CITY COUNCIL STAFF REPORT
DATE: November 12, 2025 BUSINESS & LEGISLATIVE
SUBJECT: ECONOMIC DEVELOPMENT STRATEGIC FRAMEWORK
FROM: Scott C. Stiles, City Manager
BY: Wayne Olson, Chief Economic Development Officer
SUMMARY:
The Palm Springs Economic Development Strategic Framework (EDSF) is a comprehensive plan designed to guide the City’s economic growth and diversification over the next decade or so (Attachment A). The EDSF outlines a long-term vision that blends Palm Springs’ legacy as a world-class tourism destination with new opportunities in technology, sustainability, and the creative economy. It was developed through extensive data analysis and community engagement to address current challenges (e.g. reliance on tourism, rising costs) and to capitalize on emerging opportunities (e.g. medical growth, renewable energy, tech sector growth). Staff recommends the City Council approve the EDSF and direct staff to initiate implementation.
RECOMMENDATION:
Approve the Palm Springs Economic Development Strategic Framework and adopt its strategic priorities as a guiding policy document.
BACKGROUND:
Palm Springs is a world-class branded City, renowned for tourism and hospitality.
However, our tourism-driven prosperity underscores the City’s strengths but also highlights a key challenge: a tax base heavily reliant on tourism and visitor spending. City leadership recognized that such reliance, coupled with rising business costs and housing prices, increasing regional competition, and seasonal workforce fluctuations, could pose long-term risk to the local Palm Springs economy. In response, the City Council in 2024 opened the Office of Economic Development and directed staff to develop a strategic economic plan to support the current economic contributors while diversifying the local economy and sustaining growth.
Following a competitive procurement process, the City issued RFP 09-24 for economic development consulting services on May 20, 2024. Five proposals were received by June
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25, 2024, and an evaluation committee of City staff shortlisted two firms for interviews.
The top-ranked firm, CVL Economics LLC, was awarded the contract in July 2024 to facilitate the creation of the Economic Development Strategic Plan (renamed here as EDSF).
Work began in late 2024 on the two-part project: (1) the Economic Development Strategic Framework for the City, and (2) an economic impact analysis for Palm Springs International Airport. The purpose of the EDSF was defined as providing a “roadmap” of strategies, incentives, and interventions to maintain and enhance economic growth in Palm Springs over the near-term (1–2 years), mid-term (3–5 years), and long-term (10+ years).
The EDSF builds upon the City’s vision of a robust and diversified local economy and identifies key Principles, Initiatives, and Actions to drive economic vitality while improving resident well-being. Each of the Actions correlates to a “partner” which defines who would likely be responsible for the action throughout our City’s economic ecosystem.
Plan Development Process – Timeline & Engagement: The EDSF was developed through a collaborative, data-driven process led by the consultant in partnership with the Office of Economic Development. Over the course of the last year, hundreds of stakeholders participated, ensuring the framework reflects community and regional input.
Major milestones in the process were as follow:
1.Project Kickoff (Late 2024 – Jan 2025): Formation of the project team and review of existing documents and plans. In January 2025, the consultant began intensive outreach, including stakeholder interviews and surveys with City officials, business leaders, and community representatives (over 550 responses were received) (Attachment B). Baseline economic data was collected and analyzed, covering employment, demographics, housing, tourism metrics, and more. Early SWOT analysis confirmed Palm Springs’ strong brand, robust tourism sector, and cultural assets as key strengths, while noting weaknesses such as overreliance on hospitality, high housing costs, and workforce constraints. This initial phase established consensus on the urgent need to diversify the economy and improve sustainability. This phase also included the identification of an economic committee to oversee and support the development of the framework.
2.Community Engagement (Feb – Apr 2025): Through February and March, the team held a series of focus groups, roundtables, and community workshops to gather broader input. Industry-specific focus groups (e.g. technology, arts, hospitality, sustainability) and neighborhood forums were convened to surface ideas and concerns. The City Council completed their study session in April that endorsed Economic Development as one of four City priorities. Throughout this period, outreach was inclusive of diverse stakeholders – from small business owners and major employers to residents, nonprofits, tribal representatives, and regional partners – reflecting the collective approach underlying the EDSF.
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Importantly, the Mayor convened several meetings of the Economic Council to discuss the vision of the plan.
3.Plan Drafting (May – July 2025): Using the input gathered, the consultant and staff developed the strategic framework. In May, a detailed SWOT Analysis was finalized, identifying key opportunities (such as growing a local technology ecosystem, promoting climate innovation, and leveraging remote work trends) and threats (such as climate change impacts on water and heat, growing regional competition, and a declining working-age population). These insights shaped the plan’s strategic priorities. By June 2025, an initial draft EDSF – including vision, strategic pillars, and proposed initiatives – was produced for internal review. A public draft was released in July for community comment, allowing residents and stakeholders to provide feedback on the proposed strategies.
