure 1. City of Monterey inflow and outflow employment in 2022. Source: U.S. Census Bureau Center for Economic Studies, Longitudinal Employer-Household Dynamics, OnTheMap Webtool.

The City of Monterey non-military employment offerings span a variety of sectors, most notably in services relating to hospitality, healthcare, and social work. Of all employment sectors, healthcare and social assistance comprise the largest employment category in the City, at

26.6% of all employees. This category is followed by accommodation and food services (hospitality) at 20.4%. Other notable employment sectors in the City include professional, scientific, technical services, public administration, and management of companies and enterprises.9
Figure 2. Employment in Monterey City, California. Source: U.S. Census Bureau Center for Economic Studies, Longitudinal Employer-Household Dynamics, OnTheMap webtool 2022 Estimate.
9 U.S. Census Bureau Center for Economic Studies, Longitudinal Employer-Household Dynamics, OnTheMap Webtool 2022 Estimate, https://onthemap.ces.census.gov/ Council Special Meeting, 3/26/2025, Item No. 1., Item Page 13, Packet Page 15 City of Monterey
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1.1.2 City Revenue Sources
Monterey’s fiscal health is dependent on revenue from tourism. Approximately 30% of the City’s General Fund Revenue is from Transient Occupancy Tax (TOT), also known as hotel tax, and 15.4% of General Fund revenues are from sales tax in FY 2023-24 (Figure 3). 10 In the following section we will describe the City’s main revenue sources as depicted below:

Figure 3. City of Monterey Amended Budget for FY 2023-24, General Fund by Source (General Fund and Facility Maintenance Fund).

1.1.2.1 Transient Occupancy Tax (Hotel Tax)
The City of Monterey is heavily reliant on revenues hotels and motels, most notably from Transient Occupancy Tax (TOT). In 2021, Monterey’s TOT rate was adjusted to its current rate of 12%, consistent with nearby jurisdictions:
10 City of Monterey, General Funds, https://stories.opengov.com/cityofmontereyca/bfd0f2e9-dabc-4403- 92e1-33676d6ecc3e/published/hUk-2PrhP?currentPageId=66399ad22bab31350ce12afc.

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Figure 4. Transit Occupancy Taxes (TOT or hotel tax) by jurisdiction.

In Fiscal Year (FY) 2023-2024, the City received $35,264,893 from TOT, of which 16% is allocated per Monterey City Charter towards the Neighborhood & Community Improvement Program (NCIP), resulting in a remainder of $30,306,295 of the total TOT in the General Fund. 11 These revenues made up 30% of the City’s General Fund in FY 23-24, illustrating a strong reliance on hotel taxes for the City’s Operating Budget (Figure 3).

Figure 5. Transit Occupancy Tax (TOT or Hotel Tax) revenues in FY 2023-24 by area. 11 City of Monterey, ”City of Monterey Visitor Accommodation Facilities Revenue June 2024 Reporting Period,” https://files.monterey.gov/Document%20Center/Finance/OtherReports/TOT/TOT-Jun2024.pdf.

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Figure 6. Transit Occupancy Tax (TOT or Hotel Tax) revenues in FY 2023-24 by area.

The statement, “a rising tide lifts all boats” often applies to the economic health of the region. “A ship in harbor is safe, but that is not what ships are built for” states another fact, which is the need to continuously invest, expand, replace, and/or enhance existing service levels and attractions. Staying put or staying safe in the harbor is not an option.

The City currently has 4,713 hotel rooms with 40 new hotel rooms proposed with the Avid Hotel by IHG Project on North Fremont Street. New hotels in the county mean more opportunities for visitors to enjoy the region, but compression and competition are becoming factors across the region. While the City may benefit from visitors staying in newer hotels in Marina, Pacific Grove, and Sand City, it also means that those visitors are not contributing to critical TOT revenues in the City of Monterey. The competition from newer hotels and the increase in regional hotel room supply may affect demand in the City, particularly in the upscale and upper midscale hotel categories.

The graph below illustrates that the number of hotels rooms in Monterey have not grown significantly over time. Yet, neighboring cities are projecting a significant increase in their number of rooms projected in the future, including Seaside (+718 rooms), Salinas (+393 rooms), Sand City (+342 rooms), Marina (+200 rooms), and Pacific Grove (+225 rooms), while the City of Monterey is projecting an increase of only 40 rooms. The City’s voter initiative does not allow for new hotels, however, there is an opportunity for older hotels to be renovated or modernized. Additionally, new hotel inventory in the greater tri-county area has added new never before experienced pressures on our local hospitality industry. Many visitors attending events such as the AT&T Pebble Beach Pro-Am and Car Week stay in Santa Cruz, Watsonville, Gilroy, and Morgan Hill, which are less than one hour from the peninsula and offer more affordable rates and more modern accommodations. Santa Cruz has a new luxury beachfront hotel and spa opening in 2025 and also features meeting space for nearly 1,000 attendees. In Council Special Meeting, 3/26/2025, Item No. 1., Item Page 16, Packet Page 18 City of Monterey
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San Luis Obispo County, the cities of San Luis Obispo and Pismo Beach are considering building their own conference centers that would compete with the Monterey Conference Center. These are the new realities and challenges which the City can turn into opportunities to rebuild, rehabilitate, and reinvent. A strong economic development strategy is one important ingredient for success.

