Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of January 24, 2023
Title
ECONOMIC DEVELOPMENT STRATEGY PROGRESS REPORT
(Interim Community Development Director Corrie Kates)
Body
Recommended Action:
Recommendation
Staff recommends City Council:
1. Receive a staff presentation;
2. Provide staff direction regarding first year and possible second year priorities to inform the upcoming Fiscal Year 2022-2023 mid-year budget review and Fiscal Year 2023-2024 budget development process; and
3. Receive and file Economic Development Strategy Progress Report.
Body
Executive Summary:
At its July 12, 2022 meeting, City Council adopted the Economic Development Strategy (Attachment 1) as recommended by the Economic Development Committee. The adopted strategy includes an action to report to the City Council twice annually to monitor progress, prioritize actions, and consider new opportunities. This bi-annual report ensures that Council and community are updated on Economic Development Strategy implementation. This is the first progress report presented to the City Council since the development of the strategy and will recur in January and July of each year.
Background:
At its April 28, 2020 meeting, City Council approved the creation of the Economic Development Committee (EDC) with a two-year sunset date. Once formed, the earliest actions of the committee were to form an Economic Development Stakeholders Advisory Working Group, comprised of business representatives and commercial property owners, and to discuss urgent matters related to the pandemic. Soon after, the EDC directed development of an Economic Development Strategy as specified in the Governance Element of PLAN Hermosa.
Staff commissioned an Economic and Market Study Update (Attachment 3) to inform the EDC and Stakeholders Advisory Working Group in preparation of the Economic Development Strategy. At its July 12, 2022 meeting, City Council adopted the Economic Development Strategy (Attachment 1), which includes 30 strategic actions. The actions include steps to enhance and strengthen the local economy through beautification; code changes; and other pro-active steps to encourage success and help the City’s business partners as they serve and enhance the quality of life in the community.
Discussion:
The Economic Development Strategy is a long-term plan, with strategic actions divided into short-term (1st year), mid-term (2-3 years), or long-term (3+ years) implementation. The Economic Development Committee and the Stakeholders Advisory Working Group identified 30 strategic actions in the Economic Development Strategy, including 10 priorities for implementation in the first year. The strategic actions are divided into five categories: Citywide Beautification; Downtown; Municipal Code Amendments; Business Outreach; and City Economic Development work program. A list of Economic Development Strategy First-Year Implementation Priorities is included as Attachment 2.
City staff and the Hermosa Beach Chamber of Commerce and Visitors Bureau are responsible for implementation work, occasionally with consultant assistance as described the Economic Development Strategy. The Economic Development Strategy includes an action to report to the City Council twice annually to monitor progress, prioritize actions, and consider new opportunities. This biannual report ensures that the Council and community are updated on Economic Development Strategy implementation and that priorities are identified each year. This is the first progress report to the City Council.
The following table includes the ten priority first year strategic actions and progress updates, including actions in all five categories:
Additionally, although it was not identified as a priority for first-year implementation, then-Mayor Detoy chose to include Beautification Awards with the Hermosa Beach State of the City event, recognizing Sea Sprite Hotel for its renovation and upgrades in 2022.
Progress has been made on eight of the ten strategic actions identified for first year implementation in the first half of the fiscal year. Ongoing implementation of the strategic actions requires funding and staff resources. Foreseeing no new general fund revenue in the near-term, staff requests City Council feedback or direction regarding first-year and possible second-year priorities. Staff will report on the progress underway at the next scheduled progress report to City Council in July 2023. Waiting until the July progress report would miss the opportunity to inform the upcoming Fiscal Year 2022-2023 mid-year budget review at the end of February and Fiscal Year 2023-2024 budget development process.
General Plan Consistency:
PLAN Hermosa, the City’s General Plan, was adopted by the City Council in August 2017. The Economic Development Strategy supports several PLAN Hermosa goals and policies listed below.
