Item (d)3: City Council Focus Area Status
Report: Growing Our Economy
Executing Work While Building the
Infrastructure for Long-Term Impact
Community and Economic Development Committee
December 15, 2025
City of San José
City Manager’s Office
Rosalynn Hughey, Deputy City Manager, Growing Our Economy Jen Baker, Director, City Manager's Office of Economic Development and Cultural Affairs Focus Areas 2.0 – City Council Approved Evolution (Covered in Building More Housing Focus Area)
Agenda
1 2
3 Execution as Learning – Focus Area Portfolio Update
What’s Next? Focus Areas and the Fiscal Year 2026-2027 Budget Process 2 Logic models are the backbone
of Focus Areas 2.0
They help us clarify how our work is
intended to create impact by clearly aligning
strategies with problems and articulating
testable assumptions that we can learn from
and adapt to.
3 Each near-term goal has
success measures that
help tell the story of
whether the change
initiatives within the goal
are making an impact;
they serve as feedback
loops. In addition to a
goal’s success
measure(s), individual
change initiatives have
operational measures to
track progress.
Indicators measure progress
towards long-term goals. Indicators
NearTerm
Goals
Near-term goals are things the City aims to get done over the next fiscal year to help reach bigger, long-term goals. They are clear, measurable, and realistic, and help guide the day-to-day work of City departments.
These goals include early signs of progress that show what’s working, what’s not, and where changes might be needed.
Change initiatives are chosen for each near-term goal based on a hypothesis for how they can help the City achieve the goal. Some may involve work the team has done successfully before but needs to be assessed, while others may be new ideas worth testing.
Metrics
Long-term goals focus on big-picture results that matter to residents (outcomes). These goals look at past outcomes to show how the city is doing over time. The progress is measured with clear indicators.
Long-Term
Goal
Problem
These are common, well-understood challenges that help explain what’s needed to reach long-term goals. Each problem connects clearly to a near-term goal and a project that you think can help fix it. 4 Focus Area 2.0 – City Council Approved Evolution
Logic Model Structure
Goal Status
Green-On track
Yellow-At risk/Pivot
Red-Off track
Not Started
Growing Our Economy Focus Area
Performance Dashboard
Jobs, Revenue, Downtown Vibrancy, Small Businesses, Income Diversity Ratio Problem
Areas
Near-Term
Goals
(FY 2025-
2026)
1. Business Development and
Workforce Preparedness 2. Infrastructure Readiness
3. Downtown and
Neighborhood Business
Districts Investment
4. Sports and Entertainment District
Development
1.1 Engage employers and connect them to resources
that attract and retain 5,000 jobs by June 2026.
1.2 Identify priority growth sectors (such as
manufacturing and AI). Customize business outreach
activities engaging priority sectors and bringing
visibility to the City's competitive assets.
1.3 Analyze job attraction, retention, and expansion
performance measure methodology and data sources
and report to December CED Committee.
1.4 Implement two program improvements from FY
2024-2025 workforce pilot for 125 unstably
housed residents.
1.5 By March 2026, work2future will launch a pilot
selection paid work experience trainings related to
AI, with 80 clients enrolling by June 2026.
1.6 Implement AI tool for skills assessment and job
matching and bring results and recommendations to
CED Committee meeting in June 2026.
2.1 Three data centers/large energy projects receive
permanent power from PG&E by June 2026.
2.2 Two new data center/large energy projects in the
Building Plan Review phase by June 2026.
2.3 Five new data center/large energy projects in the
Planning Entitlement phase by June 2026.
2.4 Define and execute an Exclusive Negotiating
Agreement for development of the Economic
Development Lands near the Regional Wastewater
Facility by March 2026.
2.5 Issue first LS Power utility construction permit by June 2026.
3.1 Generate five commercial lease renewal
commitments in Downtown of 5,000 square feet or more
by June 2026.
3.2 Facilitate five new ground-floor business attractions to Downtown by June 2026.
3.3 Implementation of four Downtown placemaking
initiatives by June 2026.
3.4 Formation of one new business improvement district
by June 2026.
3.5 Implement two new small business grant programs
and assess need and interest by business and project
type.