Figure 7. Hotel rooms in the Monterey County Tourism Improvement District (MCTID) by jurisdiction over time. Data source: See Monterey.

1.1.2.2 Sales Tax
The second highest source of revenue in the City’s General Fund is Sales Tax. 12 Combined, TOT
and sales tax account for 45.5% of the City’s General Fund revenues (Figure 3). Interestingly, 62% of sales tax is paid by non-residents, which emphasizes the City’s reliance on funding from non-residents to pay for City services.

Restaurants and hotels are the primary contributors to the City’s sales tax revenues. Sales tax generated from hotels includes taxes on hotel restaurants and catering. This category is followed by general consumer goods, county and state pools (sales tax generated from online sales or sales that are distributed to the County and then dispersed to cities), and business and industry.
12 City of Monterey, General Funds, https://stories.opengov.com/cityofmontereyca/bfd0f2e9-dabc-4403- 92e1-33676d6ecc3e/published/hUk-2PrhP?currentPageId=66399ad22bab31350ce12afc.

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Figure 8. FY 2023-24 Sales tax revenues by industry groups.

Figure 9. FY 2023-24 Sales tax revenues by industry groups.

Geographic Area Number of
businesses
Revenues (FY 2023-2024) % of Total Sales Tax
Revenues
Del Monte Center 80 $1,487,282.00 18.50%
Cannery Row 200 $1,443,662.00 18.00%
Fisherman’s
Wharf
34 $392,879.00 4.90%
New Monterey 147 $634,508.00 7.90%
North Fremont 53 $478,149.00 5.90%
Old Town/
Downtown
403 $1,713,838.00 21.30%
Other 920 $1,889,442.00 23.50%
Totals for all
outlets
1,880 $8,039,760.00 100.00%
Table 1. City of Monterey Sales Tax Revenues by Geographic Area. FY 2023-2024.

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Figure 10. Sales tax revenues by location as a percentage of total sales tax revenues.

Source: City of Monterey, Finance Department.

Figure 11. City of Monterey Sales Tax Revenues by Geographic Area. FY 2023-2024.

Source: City of Monterey, Finance Department.

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1.1.2.3 Measure S Sales Tax
For FY 2023-24, the City of Monterey received $11,849,946 in Measure S local district tax revenue.

Measure S is a continuation of Measure P, a one percent (one cent per dollar) local district tax (sales and use tax). Measure P was approved by 74% of voters in 2014 and Measure S was approved by 82% of voters in 2018. The scope of Measures S includes street, sidewalk, and storm drain repairs, as well as improving access and safety for senior citizens, disabled residents, and others. Measure S is currently scheduled to sunset on March 31, 2027 unless extended by voters. Without Measure S funds, the City’s General Fund would be required to cover these expenses, resulting in less funding for other services such as police, fire, recreation, library, and other City services.

Unlike many cities in California, in the City of Monterey, majority of sales tax is paid by nonresidents. This is also true for Measure S tax, of which 62% is paid by non-residents either living in adjacent communities or visiting the City.

1.1.2.4 Property Tax
The City of Monterey receives six cents of every dollar collected in property tax. A commercial or residential property owner paying property taxes in the City receives more services than the amount they pay in property taxes. Considering the current median price of a home in Monterey at $1.3M and a tax rate of roughly 1.11%, the City receives $865.80 in property tax from a typical homeowner.

Monterey collects annually approximately $15.7M in property taxes.

Typically, property tax revenue is the largest source of General Fund revenue for cities in California. For the City of Monterey, property tax ranks as the fourth largest source of revenue, behind TOT and sales tax, further highlighting the City’s dependence on tourism and the importance of investing in economic development.

It should be noted that many properties in the City are exempt from paying property taxes. This includes all non-profit organizations, military installations, educational and religious institutions, governmental agencies, and non-profit medical facilities. These tax-exempt properties are still valuable parts of our community that drive economic growth.

As stated above, in California, including Monterey County, an average of six (6) cents of every dollar of property tax revenues are remitted to cities. The graphic below from the County of Monterey’s Treasurer-Tax Collector shows that on average, schools receive 61 cents of every dollar of property tax revenue, followed by the County of Monterey at 15 cents per dollar, and special districts with nine (9) cents per dollar.

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Figure 12. Source: County of Monterey.

