(d)3: City Council Focus Area Status
Report: Growing our Economy
Community and Economic Development Committee
June 15, 2026
City of San José
City Manager’s Office
Jen Baker, Director, Office of Economic Development and Cultural Affairs Blage Zelalich, Deputy Director, Office of Economic Development and Cultural Affairs Erica Garaffo, Assistant to the City Manager, Office of Economic Development and Cultural Affairs Focus Area Background
Agenda
1 2
3 Execution as Learning – Focus Area Portfolio Update
Next Steps
2 3
Focus
Areas (5)
Core Services (74)
Budget Programs (259)
Complex long-term
initiatives requiring
significant staff
capacity and crossdepartment
coordination
Services that the
City routinely
delivers and
Departments largely
manage
independently
Focus Areas
An Opportunity to Evolve
We are cultivating an organizational mindset
of learning and continuous improvement that
will drive results for our community
While data support storytelling, numbers alone do not show progress and require context setting
Learning in public builds trust and accountability
Retrospection contributes to learning and understanding Progress requires humility, iteration, and commitment 4 Focus Areas
Philosophy and Principles
Growing our Economy
Focus Area
5 Q3 Portfolio Retrospective
Growing Our Economy Focus Area
Cultivate an ecosystem for thriving businesses and resident prosperity. Long-Term Goal Indicators
Small Businesses
In Q1 and Q2,
a total of 2,396 small
businesses opened
and 2,010 closed.
6 100K
200K
300K
400K
500K
201420152016201720182019202020212022202320242025
Jobs
$0M
$100M
$200M
$300M
$400M
$500M
$600M
FY22 FY23 FY24 FY25 FY26 FY27
Tax Revenue
Property Tax Sales Tax Utility Tax
0%
10%
20%
30%
40%
50%
60%
Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26 Downtown Vibrancy
0 1
2 3
4 2018 2019 2020 2021 2022 2023 2024
Income Inequality
Data Highlights
• +29k jobs since 2020, but below prepandemic peak
• Downtown Vibrancy +8% since FY24
• 20th percentile earner would need to more
than triple their income to enter the middle
class (60th percentile)
7 Long-Term Cultivate an ecosystem for thriving businesses and resident prosperity.
Goal
Blue: Complete
Green: On Track
Yellow: Needs Attention
Red: Off Track
Gray: Not Started
Growing Our Economy Focus Area
Performance Dashboard
Goal 1.1 Engage and Attract Jobs.
Goal 1.2 Priority Growth Sectors.
Goal 1.3 Analyze Attraction, Retention, Expansion Data.
Goal 1.4 Workforce Pilot Improvements.
Goal 1.5 Work2Future AI Pilot.
Goal 1.6 AI-Focused Workforce Training.
1. Business Development and Workforce
Preparedness. Problem
Problem 2. Infrastructure Readiness.
Goal 2.1 Three Data Centers Receive Permanent Power.
Goal 2.2 Two New Data Centers in Building Plan Review Phase.
Goal 2.3 Five Data Centers in Planning Entitlement Phase.
Goal 2.4 Exclusive Negotiating Agreement – Eco Dev Lands.
Goal 2.5 First LS Power Utility Construction Permit.
3. Downtown and Neighborhood Business
Districts Investment. Problem
Goal 3.1 Five Commercial Lease Renewals in Downtown.
Goal 3.2 Five New Ground-Floor Business Attractions.
Goal 3.3 Four Downtown Placemaking Initiatives.
Goal 3.4 One New Business Improvement District.
Goal 3.5 Two New Small Business Grant Programs.
Goal 3.6 Accelerate Small Businesses – Streamline one City Process.
Goal 4.1 Sports and Entertainment District Conceptual Plan.
Goal 4.2 Convention Center Expansion/HQ Hotel Study.
Goal 4.3 Entertainment Zone Administrative Guidelines.
Goal 4.4 Eight Cultural Events + Six Public Artworks.
Goal 4.5 485 Outdoor Event Days and 2M Attendees.
Goal 4.6 Measure Economic Impact of 2026 Sporting Events.
4. Sports and Entertainment District
Development Problem
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 1.1 Engage employers and connect them to resources that will attract and retain 5,000 jobs by June 2026.
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 1.3 Analyze job attraction, retention, and expansion performance measure methodology and data sources and report to December CED Committee.
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.
Goal 1.6 Implement AI tool for skills assessment and job matching and bring results and recommendations to June CED Wins
• Through Q3 FY 2025-2026, jobs attracted, expanded, and retained is 3,978 jobs. • Implemented and expanded AI-focused workforce training initiatives through training providers, online Metrix Learning, and hybrid workshops, serving approximately 475 participants in areas including generative AI, machine learning, AWS, AI workplace productivity tools, data analytics, and AI-enhanced business applications.