3.6 Accelerate small businesses by streamlining one City process.
4.1 Develop conceptual plan for a Sports and
Entertainment District and present to City Council
by December 2025.
4.2 Facilitate an updated study of a Convention Center
Expansion/HQ Hotel and present to City Council by
December 2025.
4.3 Develop administrative guidelines for Entertainment Zone implementation by December 2025.
4.4 Produce or facilitate at least eight cultural outdoor special events specific to 2026 activities and deliver six public artworks.
4.5 Facilitate at least 485 city-wide outdoor special event days that cumulatively drive over two million attendees.
4.6 Work with external partners to measure economic impact of 2026 major sporting events with the goal of capturing 20% of all direct spending within the Bay Area.
Indicators
Long-Term Goal. Cultivate an ecosystem for thriving businesses and resident prosperity. • Business Attraction Strategy
• Business Intelligence Capture
• Workforce program for unstably housed
residents
• work2future AI tools
Change • WIOA Reauthorization advocacy
Initiatives
• Fast-track development pathway
• Concierge model for major investors
• Targeted marketing and engagement with large
energy customers
• Regional Wastewater Facility Economic
Development Lands
• Partnerships with regional utilities and state
agencies
• Business Attraction Strategy
• Downtown Office Incentive Program
• Stitching Districts
• Business Improvement District formation
• Business grant programs – Neighborhood and
Start-up
• Small Business Ally
• Sports and Entertainment District Conceptual Plan
• Convention Center Expansion/HQ Hotel Study
• Entertainment Zone implementation
• 2026 major sporting events activations
• Outdoor special events
5 Performance Dashboard
As a major innovation hub, San José operates within a region marked by high demand and competitiveness. External conditions—including housing and construction costs, regulatory mandates, and broader economic trends—affect investment decisions, yet the City remains focused on advancing growth and opportunity.
This is how we're meeting the moment.
The City will emphasize our comparative advantages to inform business engagements, prepare our workforce, and drive infrastructure readiness opportunities to grow employment and jobs. Downtown and neighborhood business district investments will advance community placemaking activities and sports and entertainment district formation planning.
Introduction
and
Indicators
Growing our Economy Focus Area
Long-Term Goal. Cultivate an ecosystem for thriving businesses and resident prosperity. 6 Jobs Revenue Downtown
Vibrancy
Small
Businesses
Income
30,600 more jobs Inequality
(7.7% jobs gained)
from 2020-2024
Staff will report
quarterly data by
sector starting in
February 2026.
+ 722 net new
businesses JulySept. 2025
98% of businesses in
San José are small
businesses
Income inequality is
growing
A 60th percentile
earners make 3.4x
more in income
than a 30th
percentile earner
Downtown is
more vibrant
+8% survey rating
How can we increase
tax revenue?
Property
Sales
Utility
Growing Our Economy Focus Area
Performance Dashboard
Long-Term Goal. Cultivate an ecosystem for thriving businesses and resident prosperity.
1. Business Development and Workforce Preparedness. To remain competitive, San José must strengthen engagement with key growth industries and prepare local talent for the jobs of the future.
San José is a hub for innovation with a diverse
industry base, available land, and strong talent that
attract development opportunities.
As a technology destination, San José is subject to
intense regional competition, variable market
demands, and high cost of living and doing
business.
We need strong engagement with key industries
and to prepare local talent for the jobs of the future. 7 1. Business Development and Workforce Preparedness. To remain competitive, San José must strengthen engagement with key growth industries and prepare local talent for the jobs of the future.
Growing Our Economy Focus Area
Performance Dashboard
8 Goal 1.2 Identify priority growth sectors (such as manufacturing and AI). Customize business outreach activities engaging priority sectors and bringing visibility to the City's competitive assets.
Goal 1.1 Engage employers and connect them to
resources that will attract and retain 5,000 jobs by
June 2026.
Wins
• In Q1 FY 2025-2026, staff retained, expanded,
and/or attracted 1,300 jobs.
• Highlights of the team’s work through Q2 include
retention efforts with semiconductor company
DISCO Hi-Tech America, expansion of Rose
Battery, celebrating a new North San José
location for Netgear, and welcoming Lucid Motors
into the Downtown Growth Area.
