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STOCKTON ECONOMIC DEVELOPMENT STRATEGIC PLAN UPDATE
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RECOMMENDATION
Information only. No Council action is required.
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DISCUSSION
Background
In February 2015, the Stockton City Council adopted a comprehensive Economic Development Strategic Plan (see Attachment A). The purpose of the Strategic Plan is to provide a five-year road map for the City in determining where to allocate resources and identify priorities. The Strategic Plan includes specific action items geared towards creating new job opportunities, encouraging entrepreneurship and innovation, enhancing fiscal sustainability, and increasing private investment throughout the community. The goal is to establish a more collaborative approach to economic development throughout the City by partnering with both internal and external stakeholders.
The Strategic Plan is broken down into three Strategic Initiatives:
o Core Economic Development - programs directly focused on business retention/attraction/expansion, entrepreneurial development, and related education/workforce development initiatives.
o Quality of Life - initiatives focused on improving Stockton’s overall attractiveness to residents, visitors, businesses, and employees.
o Foundational - initiatives addressing public safety and Stockton’s physical capacity for new development and investment.
A total of 67 action items are included in the Strategic Plan and a recommended priority level was identified based on input from stakeholder participants, City staff, and City Council.
Present Situation
The Strategic Plan has been in place for two years and much has been accomplished since its adoption. On the following page is a summary of accomplishments during the past two years broken down by strategic initiative.
Core Economic Development Initiatives
• Participated in national trade shows, such as International Council of Shopping Centers, Logistics Development, Pack West Expo, Medical Design & Manufacturing, Food Processing Expo
• Conducted 55 Economic Review Committee meetings with prospective developers and businesses
• Facilitated the location/expansion of 57 businesses resulting in approximately 2,400 new/retained jobs
• Held a business walk along the Miracle Mile and visited 43 small businesses
• Awarded $111,000 in entrepreneurship grants
• Created new incentives to stimulate economic development, including the Office & Industrial Sales Tax Incentive and Downtown Infill Infrastructure Program.
• Hosted the iHub Entrepreneur Leadership event featuring Jose Benitez Cong, former talent development for Apple, Nest & Google
• Marketed Stockton through trade publications, social media & e-newsletters
Quality of Life Initiatives
• Allocated $5.2 million in redevelopment bond proceeds toward capital improvements along Harding Way, Wilson Way, Oak Park Ice Arena, and University Park
• Funded 7 facade improvement projects; the City contributed $385,500 in forgivable loans and Property Owners contributed $163,400
• Approved 3 micro loans totaling $78,000 which resulted in 50 new jobs
• Approved ENRAs for two Airport Way City-owned properties for development
• Approved Master Development Plan, Development Agreement, and property Options Agreements for the Open Window Project
• Approved Lien Forgiveness agreements for 2 downtown properties
• Participated in City’s Neighborhood Community Resource Fair
• Approved 15 single-family housing rehab loans
• Approved 8 single-family new construction loans (Habitat for Humanity)
• Provided financing to 4 affordable housing projects resulting in 124 units
• Participated in Visit Stockton’s brand development - Stocked Full of Flavor
Foundational Initiatives
• Re-launched a newly revamped Advantage Stockton website
• Community Development launched new online permitting application
• Participating in the 2035 General Plan Update
• Coordinating with Stockton PD in producing monthly crime prevention articles for inclusion in ED’s Small Business e-newsletter
• Participating in Neighborhood Services community outreach efforts
• Community Development established an express permitting program for minor residential and commercial TI’s
• Coordinating with the Port of Stockton and City Departments on improvements to Navy Drive
In addition to the accomplishments mentioned above, the Economic Development Department has been working with a consultant, RSG, in conducting a feasibility analysis of recent legislation that established new “redevelopment” tools, specifically Enhanced Infrastructure Financing Districts (EIFD) and the Community Revitalization Investment Authority (CRIA). EIFDs and CRIAs are smaller versions of tax increment financing districts that were utilized in Stockton and throughout California prior to dissolution of redevelopment in 2012. In general, both of these tools share the following key traits:
• Tax increment financing may be created by consenting cities, counties and/or special districts only. School agencies, such as school districts and community colleges, are prevented from participating by law.
• Property taxes are prioritized each year to first meet a redevelopment successor’s agency’s enforceable obligations before any tax increment revenue can be available to an EIFD or CRIA.
• The formation process generally entails an agency consenting to participate, preparation of a financing plan, and a minimum of one public hearing.
• Tax increment revenues may be used to fund capital projects, including land acquisition in some cases, but may not be used on maintenance, operations, or municipal services.
• Although it’s not a body of the local government, participating agencies have most of the seats on the governing body and must appoint at least two public members.
There are some differences between an EIFD and CRIA as well. Specifically, the former are largely an infrastructure financing tool which in theory may be used to fund improvements anywhere, even outside their boundaries, while CRIAs are intended to benefit blighted or disadvantaged communities with not only tax increment but affordable housing and other community development tools. Several geographic areas of Stockton were studied and the complete report on the findings of the feasibility analysis conducted by RSG is included as Attachment B.
The report provides a good method in evaluating the opportunities and potential funding streams that might exist with these new tools, but here are a couple of items to keep in mind in moving forward:
1) Without any other entity participating the revenue that we are discussing is not new revenue, but restricting our own City General Fund revenue growth to reinvest in a specific way
2) There are formation costs (around $500,000) and ongoing operational costs ($100,000-$200,000)
3) Governing structure creates an additional bureaucratic layer
4) Voter approval of bonds (EIFD) and mandatory set aside requirements (CRIA)
Going forward, staff has identified below some work plan actions for 2017:
• Complete Food & Ag Action Plan
• Explore creation of a Residential Lien Forgiveness Program
• Formalize Business Retention Program
• Update the Stockton Community Profile
• Issue NOFA for Entrepreneurship Grants
• Coordinate with SJ Partnership, Port of Stockton, and other ED partners to assist with business attraction, cluster mapping of existing industries, and foreign direct investment
• Utilize CoStar and Advantage Stockton to develop business leads
• Research and implement new incentives to support business development and entrepreneurship
• Seek proposals for the potential development of downtown City-owned property
• Seek proposals for the build out and occupancy of the Arena Garage
• Complete comprehensive Downtown Parking Strategy
Attachment A - Economic Development Strategic Plan (Feb 2015)
Attachment B - CRIA/EIFD Feasibility Analysis