Learnings/Adjustments
• Demonstrated strong participant interest in applied AI training tied to workplace functions, particularly in administrative, accounting, and business service occupations. Recommendations include continued expansion of AI training pathways.
2. Infrastructure Readiness. Companies need infrastructure that meet their needs.
Growing Our Economy Focus Area
Performance Dashboard
Wins
• Received two additional planning applications for large energy projects, for a total of four for the fiscal year. Anticipating one additional application in June.
• LS Power Franchise Agreement: Effective May 8, 2026. 2.3% of net revenue. First permits issued before May 11, 2026 construction start.
Learnings/Adjustments
• One of three data centers will be energized by August 2026, two months behind schedule, due to a materials delay. • After initially pausing to allow the City of Santa Clara time to determine their desired form of participation with the Exclusive Negotiating Agreement, staff are now negotiating a cost reimbursement agreement and an Exclusive Negotiating Agreement directly with Prologis and aim to execute these documents by June 2026. 9 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.
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.
Goal 2.5 Issue first full LS Power Utility Permit by June 2026.
3. Downtown and Neighborhood Business Districts: When Downtown thrives, San José thrives. Neighborhood business districts drive shared prosperity and placemaking citywide.
Growing Our Economy Focus Area
Performance Dashboard
Wins
• Six business attractions secured through Q3, including Poppy & Claro, Bay Padel, the VTA Security Building, West Coast Community Bank, Lucid Motors, and Strata.
• Nine Downtown placemaking initiatives have been completed to date. • One of the small business grant programs, Start Up Grant Program, is on track to be awarded by June.
Learnings/Adjustments
• Staff will launch the second small business grant program, Neighborhood Economic Grant Program, in June 2026. Awards are forecast in December 2026. The extended timetable was agreed in response to feedback from business associations to allow sufficient time to work with local property owners and investors. • The Information Memo on improving Outdoor Seating workflow, published June 9th, sets out the next steps led by Public Works with PBCE and OEDCA staff. Follow-up work has taken longer than anticipated as partner departments have aligned on the appropriate lead role and decision-making structure to advance the permitting process review. • PBCE and OED staff have held an initial meeting with County Health staff to re-establish a coordinated review process around issuance of health certificates for restaurants/food businesses. 10 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.
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
11 Wins
• Produced and/or facilitated eight special events and seven public artworks specific to SJ26 activities. • Facilitated 622 event days (193 event permits), representing 128% of the goal. Estimated attendance to date, through Q3, is 1.95 million.
• Identified uniform metrics and timelines with Team San José and the San Jose Sports Authority to commission a comprehensive economic impact report on 2026 major sports events.
Learnings/Adjustments
• Staff issued an information memorandum in March 2026, which summarizes key learnings and considerations from consultant analyses, including benchmarking of how peer cities develop sports and entertainment districts and the investment implications for the Convention Center and HQ Hotel.
4. Sports and Entertainment District Planning: Activate San José as the South Bay's hub for sports and entertainment.
Goal 4.1 Develop conceptional plan for a Sports and Entertainment District and present to City Council by Dec. 2025.
Goal 4.2 Facilitate an updated study of a Convention Center Expansion/HQ Hotel and present to City Council by Dec. 2025.
Goal 4.3 Develop administrative guidelines for Entertainment Zone implementation by December 2025.
Goal 4.4 Produce or facilitate at least 8 cultural outdoor special events specific to 2026 activities and deliver 6 public artworks.
Goal 4.5 Facilitate at least 485 city-wide outdoor special event days that cumulatively drive over two million attendees.
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
12 What’s Next?
Focus Areas and the FY 2026-2027 Budget Process
Embedding Focus Area discussion into the Budget Process to ensure co-creation of strategies aimed to meet our Long-Term Goals 13 Now
• Manager’s Budget Addendum. The Administration published an MBA that establishes a recommended path for FY 2026-2027 Focus Area work plans based on City Council direction in the Mayor’s March Budget Message.
• June Budget Message. Through adoption of the June Budget Message, the City Council will formally adopt the Focus Area work plans for FY 2026-2027.
Next
• Fall 2026. The Administration will bring a FY 2025-2026 Focus Area Annual Report to City Council providing final progress and lessons learned from the past fiscal year work plan.
Later
• December 2026. Each respective Committee will receive a status update on progress and lessons learned through execution of the current fiscal year work plan. (d)3: City Council Focus Area Status
Report: Growing our Economy
Community and Economic Development Committee
June 15, 2026
City of San José
City Manager’s Office
Jen Baker, Director, Office of Economic Development and Cultural Affairs Blage Zelalich, Deputy Director, Office of Economic Development and Cultural Affairs Erica Garaffo, Assistant to the City Manager, Office of Economic Development and Cultural Affairs