Learnings/Adjustments
• Business facilitation work can take on a variety of
different forms – needs to be personalized based
on City opportunities and company needs.
Wins
• The Business Development team exhibited at SEMICON
West, the leading U.S. semiconductor industry convening, as part of the California delegation. Presence at this
convening is important to keep the semiconductor industry in California and in San José.
• Priority sectors identified: hardware and processing
technology, advanced manufacturing, semiconductors,
research and development for technology
innovation/AI, robotics, quantum computing,
photonics, existing retail, and healthcare innovation.
Learnings/Adjustments
• Staff will secure a new corporate prospecting tool to facilitate more informed and strategic corporate outreach.
1. Business Development and Workforce Preparedness. To remain competitive, San José must strengthen engagement with key growth industries and prepare local talent for the jobs of the future.
Growing Our Economy Focus Area
Performance Dashboard
Performance Measure Methodology
When staff addresses a top priority for a business, staff records jobs for this performance measure as a retention, expansion, or attraction.
Jobs data is collected from the City’s business certificate database, which is populated with information that is self-reported by companies.
Definitions:
• Attraction: New company without physical location in San José • Retention: Company that has a physical location in San José • Expansion: Company that has a physical location in San José and adds jobs Major Categories of Support
• Connecting to state/federal programs or incentives (ex. CHIPS) • Unsticking a City process (e.g., permitting, event/holiday traffic management) • Company becoming a Foreign Trade Zone
Learning/Adjustments
• Focus for this performance measure is existing large employers and tax revenue generators in San José (retention/expansion) and key industries (attraction).
• With high regional costs, smaller companies that are willing to pay a premium to establish and grow here are opportunities for attraction, as well as large local employers that relocate or expand into San José, and large corporations seeking to grow their presence in San José. • When available, staff will include construction jobs generated and disaggregate them in reporting. • Connections made through both proactive outreach and inbound communications. 9 Goal 1.3 Analyze job attraction, retention, and expansion performance measure methodology and data sources and report to December CED Committee.
Examples:
• Retention: Cisco Headquarters – legacy
companies keeping headquarters here
• Moved headquarters to Santana
Row after acquiring Splunk (950
employees)
• Attraction: Welcoming Lucid Motors into
the Downtown Growth Area - innovative
companies continue to be attracted to San
José.
1. Business Development and Workforce Preparedness. To remain competitive, San José must strengthen engagement with key growth industries and prepare local talent for the jobs of the future.
Growing Our Economy Focus Area
Performance Dashboard
10 Goal 1.6 Implement AI tool for skills
assessment and job matching and bring
results and recommendations to June CED.
Goal 1.4 Implement two program
improvements from FY 2024-2025
workforce pilot for 125 unstably housed
residents.
Goal 1.5 By March 2026, work2future will
launch trainings related to AI, with 80
clients enrolling by June 2026.
Wins
• To date, 69 unstably housed
clients have enrolled in the
pilot workforce development
program.
Learnings/Adjustments
• Ongoing intensive case
management in partnership
with community-based
organizations remains critical.
• Majority of clients enrolling are
young adults aged 18-24.
Wins
• Since July 1, 2025, the
workforce development team
has launched 50 AIrelated trainings, with 31
clients enrolled so far.
Learnings/Adjustments
• These trainings are tailored
to application of AI tools
across a wide variety of highwage, high-growth
professions.
Wins
• On track to implement
AI tools by March 2026.
Learnings/Adjustments
• Progress with IT to
understand potential
tools and implement.ion,
Growing Our Economy Focus Area
Performance Dashboard
Long-Term Goal. Cultivate an ecosystem for thriving businesses and resident prosperity.
2. Infrastructure Readiness. Companies need infrastructure that enables them to succeed.
Through strategic marketing and permit
streamlining, San José can attract large-scale
growth, create jobs, and strengthen our brand
as an economic hub.
San José is known as an innovative and
future-focused city. The City is building the
energy infrastructure to support premium
development opportunities.
There is strong regional and national
competition for premium revenue generating
development opportunities.