1.1.2.5 Business License Tax
The City of Monterey is home to a strong presence of small enterprises that contribute to its unique local economy and vibrant community. In FY 2024-25, 2,682 businesses were registered with the City of Monterey. The City’s business license tax revenue makes up 3.8% of the general fund revenues, totaling $3,870,000 in FY 2023-24 (see Figure 3).

The retail sector comprises the largest number of independent businesses in the City.

Furthermore, many of the City’s registered businesses are small, professional service providers in consulting, photography, and event planning. Healthcare services, lifestyle and personal care services, and engineering and construction also represent a significant part of the workforce in the City of Monterey.

Figure 13. Number of businesses registered with the City of Monterey 2024-2025.

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1.1.3 Economic Development Financing Tools
Newer mechanisms exist in California that can help facilitate the financing of infrastructure, economic development, and housing efforts:
• Capturing value by charging for higher density zoning to pay for public infrastructure and amenities.

Historically, cities have used Redevelopment Agencies to capture values from zoning right changes (“upzoning” to allow for more density). Recently, many cities have traded in approving additional density in exchange for public infrastructure such as parks, streetlights, and other amenities. The City of Monterey, as part of the State-approved Housing Element, has already “upzoned” areas to increase density in certain areas but has an opportunity to explore additional zoning density and development agreements to create taxable value.
• Utilize tax increment financing to fund infrastructure investments.

Post-redevelopment, some new tax increment financing tools have emerged in California. Enhanced Infrastructure Financing Districts (EIFDs) are one of those tools, which utilize property tax increment revenues generated within a specific geographic area. Community Revitalization and Investment Authorities (CRIAs), which have a greater emphasis on affordable housing with low- and moderate-income set-aside requirements, are also becoming more common in California. Climate Resilience District (CRDs) are tools that help fund sustainable infrastructure, green spaces, and renewable energy solutions to mitigate climate risks such as flooding, heat waves, and sea level rise. EIFDs, CRIAs, and CRDs are potential tools that could help fund economic development efforts in key geographic areas, including Alvarado Street, Calle Principal, North Fremont Street, and Lighthouse Avenue. • Federally funded programs.

Although limited and often restrictive, there may be state and federal funding available for infrastructure needs. The Inflation Reduction Act (IRA) offers tax credits and rebates for individuals and tax-exempt financing for projects to support private sector investment. The bipartisan Infrastructure Investment and Jobs Act provides funding for transportation infrastructure (roads, bridges, public transportation, climate resiliency, brownfields cleanup, and electric vehicle infrastructure). It is noteworthy that federal funding is currently volatile and uncertain, as several federal grants have been nixed. • State funded programs.

State funding is available utilizing $10B generated through Proposition 4 (Parks, Environment, Energy, and Water Bond of 2024) and other State funds. The Infill Infrastructure Grants and Catalyst Program offers $1 million to $30 million awards for Council Special Meeting, 3/26/2025, Item No. 1., Item Page 22, Packet Page 24 City of Monterey
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affordable housing, housing infrastructure, and transportation. The Affordable Housing and Sustainable Communities (AHSC) Program offers $1 million to $7.5 million grants for infill projects, and gap funding for infrastructure for affordable residential and mixed-use projects. The Multifamily Housing Program (MHP). These state funding opportunities should be further explored.

Other, more traditional methods of financing economic development infrastructure include:
• Local sales tax measures
The City of Monterey already has two sales tax measures in place: Measure G, which is a ½-cent per dollar sales tax measure approved by voters in March 2020. Measure G funds general services such as police, fire, 9-1-1 emergency response; traffic management; library; senior/youth recreation programs; beach, park, forestry, and trail maintenance; housing programs, and other unrestricted general fund expenditures.

Measure G expires in 2029. There are no General Fund dollars available from Measure G or other sources to fund economic development efforts without compromising existing City services. Measure S, which is described earlier, is to fix streets, sidewalks, and storm drains and install ADA ramps and signals at intersections. Measure S is scheduled to sunset on March 31, 2027, unless extended. • Capital Improvement Programs
Many cities utilize their Capital Improvement Programs (CIPs) to plan for and fund infrastructure improvements in business districts. However, the City of Monterey allocates less funding for its Capital Improvement Program (CIP) as a percentage of the General Fund budget than every other city in the region. The City of Monterey invests just over 2% of general funds to CIP while other cities range from 13% to 25%. The dollars the City invests in its CIP have historically focused on aging infrastructure and facilities, which already have a major funding gap. It is estimated that $96 million in funding is needed within the one-to-five-year time frame and $191 million through years six to 20. The total amount estimated to repair existing infrastructure within the next twenty years is $287 million. These are for existing infrastructure needs and do not include additional improvements or amenities in business districts. • General Obligation Bond Measures
Some cities utilize bond measures, which require 2/3rds approval from voters, to fund projects or initiatives that may include economic development infrastructure. • Business Improvement Districts
In commercial areas, Business Improvement Districts (BIDs) often fund the building and maintenance of streetscape improvements and economic development efforts.

