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Economic Development Strategy 2014 – 2016 Blank The City of San Diego Economic Development Strategy 2014 - 2016 IFC Project Team Pamela Cabanillas Bill Fulton Alissa Gabriel Amy Gowan Lydia Moreno Tom Tomlinson Project Contributors Dominika Bukalova Efrem Bycer Jacques Chirazi Jim Davies Meredith Dibden-Brown Toni Dillon David Graham Matthew Helm John Hsu Jeff Kawar Daphne Skogen Elizabeth Studebaker Sima Thakkar Almis Udrys (Photo courtesy of San Diego Unified Port District) Ron Villa Mayor Acknowledgements Kevin L. Faulconer Adams Avenue Business Association City Council Civic San Diego District 1, Council President Pro Tem Sherri Lightner CleanTECH San Diego District 2, Councilmember Edward Harris CONNECT District 3, Council President Todd Gloria John Stump, Attorney at Law District 4, Councilmember Myrtle Cole National University Institute for Policy Research District 5, Councilmember Mark Kersey Otay Mesa Chamber of Commerce District 6, Councilmember Lorie Zapf The Maritime Alliance District 7, Councilmember Scott Sherman San Diego County Hotel-Motel Association District 8, Councilmember David Alvarez San Diego County Regional Airport Authority District 9, Councilmember Marti Emerald San Diego Regional Chamber of Commerce City Attorney San Diego Regional Jan Goldsmith Economic Development Corporation Project Manager San Diego Taxpayers Association Russ Gibbon South County Economic Development Council I Economic Development Strategy 2014 – 2016 Blank [This page intentionally left blank] II Economic Development Strategy 2014 – 2016 Economic Development Strategy 2014 - 2016 Adopted by the: Council of the City of San Diego June 24, 2014 Resolution Number: R-309088 III5 Economic Development Strategy 2014 – 2016 Blank [This page intentionally left blank] IV Economic Development Strategy 2014 – 2016 Table of Contents Executive Summary 1 1 Introduction 5 2 Mission, Strategic Objectives, and Performance Measures 7 3 The San Diego Economy 19 4 San Diego’s Economic Base Sectors 23 4-1 Manufacturing & Innovation 4-2 International Trade & Logistics 4-3 Military 4-4 Tourism 5 San Diego’s Neighborhood Businesses 37 6 Efforts to Support Economic Development 39 6-1 City Services & Operations 6-2 Workforce Development & Education 6-3 City Relationships with External Organizations Appendix A: Base Sector Economic Engines 45 Military Tourism Manufacturing Biotech & Medical Devices Cleantech Aerospace & Defense Electronics & Telecommunications Food & Beverages International Trade & Logistics Other Base Sector Industry Clusters and Business Establishments Appendix B: Community Investment & Revitalization 65 V Economic Development Strategy 2014 – 2016 Table of Contents Appendix C: Fiscal Impacts by Land Use 69 Appendix D: Internal Operational Guidance & Coordination 73 Appendix E: Workforce Development & Education 79 Appendix F: Economic Development Programs & Incentives 81 Business & Industry Incentive Program Business Cooperation Program Guaranteed Water for Industry Program Governor’s Economic Development Initiative (GEDI) Foreign-Trade Zone Program Business Finance Program Economic Development & Tourism Support Program Tourism Marketing District Business Improvement Districts Small Business Enhancement Program Storefront Improvement Program Community Parking District Program Small Local Business Enterprise Program Appendix G: List of Available Industrial Properties 87 Appendix H: San Diego Metropolitan Export Initiative 89 Appendix I: General Plan Policies which Support the Economic Development Strategy 91 VI Economic Development Strategy 2014 – 2016 Executive Summary This Economic Development Strategy lays the foundation for sustained economic recovery and fiscal stability for the City of San Diego. San Diego’s economic base has evolved from a dependence on the military and tourism to a focus on high-technology manufacturing and international trade. The City’s highly skilled labor force, pleasant Mediterranean climate, and unique proximity to Mexico and the Pacific Rim provide comparative advantages for established businesses and those considering relocation to San Diego. This Economic Development Strategy lays out a Mission Statement, Strategic Objectives, and a set of Economic Indicators that will help the City track progress annually. It also lays out specific Tactical Objectives and Actions for four base sectors, a neighborhood business strategy, and other economic development efforts. Economic Development Mission The City’s Economic Development Mission is: To create a wide spectrum of job opportunities for San Diego residents by expanding the City’s economic base and increasing local economic activity, and to generate new tax revenues for essential public services by expanding the City’s tax base. Strategic Objectives The City’s Economic Development Mission can be translated into three Strategic Objectives. #1: Economic Base Growth Attract, retain, and expand businesses in the City’s four economic base sectors: manufacturing & innovation; international trade & logistics; military; and tourism. Focusing especially on emerging sectors such as Cleantech & Energy Efficiency and the Food & Beverage industry clusters. #2: Middle-Income Jobs Increase the number of middle-income jobs, especially in economic base sectors. #3: Neighborhood Businesses Increase the amount of neighborhood business activity, especially in underserved neighborhoods. 