Image created by Gemini 11
2. Infrastructure Readiness. Companies need infrastructure that meet their needs.
Growing Our Economy Focus Area
Performance Dashboard
Wins
• Staff received substantial new interest in data center projects following the City’s partnership agreement with PG&E, providing valuable insights into how best to educate prospective developers about PG&E’s large-load cluster study and interconnection process so they have the information needed to make informed investment decisions in San José.
Learnings/Adjustments
• The Data Center Development Team was formed to coordinate and remove hurdles for projects moving through entitlement and building plan review. Early work has shown a clear learning curve among both applicants and City staff regarding data center requirements, environmental review pathways, and how to handle unconventional proposals such as mixed residential–data center developments. • Large-scale fire testing requirements for Energy Storage Systems (e.g., Backup batteries) may significantly slow or complicate project delivery. This underscores the need for continued monitoring as more applicants include Energy Storage Systems in their designs.
12 19 data centers/large energy
projects in development pipeline as
of Sept 2025.
3 out of 17 Data center/large
energy projects progressed to the
next stage between June and Sept
2025.
Estimated $2.1M in projected utility
tax revenue generated by data
center/large energy projects in FY
2026-2027 for projects under
construction.
Goal 2.1 Three data centers/large energy projects receive permanent power from PG&E by June 2026.
Goal 2.2 Two new data center/large energy projects in the Building Plan Review phase by June 2026.
Goal 2.3 Five new data center/large energy projects in the Planning Entitlement phase by June 2026.
2. Infrastructure Readiness. Companies want infrastructure that meet their needs.
Growing Our Economy Focus Area
Performance Dashboard
13 Goal 2.4 Define and execute an Exclusive
Negotiating Agreement describing land use,
infrastructure, and staging for development of the
Economic Development Lands near the Regional
Wastewater Facility by March 2026.
Wins
• Council authorized staff to negotiate and execute
an Exclusive Negotiating Agreement with
Prologis Inc. on November 18, 2025.
Learnings/Adjustments
• Proactive communication and coordination with
stakeholders is key.
• Optimization and fiscalization of City-owned land
is vital.
Wins
• Construction will not impact 2026 sporting event activations Downtown.
Adjustments/Learnings
• CPUC final decision on CEQA required before
franchise agreement can be adopted. Staff adjusted
the process and timeline to accommodate CEQA
requirements.
• CEQA completion required an adjustment to go to Council March 2026; still on track to issue permits by June 2026.
Goal 2.5 Issue first full LS Power Utility Permit by June 2026.
Growing Our Economy Focus Area
Performance Dashboard
Long-Term Goal. Cultivate an ecosystem for thriving businesses and resident prosperity.
3. Downtown and Neighborhood Business Districts: When Downtown thrives, San José thrives. Neighborhood business districts drive shared prosperity and placemaking city-wide.
The formation of new business
improvement districts revived a key
strategy for investment. Placemaking
efforts and the upward trend in Convention
Center bookings and hotel demand further
strengthen the city’s economic trajectory.
Downtown still faces negative perception
and quality of life concerns. There is a citywide challenge around commercial and office vacancy, and increased costs of
doing business.
We’re supporting business districts
through increased business attraction and
retention efforts and placemaking
investments.
*
14 3. Downtown and Neighborhood Business Districts: When Downtown thrives, San José thrives. Neighborhood business districts drive shared prosperity and placemaking city-wide.
Growing Our Economy Focus Area
Performance Dashboard
Wins
• Three companies have utilized the Downtown Office Leasing Incentive Program since it was approved by Council in October 2024.
• Two lease renewal commitments secured through Q2 FY 2025-2026. • Three business attractions secured from Lucid Motors, Poppy & Claro, and VTA's Security Office. • Three placemaking initiatives were completed in Q1 Fiscal Year 2025-2026, with three ongoing. 2026 major sporting events are a valuable driver for placemaking, with several partners interested in supporting improvement efforts.
Learnings/Adjustments
• The parking benefits available in the Downtown Leasing Incentive, were just recently made more accessible by removing onerous insurance requirements. The three companies utilizing the program are now able to access the free parking benefit.