North Fremont, for example, has an existing Business Improvement District. Alvarado Street and Calle Principal each have their own Maintenance Districts. The rate of the BIDs is determined by property owners in a designated geographical area and is an Council Special Meeting, 3/26/2025, Item No. 1., Item Page 23, Packet Page 25 City of Monterey
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additional assessment on property tax.
• Tourism Improvement Districts
Since 2006, the City of Monterey has been part of the Monterey County Tourism Improvement District (MCTID) which is an assessment on lodging properties that are passed on to guests who stay in hotels. The MCTID funds tourism promotion, marketing, group business development, and other destination marketing led by See Monterey. MCTID generates over $8.8 million annually. In some Tourism Improvement Districts, such as Napa Valley Tourism Improvement District, 25% of their TID budget is retained by individual cities and the County of Napa for destination-specific tourism improvement activities such as streetscape enhancements, special event programming and promotion, local tourism shuttle programs, trails, signage, and other infrastructure that enhances the visitor experience.

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2. Guiding Vision and Economic Development Goals
Existing Economic Development Goals - The City of Monterey’s General Plan identifies the following economic development goals, which were established in 2003:

Goal a. Maintain and encourage a strong economic base which will provide tax income for City services, jobs for Monterey residents, and services for residents and visitors.

Encourage civic and business decisions which provide taxes to support City services to residents and which provide employment opportunities to residents.

Goal b. Expand the economy of Monterey by building on existing strengths and emphasizing the natural and historic features of the City.

Goal c. Continue Monterey’s role as the business and employment center of the Monterey Peninsula.

Goal d. Encourage housing, including mixed use housing to meet the needs of business (see Housing Element).

Goal e. Continue to provide exceptional public safety to assure that visitors and residents are not discouraged from visiting or shopping in Monterey.

The City Council should consider these goals as the Economic Development Strategy is updated and refined to keep up with national, state, and regional trends.

Proposed Economic Development Vision: Monterey will maintain its outstanding quality of life for residents by strengthening the community’s economic and fiscal vitality embracing its historic charm, protecting the coastal environment, supporting affordable housing for the community’s workforce, and fostering sustainable tourism through innovation and partnerships.

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Proposed Economic Development Goals:

1. Remaining Competitive in the Hospitality Marketplace through Quality of Place:

Foster the modernization and increased appeal of outdated amenities and assets, including hotels, retail areas, and business districts.

2. Sustainable Redevelopment: Prioritize redevelopment and adaptive reuse of underutilized properties to meet
modern economic needs and identify solutions to
support those efforts.

3. Business Retention, Attraction, and Promotion
through Collaborative Partnerships:

Strengthen coordination with business
associations, commercial real estate brokers,
business districts, industry associations, and
destination marketing organizations.

4. Economic Diversification: Continue to focus
on and retain the region’s existing economic
strengths in the fields of hospitality, military,
education, and healthcare, while exploring new growth
industries, particularly regarding high-wage jobs that support these sectors.

5. Affordable Workforce Housing Solutions: Develop strategies to address the current lack of workforce housing affordability that hinders the attraction and retention of talent in all industries.

As the City’s budget allows, adequate staffing and resources will need to support short-andlong-term economic development needs, to support these goals.

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3. SWOT Analysis
In the following SWOT Analysis, Strengths and Weaknesses are positive and negative internal factors and Opportunities and Threats are positive and negative external factors often beyond the City of Monterey’s control. Typically, Economic Development Strategies focus on promoting strengths, addressing weaknesses, preparing for opportunities, and mitigating threats. The following analysis was completed by staff and would be modified following feedback from community stakeholders. The list below is in no particular order.

