City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: October 5, 2026
Report #:2609-6716
TITLE
Approval of Business Retention, Expansion, and Attraction (BRE/A) Strategy as Recommended by the Economic Development Committee: CEQA – Not a Project
RECOMMENDATION
The Economic Development Committee and staff recommend approval of the 2026 Business Retention, Expansion, and Attraction (BRE/A) Strategy.
EXECUTIVE SUMMARY
The Economic Development team has developed a 2026 Business Retention, Expansion, and Attraction (BRE/A) Strategy to create a sustainable, resilient, and thriving local economy characterized by a strong sense of identity in Silicon Valley. On January 24, 2026, the City Council reached consensus on adopting a 2026 economic development priority titled, “Enhance Business Vibrancy” at the Council Retreat on values, priorities, and objectives. This reflects the importance of economic development and the intersection between a healthy local economy and the City’s long-term fiscal sustainability. The City continues to build from the current Economic Development Strategy to achieve the City Council’s goals and priorities.
BACKGROUND
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 Palo Alto City Council to ensure that the business climate is healthy. Originally scheduled in March (deferred to accommodate time critical items), on August 26, 2026, the Economic Development Committee voted unanimously to recommend BRE/A Strategy approval by the City Council. Implementation actions are already well underway.
ANALYSIS
A Business Retention, Expansion, and Attraction (BRE/A) Strategy has formalized Economic Development’s Work Plan for calendar year 2026. The 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 the BRE/A Strategy is meant to develop a formal business retention, expansion, and attraction program, other key components include strengthening the tax base, developing a competitive advantage, real estate assets, business and community engagement, and promotions and marketing through activation activities and events as well as enhancing the Palo Alto brand in innovation and entrepreneurship globally. The BRE/A Strategy’s implementation actions are outlined below and more in depth via Attachment A:
BRE/A Strategy.
Enhance Business Vibrancy:
Strengthening the Tax Base
• Sales Tax, Property Tax, and Transient Occupancy Tax Revenue Bases - Corporate Visitation Program
• New Investment Opportunities - Financial and Non-Financial Incentives Competitive Advantage
• Venture Capital, Incubators, and Accelerators - VCs, Incubators/Accelerators and Foreign Direct Investment
• Business Technical Assistance - Guide Businesses to Build Capacity and Reach Business Goals
Real Estate Assets
• Real Estate Network - Property Owners/Managers and the Real Estate Brokerage and Development Communities
• City Real Estate Assets - Leverage the City’s Real Estate Assets for Revenue Generation Engagement and Promotions:
Business and Community Engagement
• Public-Private Partnerships (P3s) - Build Trust/Collaboration for Effective Partnerships • Entertainment Zone Ordinance - Approved by the City Council in late spring 2026 Promotions and Marketing
• 2026 Activities and Events - Cultivate Vibrant Public Spaces that Attract Investment • Enhance the Palo Alto Brand Through Innovation and Entrepreneurship Branding
FISCAL/RESOURCE IMPACT
The ten BRE/A Strategy implementation actions described above and specifically in Attachment A will be completed with staff time as part of the 2026 Economic Development work program will not require any additional funds and currently scoped.
STAKEHOLDER ENGAGEMENT
Staff has received support for the proposed BRE/A Strategy from the Chamber of Commerce, especially as it relates to business retention, branding, and reestablishing the Downtown Business Improvement District (BID) for cleanliness and public safety.
On August 26th, representatives from the business and real estate communities expressed support for the BRE/A Strategy at the Economic Development Committee meeting. Public comments shared at the meeting included, but is not limited to: support for the Retail Vitality Ordinance and the BRE/A Strategy, interest in Ramona Street placemaking strategies, regional competitiveness, connecting land use and economic development, question the benefits of reactivating the BID, illustrating the return on investment on City Council and Planning and Transportation Commission policies, and seek to integrate economic development consideration into staff and the City’s decision-making bodies.
Economic Development Committee members also shared comments, which include but are not limited to the following: appreciation for the BRE/A Strategy moving forward and inquired about next steps, new investment opportunities for office, commercial, and hotel development, seasonal markets and pop-up retail/events to invigorate business districts, enhancing Palo Alto’s brand through swag, and to ensure that staff does not ignore the jobs and housing ratio.
ENVIRONMENTAL REVIEW
The receipt and acceptance of the BRE/A Strategy is not a project under the California Environmental Quality Act (CEQA) because the BRE/A Strategy has no potential to cause a significant effect on the environment. CEQA Guidelines section 15061(b)(3).
ATTACHMENTS
Attachment A: BRE/A Strategy
APPROVED BY:
Ed Shikada, City Manager