• Various additional companies are looking for suites under 2,500 square feet, which fall below the threshold for the leasing incentive. Staff learned that the Downtown Office Leasing Incentive Program works best for more established small businesses and fits the needs of early-stage start-ups less. These companies are more inclined to lease a smaller space or join an existing co-working space. • Downtown companies remain committed to Downtown but are exploring moves within the core as higher-quality and more cost-effective office options become available. 15 Goal 3.1 Generate five commercial lease renewal commitments in Downtown of 5,000 square feet or more by June 2026.
Goal 3.2 Facilitate five new ground-floor business attractions to Downtown by June 2026.
Goal 3.3 Implementation of four Downtown placemaking initiatives by June 2026.
3. Downtown and Neighborhood Business Districts: When Downtown thrives, San José thrives. Neighborhood business districts drive shared prosperity and placemaking city-wide.
Growing Our Economy Focus Area
Performance Dashboard
Wins
• Sufficient desire exists within the business community along the Alum Rock and The Alameda business corridors to bring forward resolutions of intention to form business improvement districts in these areas to City Council on December 16, 2025.
• The Small Business Advisory Committee provided
substantive input to the design and evaluation of the new business start-up grant programs scheduled to launch in January 2026.
Learnings/Adjustments
• The use of a consultant, in partnership with staff, is critical to outreach, identification of business leaders, and forming strong business association and improvement districts.
16 Goal 3.4 Formation of one new business improvement district by June 2026.
Goal 3.5 Implement two new small business grant programs and assess need and interest by business and project type.
Goal 3.6 Accelerate small businesses by streamlining one City process.
Growing Our Economy Focus Area
Performance Dashboard
Long-Term Goal. Cultivate an ecosystem for thriving businesses and resident prosperity.
4. Sports and Entertainment District Planning: There is an opportunity to activate San José as the South Bay's hub for sports and entertainment.
There is momentum around sports and
entertainment in San José including the
renewed agreement with the Sharks and
2026 major events.
There is an opportunity to analyze catalytic
economic drivers through long-term
investment in sports and entertainment
infrastructure.
There is an opportunity to invest in new
state-of-the art sports facilities to sustain
growth and momentum through a sports
and entertainment district.
17 4. Sports and Entertainment District Planning: Activate San José as the South Bay's hub for sports and entertainment.
Growing Our Economy Focus Area
Performance Dashboard
How will we drive results this fiscal year?
As important as 2026 major sporting events are for our local economy and sense of civic pride, fully capturing the potential of our local experience economy requires a longer-term plan.
Wins
• Two workgroup sessions with primary stakeholders and
design experts on the number/types of complementary,
characteristic district venues, and how they are connected. • Technical Advisors secured by TSJ to evaluate
and scope a Convention Center renovation/expansion project Learnings/Adjustments
• Need to synthesize Convention Center study with Entertainment District research. They pull from the same set of opportunities, assets, and limitations. Therefore, deliverables have shifted to an info memo to be released by Q1 FY 2025-2026.
• September 2025 Study Trip to Atlanta: Entertainment DistrictFocused Learning. • Office space can re-emerge around successful districts.
How can we
leverage catalytic
investments and
long-term revenue
generation through
sports and
entertainment?
18 Goal 4.1 Develop conceptional plan for a Sports and Entertainment District and present to City Council by December 2025.
Goal 4.2 Facilitate an updated study of a Convention Center Expansion/HQ Hotel and present to City Council by December 2025.
4. Sports and Entertainment District Planning: Activate San José as the South Bay's hub for sports and entertainment.
Growing Our Economy Focus Area
Performance Dashboard
How will we drive results this fiscal year?
Promote Entertainment Zones as a tool for community-led events. Conduct outreach to inform and educate stakeholders and event organizations.
Wins
• Launch of entertainment zone website and toolkit.
Learnings/Adjustments
• Recent clarification from the California Department of Alcoholic Beverage Control confirms that one-day liquor licenses may be issued for events within Entertainment Zones. This clarification removes a major barrier to temporary outdoor alcohol sales and enables Entertainment Zones activations.