3.1 Strengths
• Monterey is a premier tourism destination with global recognition. • High quality of life including access to Monterey Bay, Pacific Ocean, coastal trails, parks, and high-quality amenities
• Strong sense of history, as the capital of Alta California under Spanish and Mexican flags and heritage sites such as Cannery Row, Old Monterey, Monterey State Historic Park, Colton Hall, Pacific Biological Laboratories, and Presidio of Monterey • Community support to maintain Monterey’s small city character • Mayor and Councilmember support and active participation with business associations • Coastal community with Cannery Row, the Monterey Bay Aquarium, Fisherman’s Wharf, Monterey Harbor, beaches, trails, and direct access to the Monterey Bay National Marine Sanctuary
• Diversity of visitor and business lodging types including luxury hotels, mid-range and affordable hotels, inns, and motor lodges, as well as Veterans Park Campground • Monterey Conference Center and business-serving facilities • Diverse military presence and partnerships with institutions such as Naval Postgraduate School, Naval Support Activity Monterey, Defense Language Institute, Presidio of Monterey, and Coast Guard Station Monterey
• Educational institutions including the Middlebury Institute of International Studies at Monterey, Monterey Peninsula College, and nearby California State University Monterey Bay
• Summer trolley service between Downtown, Old Fisherman’s Wharf, and Cannery Row • Access to and from national and global cities from the nearby Monterey Regional Airport, with service through San Francisco, Los Angeles, Phoenix, Denver, San Diego, Seattle, Las Vegas, and Dallas/Fort Worth.
• Plentiful parking in the Downtown West and East Garages • Walkability of Old Monterey, Lighthouse Avenue, and Cannery Row • Responsiveness of public safety including the Police and Fire departments • Emergency management and preparedness
• Multiple business districts and areas including Fisherman’s Wharf, Old Monterey, Lighthouse Avenue, Cannery Row, North Fremont, Munras Avenue, and Del Monte Center
• Ryan Ranch Business Park
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• Major events such as the Monterey Jazz Festival and Car Week, and large events in the area hosted at Laguna Seca Raceway and Pebble Beach
• Proximity to major educational and research institutions. • Positive working relationships with the Monterey Bay Aquarium, See Monterey, Monterey Peninsula Chamber of Commerce, North Fremont Business Association, Old Monterey Business Association, Fisherman’s Wharf Association, Cannery Row Business Association, Lighthouse Avenue/New Monterey Business Association, and Monterey County Hospitality Association
• History of financial investments and regional leadership in destination marketing through See Monterey
• Ongoing support, funding, and operation of the Monterey Conference Center • Partnerships with community organizations and agencies such as the Monterey County Fairgrounds, Monterey Museum of Art, California State Parks, Monterey Bay National Marine Sanctuary, Old Monterey Foundation and Monterey History and Art Association. • Depth of knowledge and history of collaboration in the City’s Planning Office.

3.2 Weaknesses
• High cost of living and availability of affordable workforce housing • Limited funding for infrastructure improvements to support facade improvements and business district amenities, Fisherman’s Wharf updates and Municipal Wharf No. 2 repairs
• Lack of any property tax revenue or Payment in Lieu of Taxes (PILOTs) from major institutions such as the Monterey Bay Aquarium, Middlebury Institute of International Studies, Monterey Peninsula College, Monterey County Fairgrounds, Naval Postgraduate School, and Montage Health facilities, to cover City services and infrastructure provided to these institutions
• Aging hotel stock and amenities such as shopping centers, retailers, and restaurants • Aging infrastructure, including sidewalks, landscaping, signage, streetlights, and street banners in business districts and corridors such as Lighthouse Avenue, Old Monterey (including Alvarado Street and Calle Principal), North Fremont Street, Tenth Street, Del Monte Avenue, Wave Street, Foam Street, Munras Avenue, and Fremont Street. • Merchandising and business storefronts, and retail types that may not attract browsing or discovery shopping
• Businesses that may not maintain their facades, including temporary or faded signs, unattractive window displays, and unappealing sidewalk merchandising • Physical appearance of some business storefronts
• Overreliance on tourism and hospitality sectors
• Limited availability of land for new development
• Limited promotional and marketing efforts in some business districts and areas • Commercial real estate challenges, with retail vacancies on Alvarado Street, Lighthouse Avenue, and other areas, and office space vacancies in Ryan Ranch, Downtown, and Garden Road
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• Significant out-commute and low daytime population base • Retail leakage across various categories
• Limited financial resources for a robust economic development office and staffing

3.3 Opportunities
• Funding of infrastructure improvements such as new streetlights and amenities, as well as other improvements utilizing Enhanced Infrastructure Financing Districts (EIFD) • Increased visibility of business districts and facade improvements, storefront improvements through collaborative opportunities with business associations • Evaluate parking policies on Lighthouse Avenue and Old Monterey to encourage and foster parking space turnover for business customers
• Utilization of facade improvement grants to support local business • Stronger placemaking in business districts, such as design themes, street banners, and other amenities
• Evaluate parking requirements in focus areas to support upzoning where alternative parking options may be available
• Affordable housing and mixed-use opportunities where available, including on Cityowned land, non-profit, and government-owned land. • Coordination with major institutions for Payments in Lieu of Taxes (PILOTs) to support services and infrastructure near their assets
• Identify opportunities to leverage the popularity of the Old Monterey Farmers’ Market and Marketplace
• Incorporate public art and the Path of History expansion and heritage tourism into placemaking and tourism promotion
• Evaluation of Alvarado Street streetscape, street closures, and special event utilization • Partnerships and strategy on the use of Custom House Plaza • Identify long-term plan and funding gaps for Municipal Wharf No. 2 and economic realities of the commercial fishing industry in Monterey • Potential to attract high-wage industries such as marine sciences, agricultural technology, and defense
• Redevelopment and adaptive reuse of underutilized properties through upzoning and other methods
• Continued collaboration with business associations and regional partners such as the Monterey Peninsula Chamber of Commerce and Central Coast Small Business Development Center