1 Economic Development Strategy 2014 – 2016 Economic Indicators Progress toward the goals of this Economic Development Strategy can be tracked through the use of seven relevant economic indicators. 1. Increase the Gross Regional Product (GRP) of the San Diego Region 2. Increase the percentage of the workforce earning middle-wage incomes 3. Decrease the rate of local unemployment 4. Increase the local median income 5. Decrease the percentage of people living in poverty 6. Increase General Fund tax revenues as a percentage of GRP 7. Increase business activity in the City’s neighborhood business districts Economic Base Sectors This Economic Development Strategy makes reference to San Diego’s four economic base sectors (interchangeably referred to as “traded economies”) and lays out Tactical Objectives and Actions for these sectors. Economic base sectors are groups of industries that produce goods and/or services that are sold outside the region. Unlike local businesses, which serve local customers but do not increase the region’s overall economy, economic base industries create the foundation of jobs and wealth for the entire region, bringing money in from the outside that circulates again and again within San Diego to boost the economy. San Diego’s four economic base sectors are: 1. Manufacturing & Innovation 2. International Trade & Logistics 3. Military 4. Tourism This Economic Development Strategy lays out Tactical Objectives and Actions for each of these four base sectors that, if achieved, will help San Diego make progress toward fulfillment of the three Strategic Objectives and the seven Economic Indicators. 2 Economic Development Strategy 2014 – 2016 Neighborhood Business Districts This Economic Development Strategy also calls out the importance of nurturing small, locally owned neighborhood businesses, especially those in older neighborhood business districts with an emphasis on historically underserved neighborhoods. Focusing efforts on such businesses has two major benefits. First, in contrast to corporate chain retail stores, locally owned businesses retain money in the local economy to be recirculated. Second, the success of such businesses, especially when concentrated in business districts, can serve to revitalize San Diego’s older neighborhoods, achieving many other goals in the process. This Economic Development Strategy also lays out Tactical Objectives and Actions for locally owned small businesses and neighborhood business districts. Economic Development Efforts This Economic Development Strategy identifies those areas of City activity that should be used to support economic development efforts. City services and operations Workforce development and education that is vital to meet the demands of a 21st century economy City relationships to external organizations, whose efforts must be coordinated with the City for maximum economic benefit This Economic Development Strategy provides Tactical Objectives and Actions for each of the economic development efforts. 3 Economic Development Strategy 2014 – 2016 Blank [This page intentionally left blank] 4 Economic Development Strategy 2014 – 2016 1. Introduction This Economic Development Strategy is intended Economic development success depends not only to guide the City of San Diego’s economic on these business-oriented programs, but also on development efforts for the next three years. In complementary efforts to provide public infrastructure, doing so, this strategy serves several purposes. affordable housing, education and workforce training, and a cost effective and predictable regulatory First, it is designed to inform local policymakers and framework. investors about the nature of the City’s economic base, specifically by describing the driving industries A successful economic development strategy focuses that form the basis for future economic prosperity. on growing the economic base (explained in Chapter 4), which is that segment of the economy that Second, it describes the City’s strengths and brings money into San Diego by exporting goods weaknesses as well as the City’s existing efforts and services to the rest of the nation and the world. through various programs and initiatives,
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