City of Palo Alto - 2026 City Council Priorities
Business Retention, Expansion, and Attraction (BRE/A) Strategy Introduction:
At the January 24, 2026 meeting, the Palo Alto City Council reached consensus on adopting a 2026 Economic Development priority titled, “Enhance Business Vibrancy.” The City Council acknowledges the importance of Economic Development and the intersection between a healthy local economy and the City’s long-term fiscal sustainability. The City of Palo Alto continues to build from the current Economic Development Strategy to achieve the City Council’s goals and priorities.
Executive Summary:
Economic Development is taking a proactive approach to advocating for Palo Alto’s business and entrepreneurial ecosystem that is reflective of the population it serves.
Economic Development is a concerted effort by the City of Palo Alto’s City Council to ensure that the business climate is healthy. As such, the Economic Development team recommends that the Economic Development Ad Hoc Committee (formerly Retail Ad Hoc Committee) and City Council proceed with a formal Business Retention, Expansion, and Attraction (BRE/A) Strategy.
A Business Retention, Expansion, and Attraction (BRE/A) Strategy will formalize Economic Development’s Work Plan for calendar year 2026. A BRE/A Strategy consists of identifying key industries for retention, expansion, and attraction, proactive business engagement to build strategic partnerships, determining areas where the City of Palo Alto can gain a competitive advantage, and providing support for a favorable business environment that can lead to increased employment opportunities and overall economic prosperity. The BRE/A Strategy will result in preserving and enhancing the local business climate to ensure the City is fiscally stable to provide essential services that the Palo Alto community deserves.
The BRE/A Strategy includes two tactical categories: Enhance Business Vibrancy and Engagement and Promotions. While two 2026 City Council priority objectives are included in the BRE/A such as #29 to develop a formal business retention, expansion, and attraction program and #34 focused on activation activities and events, other key components include strengthening the tax base, developing a competitive advantage, real estate assets, business and community engagement, and promotions and marketing.
Performance Metrics are specific, measurable, achievable, relevant, and timely.
Enhance Business Vibrancy
Business Retention, Expansion and Attraction (BRE/A) Strategy – Enhancing Business Vibrancy is a 2026 City Council priority and includes priorities #29 and #34.
Strengthening the Tax Base
oSales tax, property tax, and transient occupancy tax revenue bases - Establish a formal Corporate Visitation Program. Review quarterly data for sales/transient occupancy tax revenues and bi-annually for property tax revenues to identify and respond to changing trends. Performance Metric:
Convene up to five of the top twenty-five sales tax generators by the end of 2026 with the goal of retaining businesses that enhance the City’s long-term fiscal sustainability on a quarterly basis.
oNew Investment Opportunities - Encourage new investments that create economic impact, multiplier effects and sales tax revenue. Performance Metric: Staff will explore financial and non-financial incentives and develop a list to support, retain, and grow business opportunities to drive economic vitality by Quarter 3 2026, and present to the Economic Development Ad Hoc Committee for review and feedback.
Competitive Advantage
oVenture Capital, Incubators, and Accelerators - IDA Ireland, Japan Innovation Campus (JIC), Consulate General and Innovation Centre Denmark, Nordic Innovation House, Flanders Investment and Trade (FIT), The Hive, Archimedes Labs, StartX, Venture Dock, etc. Performance Metric: Meet with at least four Venture Capital investment firms, incubators, and accelerators to develop foreign direct investment (FDI) opportunities and continue to cultivate the innovation and entrepreneurial ecosystem by the end of calendar year 2026.
oBusiness Technical Assistance - Performance Metric: Partner with the Silicon Valley Small Business Development Center (SV SBDC), Small Business Administration (SBA), SCORE, Chamber of Commerce, etc. to host two small business (live and virtual) training workshops in 2026. Real Estate Assets
oReal Estate Network - Property Owners, Real Estate Brokerage, Property Managers, and Development Community Network to foment relationships to fill vacant spaces and attract a mix of retail, office, and industrial businesses to enhance diversity of businesses for a broader customer base.
Performance Metric: Economic Development will host a Real Estate Broker roundtable by Quarter 4 2026 to learn about new opportunities, market trends, new uses, permit processes, and align development efforts with market needs.
oCity Real Estate Assets – Leverage City’s real estate assets for revenue generation. Performance Metric: Economic Development will execute a lease with Nobu for the use of 20 valet services parking spaces in Parking Lot Q by April 2026 to generate new revenues for the City.
Engagement and Promotions
Business and Community Engagement
oPublic-Private Partnerships - Engagement fosters trust and collaboration, allowing for effective partnerships that leverage resources for community projects - Performance Metric: Economic Development will promote the Retail Vibrancy Ordinance reflecting flexibility in land use/zoning to the real estate network starting in Quarter 2, and establish two office hour events on California Avenue and Downtown for additional business and community engagement opportunities by Quarter 3 2026.
oOpen Container Resolution and Entertainment Zone - Performance Metric: Economic Development will present to the Economic Development Ad Hoc Committee to obtain a recommendation for the City Council’s consideration of a California Avenue Entertainment Zone Ordinance in April/May 2026.
Promotions and Marketing
o2026 Activities and Events - Performance Metric: Economic Development will partner with businesses, Palo Alto Recreation Foundation, and Chamber on at least 3 California Avenue activities (3rdThursday/FIFA World Cup) and promote the hospitality sector (digital/print) during the 2026 sporting events (March Madness Tournament/FIFA World Cup) from March through July 2026.
The BRE/A Strategy is bounded by two strategic categories: Enhance Business Vibrancy and Engagement and Promotions. The two categories are supported by nine new Economic Development focused implementation actions for calendar year 2026.
Economic Development staff will continue to lead, co-lead, and/or monitor 2025 City Council priority projects currently underway including: #30 Retail Vibrancy Ordinance, #31 California Avenue Signage, and #33 California Avenue Outdoor Activation Guidelines.
Economic Development staff recommends suspending #35 Car-free street improvements on Ramona Street. And, obtain City Council feedback on whether to proceed with #39 California Avenue Design and Funding given that lack of financial resources and to directly focus on the aforementioned 2025 on-going projects and the new BRE/A Strategy.
The BRE/A Strategy lays a foundation for creating a vibrant, resilient, inclusive, and diversified economic future. Notwithstanding, the BRE/A Strategy highlights the need for a future Economic Development Strategy that serves as a policy document that will guide the City of Palo Alto’s economic development activities for a designated period. Should the City Council consider a new Economic Development Strategy, it would align with the City’s Comprehensive Plan and the Economic Development Element, Sustainability and Climate Action Plan (S/CAP), and other City policy documents. A new Economic Development Strategy will serve as Palo Alto’s road map to grow and diversify the local economy, support businesses and workers, and improve the quality of life for Palo Altans.