3.4 Threats
• Competition from neighboring cities for newer lodging stock, especially in the upscale and upper midscale categories, as well as other regional shopping centers • Restaurant competition from neighboring communities, which have dedicated and localized tax revenue streams for promotion
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• Continued and future sales tax leakage from fuel/service stations, new and used car sales, and retail
• Ongoing purchase of private land by nonprofit organizations, which reduces property tax revenue to the City
• Competition from other destinations on the Central Coast who are considering establishing conference center facilities
• Economic uncertainty and its impacts on the local tourism industry, including leisure travel, overnight stays, restaurants, and business travel • Impact of Internet and big box stores on retail sales • Rising costs of infrastructure and public services
• Sea level rise, coastal erosion, and storm surge impacts on coastal areas including Municipal Wharf 2, Old Fisherman’s Wharf, and Cannery Row, as well as residential areas
• Regulatory environment (e.g., California Coastal Commission, which limits outdoor seating)
• High cost of doing business on the Monterey Peninsula due to housing and costs for services
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4. Stakeholder Engagement
The following is a partial list of stakeholders who would be engaged with as the City’s Economic Development Strategy is refined:

Commercial and Business Stakeholders
• Monterey County Hospitality Association
• See Monterey (Monterey County Convention & Visitors Bureau) • Monterey Peninsula Chamber of Commerce
• Fishermans’ Wharf Association
• Old Monterey Business Association
• New Monterey Business Association
• Cannery Row Business Association
• North Fremont Business Association
• Monterey County Association of Realtors
• Cannery Row Company
• Federal Realty Investment Trust / Del Monte Center
Neighborhood Associations with Business Districts nearby:
• Del Monte Grove/Laguna Grande Neighborhood Association • Casanova Oak Knoll Neighborhood Association
• Villa Del Monte Neighborhood Association
• Del Monte Beach Neighborhood Association
• Oak Grove Neighborhood Association
• Downtown Neighborhood Association
• Monterey Vista Neighborhood Association
• Old Town Neighborhood Association
• New Monterey Neighborhood Association
Community and Industry Partners
• Monterey Bay Defense Alliance
• U.S. Army Garrison Presidio of Monterey
• Defense Language Institute
• Naval Support Activity Monterey
• Naval Postgraduate School
• U.S. Coast Guard Station Monterey
• National Oceanic and Atmospheric Administration
• Middlebury Institute of International Studies at Monterey • Monterey Peninsula College
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• Monterey County Fairgrounds
• Monterey Bay Aquarium
• California State Parks
• California State University Monterey Bay
• Montage Health
• Monterey Bay Fisheries Trust
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5. Economic Development Strategies
Goal 1: Remaining Competitive in the Hospitality Marketplace through Quality of Place:

Foster the modernization and appeal of aging amenities and assets, including hotels, retail areas, and business districts, including North Fremont, Munras Avenue, Old Monterey, Lighthouse Avenue, Cannery Row, Fisherman’s’ Wharf, and Tenth Street.

Strategy / Tactic Complexity Responsibility Support
Incentivize Hotel and Lodging
Modernization
Tax incentives such as TOT-based loans for
hotels undergoing major renovations Medium City and Hotels ----- Develop and promote updated design
guidelines to support modern aesthetics Medium City and Hotels ----- Enhance Retail and Business Districts Complexity Responsibility Support Update facade improvements and
storefront maintenance including signage,
window displays, and merchandising
Low
Businesses,
Property
Owners
Business
Assoc.

Offer facade improvement grants as
funding allows Low City
Business
Assoc.

Identify and implement stable funding
streams for placemaking, infrastructure
revitalization and maintenance, including
Business Improvement Districts (BIDs),
Enhanced Infrastructure Finance Districts
(EIFDs), or other tools
High Property
Owners
City,
Business
Assoc.

Enhance cleanliness of downtown
sidewalks and facilities, and other
business districts
Low
City and
Property
Owners
Business
Assoc.

Analyze and implement parking policies
(including 2012 Parking Study) and
technology that support customer turnover
and access to businesses
Medium City, Business
Owners
Property
Owners,
Business
Assoc.