19 Goal 4.3 Develop administrative guidelines for Entertainment Zone implementation by December 2025.
4. Sports and Entertainment District Planning: Activate San José as the South Bay's hub for sports and entertainment.
Growing Our Economy Focus Area
Performance Dashboard
Wins
• Staff facilitated 310 city-wide events days, from July 1, 2025, to November 24, 2025, reaching 64% of annual goal of 485 event days. These event days have either already happened or are already booked/conditionally approved. Event days are used to account for multi-day events.
• Coordination underway for six CityDance events before each FIFA World Cup match at Levi’s Stadium. Event concepts will activate Downtown vibrancy, support local artists, and enhance the regional visitor experience.
• In partnership with Visit San José, launched the Arts Will Play in 2026! Cultural Tourism Marketing Opportunity. This digital marketing campaign will promote cultural tourism in 2026 through a diverse set of events and programs that uniquely reflect San José’s culture. Selected through a competitive proposal process, organizations will receive $10,000 in digital marketing ad buys plus a customized digital marketing strategy developed in partnership with Visit San José. Recipients include: School of Arts & Culture at the Mexican Heritage Plaza, Symphony San Jose, and Vietnamese American Roundtable.
Learnings/Adjustments
• Recent improvements to the outdoor event facilitation process, paired with policy updates to the Private Property Ordinance, are spurring more event activations. 20 Goal 4.4 Produce or facilitate at least eight cultural outdoor special events specific to 2026 activities and deliver six public artworks.
Goal 4.5 Facilitate at least 485 city-wide outdoor special event days that cumulatively drive over two million attendees.
4. Sports and Entertainment District Planning: Activate San José as the South Bay's hub for sports and entertainment.
Growing Our Economy Focus Area
Performance Dashboard
How will we drive results this fiscal year?
During the budget process, the Office of Economic Development and Cultural Affairs realigned core services with the Economic Development Strategy Work Plan. This process created a new performance measure: percent of major sporting events generating over $100M of economic impact occurring in San José.
Learnings/Adjustments
• The City is working with external partners to develop new and consistent methodology to estimate economic impact for major sports events including Super Bowl LX, NCAA Men’s Basketball West Regional Games, and FIFA World Cup in 2026 and beyond.
• Team San Jose has secured software module consistent with other performance measures.
• Limited control over other partners who may prefer other methodology. Our approach may be more conservative than other entities.
How can we
better understand
and consistently
track economic
impact of major
events?
21 Goal 4.6 Work with external partners to measure economic impact of 2026 major sporting events with the goal of capturing 20% of all direct spending within the Bay Area.
What’s Next?
Focus Areas and the
FY 2026-2027 Budget
Process
22 What’s Next?
Focus Areas and the FY 2026-2027 Budget Process
January
Embedding Focus Area discussion into the Budget Process to ensure co-creation of strategies aimed to meet our Long-Term Goals Mayor’s March Message.
Direction given through the Message will
inform exploration/scoping of future focus area
work, that may include problem areas or
specific change initiatives for FY 2026-2027.
Any contemplated changes for the following
fiscal year should be explored in this context.
City Manager’s Proposed Budget.
The Administration may propose change
initiatives for FY 2026-2027, stemming from
learnings derived from current year’s
execution.
February March
April May June
June Budget Message.
Through the adoption of the June Budget
Message, the City Council will formally adopt
the Focus Area workplans for FY 2026-2027.
Priority Setting.
Staff will embed Focus Areas into the 2026-
2027 Preliminary General Fund Forecast and
Budget Priorities Study Session to cultivate a
discussion that supports the City Council
articulating its priorities (given budget
constraints and required reductions) in
advance of the Mayor’s March Message.
Budget Study Session.
The Administration will embed Focus Area
learnings into a Budget Study Session; this
will include recommended changes to the
following year’s Focus Area work.
Manager’s Budget Addendum (MBA).
The Administration will publish an MBA that
summarizes all feedback/ideas contemplated
through the budget process and establishes a
recommended path for FY 2026-2027.
23 Item (d)3: City Council Focus Area Status
Report: Growing Our Economy
Executing Work While Building the
Infrastructure for Long-Term Impact
Community and Economic Development Committee
December 15, 2025
City of San José
City Manager’s Office
Rosalynn Hughey, Deputy City Manager, Growing Our Economy Jen Baker, Director, City Manager's Office of Economic Development and Cultural Affairs 24