4.Finalization and Approvals (Aug – Oct 2025): Over late summer 2025, public comments were incorporated and the plan was refined into its final form. The Economic Development Strategic Framework now being presented to Council reflects this extensive vetting and consensus-building process. Notably, the EDSF has been crafted to complement regional economic initiatives – for example, it aligns with Greater Palm Springs’ regional diversification efforts (such as Visit GPS’s new “Thrive and Shine” economic development campaign) and Riverside County’s Comprehensive Economic Development Strategy, positioning Palm Springs as a key partner in the broader diversification of the Coachella Valley economy. The final step in the planning process is City Council approval, which will establish the EDSF as an official guiding document for Palm Springs’ economic development. Upon adoption, staff will disseminate the EDSF to the public and begin executing the priority actions.
STAFF ANALYSIS:
Strategic Principles: The EDSF articulates five overarching strategic principles that will drive Palm Springs’ economic development efforts. Each pillar encompasses specific initiatives and action items (short-, medium-, and long-term) to achieve the stated goals:
1. Expand the City’s Economic Development Capacity: Build the City’s internal capacity and partnerships to effectively implement economic development initiatives. This includes aligning City regulations and policies with economic goals, enhancing staffing and resources dedicated to economic development, and exploring new structures such as an Economic Development Authority or public- private partnerships to leverage investment. The plan also recommends launching a dedicated economic development website/portal to serve as a “front door” for business resources and information. By boosting organizational capacity and regional collaboration, Palm Springs can more proactively shape its economic future.
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2. Reinvigorate the Business Climate: Improve the overall business environment to make it easier to start and grow a business in Palm Springs. Key actions include streamlining permitting and regulatory processes, expanding business incentives, creating formal business districts, and supporting extended- hours economy (night-time and off-peak activities). By reducing barriers to entry and actively marketing the city’s opportunities, Palm Springs aims to attract new investment and retain existing businesses, thereby increasing its economic resilience.
3. Bolster Existing Industries: Reinforce and expand Palm Springs’ established sectors – particularly tourism, hospitality, and arts & culture – to sustain the city’s competitive advantage as a premier destination. This includes initiatives to enhance the visitor experience, promote the Convention Center and events, and leverage recent investments like new hotels and attractions. Strengthening these core industries will ensure the city’s legacy economic drivers continue to thrive in a changing market.
4. Seed and Nurture Emerging Clusters: Diversify the economy by developing new industry clusters in technology, innovation, healthcare/wellness, and the creative economy. Palm Springs’ quality of life and unique environment can attract entrepreneurs and remote workers; the plan calls for building a robust tech ecosystem, supporting startups, promoting climate-related innovation, and positioning the city as a hub for health and wellness technology. These efforts will create year-round high-paying jobs and reduce reliance on seasonal tourism.
5. Strengthen Community Assets & Infrastructure: Invest in the critical infrastructure and community resources that underpin economic development and quality of life. This pillar focuses on improving transportation and mobility, expanding affordable and workforce housing, upgrading utilities and broadband, and implementing climate-resilient infrastructure (e.g. cooling and green energy solutions). It also emphasizes creating vibrant public spaces and cultural amenities. By modernizing infrastructure and addressing housing needs, the City will better support residents, workers, and businesses, making Palm Springs a more livable and attractive city for all.
Each strategic pillar is supported by a set of concrete initiatives and action steps (approximately 4–7 initiatives per pillar) which are detailed in the full EDSF document.
The plan assigns time horizons for actions – short-term (1–2 years), medium-term (3–5 years), and long-term (5–10 years) – to facilitate phased implementation and prioritization. This structured approach ensures that “quick wins” (such as process improvements or marketing campaigns) are undertaken in the near term, while more complex projects (like infrastructure upgrades or industry cluster development) are planned over a longer horizon with appropriate resources.
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The EDSF’s recommendations are also aligned with existing City policies and regional plans to maximize coherence and impact. By pursuing these strategic priorities, Palm Springs seeks to foster a vibrant, inclusive economy that balances growth with quality of life, sustaining the City’s prosperity for decades to come.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is limited to approving and excepting the subsidy reports, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Economic Development: Support a vibrant economy, including tourism, and new and existing businesses.
FISCAL IMPACT:
There is no direct fiscal impact in adopting the EDSF itself, but implementation of most strategies will require future budget allocations or grant funding, which would be presented to Council for approval on a case-by-case basis. The current FY2026 budget for Economic Development is approximately $1.3M, which includes earmarks for several of the initiatives described in this report. Of that $1.3M, staff has earmarked $450,000 to implement the immediate priorities (excluding the Convention Center which has its own fiscal plan, separate from Economic Development) by contracting with a management firm for a process and code audit, and for a marketing team for the economic development marketing plan both requiring separate RFP processes. Budget and approval of those contractors will come before the Council as needed. In addition, any new or updates to incentives will come before the Council as a matter of adoption of the policies pursuant to City requirements. Remaining funds are programmed for standing economic development programs, sponsorships and annual departmental costs, excluding staffing.
REVIEWED BY:
Department Director: Wayne Olson
City Manager: Scott Stiles
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ATTACHMENTS:
A. Palm Springs Office of Economic Development Economic Development Strategic Framework – 2025
B. Community survey results – late Spring 2025