Improve public transit, bike lanes and
racks, electric vehicle infrastructure, and
walkability
Medium City and MST Business
Owners
Fund and implement placemaking and
investments in pedestrian-friendly
High City Property
Owners,
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 33, Packet Page 35 City of Monterey
DRAFT 2025 Economic Development Strategy

infrastructure such as wayfinding and
upgraded lighting, incorporating historical
markers (e.g., Path of History) and public
art, including other recommendations in
Specific Plans
Business
Owners
Leverage Branding, Marketing, and Special
Events
Complexity Responsibility Support
Collaborate and coordinate between
business associations and See Monterey
for destination storytelling and promotion
of business districts highlighting what each
business district has to offer
Low
Business
Owners,
Business
Assoc., See
Monterey
City,
Chamber
of
Commerce
Coordinate public art, pop-up markets,
community, and sidewalk events
Low
Business
Assoc.,
Business
Owners
City
Develop a special event and signature
event strategy, identifying which special
events support street closures in business
districts
Low
Business
Assoc.,
Business
Owners
City
Explore additional funding mechanisms for
the promotion of restaurants in Monterey,
such as the Carmel Restaurant
Improvement District (CRID)
High Business
Owners City
Review Citywide wayfinding plan and
collaborate with Caltrans to maximize
signage and wayfinding to key business
districts and destinations in Monterey
Low City and
Caltrans
Business
Assoc.

Gather feedback on fostering a pedestrianfriendly Alvarado Street and options for street closures
High
City, Business
Assoc.,
Business
Owners
Property
Owners
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 34, Packet Page 36 City of Monterey
DRAFT 2025 Economic Development Strategy

Goal 2: Sustainable Redevelopment: Prioritize redevelopment and adaptive reuse of underutilized properties to meet modern economic needs and identify funding solutions.

Strategy / Tactic Complexity Responsibility Support
Prioritize Underutilized Properties for
Redevelopment
Review vacant or underutilized
properties identified in Specific Plans
and other documents to identify
potential redevelopment sites
High
City and
Property
Owners
Business
Assoc. and
Business
Owners
Designate specific districts (e.g., North
Fremont Street, Downtown) for targeted
efforts
Medium
City and
Property
Owners
Business
Assoc. and
Business
Owners
Incentivize Redevelopment and Reuse Complexity Responsibility Support Identify and implement funding tools for
redevelopment, including EIFDs,
Community Revitalization and
Investment Authorities (CRIAs), Tax
Increment Financing (TIF) and other
mechanisms
High
City and
Property
Owners
Business
Assoc. and
Business
Owners
Continue to streamline permitting and
entitlement processes for adaptive
reuse projects, including modern offices
and R&D space
Medium City
Property
Owners
Support Mixed-Use and Innovation Complexity Responsibility Support Continue to support policies that
convert office buildings into workforce or
affordable housing such as on Garden
Road
Medium
City and
Property
Owners
-----
Activate temporary uses of vacant
space, such as pop-up shops, art
installations, and event spaces
Low
Property
Owners and
Business
Owners
City
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 35, Packet Page 37 City of Monterey
DRAFT 2025 Economic Development Strategy

Goal 3: Business Retention, Attraction, and Promotion Through Collaborative Partnerships: Strengthen coordination with business associations, commercial real estate brokers, business districts, industry associations, and destination marketing organizations.

Strategy / Tactic Complexity Responsibility Support
Establish a Business Retention and
Attraction Program
Develop a business visitation program
that meets with local businesses
individually
Low
City and
Business
Assoc.

Business
Owners
Conduct business retention and
attraction surveys and track business
concerns
Low
City and
Business
Assoc.

Business
Owners
Provide technical assistance and
workshops on business operations,
finance, and marketing through the
Central Coast SBDC
Low
SBDC,
Chamber of
Commerce,
Business
Assoc.

City and
Business
Owners
Continue to track sales tax and business
license data
Low City Business
Assoc.

Attend trade shows to promote Monterey
as a business and retail destination Medium
City and
Commercial
Brokers
Business
Assoc. and
Business
Owners
Track and map business vacancies and
proactively work with commercial
brokers and property owners
Medium
City and
Commercial
Brokers
Business
Assoc. and
Business
Owners
Strengthen Collaborative Partnerships
and Business Promotion
Complexity Responsibility Support
Continue to partner and collaborate
regularly with the Monterey Peninsula
Chamber of Commerce, Small Business
Development Center (SBDC)
Low
City, Chamber
of Commerce,
and SBDC
Business
Owners,
Business
Assoc.

Continue to regularly participate in and
support Business Association meetings
and events and coordinate efforts
identified in the Economic Development
Low
City and
Business
Associations
Business
Owners
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 36, Packet Page 38 City of Monterey
DRAFT 2025 Economic Development Strategy

Strategy, including joint marketing
campaigns
Continue to regularly participate in and
support industry groups such as the
Monterey County Hospitality Association,
Monterey Bay Defense Alliance, and
engagement with healthcare, education,
and military sectors
Low City Industry Groups
Host business forums and industryspecific conferences and networking events targeted to technology,
healthcare, and defense industries
Medium MCBC City
Continue to support funding See
Monterey, the region’s Destination
Marketing Organization (DMO), and
ensure that Monterey’s assets and
business districts continue to be
promoted through the DMO
Low City and See
Monterey
Business
Assoc.

Continue to engage with Federal Realty /
Del Monte Center and Cannery Row
Company
Low
City, Federal
Realty, and
Cannery Row
Company
Business
Assoc.

Launch a “Shop Monterey” campaign
focused on benefits of shopping in the
community and what Monterey has to
offer
Medium
City, Business
Assoc., See
Monterey
Business
Owners
Support Workforce Development and
Talent Attraction Complexity Responsibility Support
Align industry workforce needs with
educational institutions such as MPC,
MIIS, CSUMB, and MPUSD to create
internship opportunities,
apprenticeships, and work-study
pipelines for hospitality, government,
healthcare, language learning, and
marine science industries
Medium
SBDC and
Chamber of
Commerce
Business
Owners, City
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 37, Packet Page 39 City of Monterey
DRAFT 2025 Economic Development Strategy

Continue Investment in the Monterey
Conference Center
Complexity Responsibility Support
Continue partnership with See Monterey
on sales and marketing efforts for the
Monterey Conference Center
Low City and See
Monterey Hotels
Continue to fund the repair and
replacement of equipment and amenities
in the Conference Center to ensure its
competitiveness
Low City and See
Monterey -----
Continue to coordinate event bookings
and sales of the meeting space with
nearby hotels
Low
City, Hotels,
and See
Monterey
-----
Activate temporary uses of vacant space,
such as pop-up shops, art installations,
and event spaces
Low
Property
Owners and
Business
Owners
City
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 38, Packet Page 40 City of Monterey
DRAFT 2025 Economic Development Strategy

Goal 4: Economic Diversification: Continue to focus on and retain the region’s existing economic strengths in the fields of hospitality, military, education, and healthcare, while exploring new growth industries, particularly with regard to high-wage jobs that support these sectors.

Strategy / Tactic Complexity Responsibility Support
Attract Technology and Innovation
Companies
Establish and promote Ryan Ranch or
other areas as an innovation district
focused on areas such as defense
technology, marine sciences,
cybersecurity, agtech and AI
High
City and
Property
Owners
Chamber of
Commerce,
Monterey Bay
Economic
Partnership
Support incubator space for emerging
industries Medium
City and
Property
Owners
Chamber of
Commerce
Continue to support partnerships between
military and defense sectors that allow for
dual-use technology in defense,
cybersecurity, and innovation, and efforts
such as the Naval Innovation Center (NIC)
Medium
City and
Military
Partners
Monterey Bay
Defense
Alliance
Promote Monterey for veteran
entrepreneurs
Low
City and
Veterans
Service Orgs.

Chamber of
Commerce
Expand the Blue Economy and innovation
in marine sciences, aquaculture, and
marine research through partnerships with
MBARI and the Monterey Bay Aquarium
High
City and
Marine
Science
Partners
Chamber of
Commerce
Work with Montage Health and local
healthcare institutions to attract medical
research and biotech companies
Medium
City and
Healthcare
Partners
Chamber of
Commerce
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 39, Packet Page 41 City of Monterey
DRAFT 2025 Economic Development Strategy

Goal 5: Affordable Workforce Housing Solutions: Develop strategies to address the current lack of workforce housing affordability that hinders the attraction and retention of talent in all industries. While the City’s Housing Element focuses on a variety of affordable housing strategies, the strategies below focus on workforce housing.

Strategy / Tactic Complexity Responsibility Support
Continue Implementation of the City’s
Affordable Housing Priorities
Continue to implement the City’s Housing
Element and efforts to support affordable
housing in Monterey
High
City and
Property
Owners
Chamber of
Commerce
Foster Employer-Led Housing Initiatives Complexity Responsibility Support Encourage employers (healthcare,
education, and hospitality) to consider
employer-led housing initiatives such as
master leasing, employer-funded housing
stipends, or housing cooperatives.

High
City and
Industry
Partners
Chamber of
Commerce
Work with Monterey Peninsula College and
Middlebury Institute to identify options for
on-campus housing to support students
High MPC and City
Continue to streamline permitting and
entitlement processes for adaptive reuse
projects, including modern offices and R&D
space
Medium City Property
Owners
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 40, Packet Page 42 City of Monterey
DRAFT 2025 Economic Development Strategy

6. Implementation Schedule
March 2025:
• Introduce the Draft 2025 Economic Development Strategy to the City Council and gather initial feedback from the City Council at its March 26, 2025 Study Session Spring /Summer 2025:
• Conduct focus group and town hall meetings with business associations and industry partners to gather information and feedback for the final Economic Development Strategy
• Engage with an economic development firm to refine specific financing strategies such as tax increment financing
Fall 2025:
• Present final Economic Development Strategy to City Council for adoption, which would include a detailed implementation schedule, Key Performance Indicators (KPIs), and staffing model
Council Special Meeting, 3/26/2025, Item No. 1., Item Page 41, Packet Page 43