Governance Element
Goal 6. A broad-based and long-term economic development strategy for Hermosa Beach that supports existing businesses while attracting new business and tourism.
Policies:
• 6.1 Long-term economic development. Support the development and implementation of long-term economic development strategies that seek to establish and keep new businesses and a strong middle class in Hermosa Beach over the decades to come.
• 6.2 Regional presence. Encourage economic development strategies that will make Hermosa Beach a driving force and jobs center behind the regional economy of the South Bay region.
• 6.3 Diversified economy. Encourage economic development strategies that allow the City to move beyond reliance on its two main industries - accommodation and food service and retail trade - and transform itself to a mature mix of economic activity and job opportunities.
• 6.4 Business support. Support the Chamber of Commerce, retailers, tourist service businesses, artists, and other agencies to develop an aggressive marketing strategy with implementation procedures.
• 6.5 Creative economy. Prioritize strategies that will create an economy full of diverse talents, trades and goods for the City. For long lasting economic success, a range of services, arts, entertainment and retail should be supported on all scales of the City’s economy.
• 6.6 Pop-up shops. Develop plans and programs for underutilized spaces, such as vacant buildings, utility corridors, parkways, etc., for temporary retail, restaurant, and community promoting uses.
• 6.7 Retail base. Encourage economic development reflective of the character of Hermosa Beach with small and medium scale retail development within Hermosa Beach in order to create a stronger tax base and increase the City’s tax revenue.
Land Use Element
Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents.
Policies:
• 1.1 Diverse and distributed land use patterns. Strive to maintain the fundamental pattern of existing land uses, preserving residential neighborhoods, while providing for enhancement of corridors and districts in order to improve community activity and identity.
• 1.4 Diverse commercial areas. Promote the development of diversified and unique commercial districts with locally owned businesses and job- or revenue-generating uses.
• 1.5 Balance resident and visitor needs. Ensure land uses and businesses provide for the needs of residents as well as visitors.
• 1.8 Respond to unique characteristics. Enhance the unique character and identity of the City’s neighborhoods, districts and corridors through land use and design decisions. Allow policies and programs to be focused on each unique character area of the City.
Goal 3. A series of unique, destination-oriented districts throughout Hermosa Beach.
Policies:
• 3.1 Unique districts. Encourage the development of local and city-wide districts and centers that address different community needs and market sectors and complement surrounding neighborhoods.
• 3.3 Diverse retail and office centers. Provide incentives to transform existing single-use commercial properties that are accessible into retail destinations by adding a diversity of uses, providing new pedestrian connections to adjacent residential areas, reducing the visual prominence of parking lots, making the centers more pedestrian-friendly and enhancing the definitions and character of street frontage and associated streetscapes.
• 3.4 Emerging employment sectors. Strive to create districts that support increased employment activity, particularly for growing or emerging economic sectors.
• 3.5 Compact office formats. New employment uses should be designed in a compact format with minimal front setbacks from the street, typical lease spans of 40 feet or less, and where feasible, combined with other commercial uses.
Fiscal Impact:
There is no fiscal impact associated with recommended action to receive and file the Economic Development Strategy progress report. The Fiscal Year 2022-2023 budget includes approximately $230,000 to support two of the first-year priorities with additional funding needs possibly for full implementation. Any costs associated with ongoing implementation would be included in the annual budget adoption process, should Council direct. Implementation of the Economic Development Strategy has the potential to increase City revenues and strengthen the local economy, especially when balanced with maintaining and improving all areas of municipal services.
Attachments:
1. Economic Development Strategy
2. Economic Development Strategy First Year Implementation Priorities
3. Economic and Market Study Update
4. Link to March 4, 2020 City Council and Planning Commission Joint Meeting Agenda
5. Link to April 21, 2020 Planning Commission Agenda
6. Link to April 28, 2020 City Council Staff Report
7. Link to June 1, 2020 Economic Development Committee Staff Report
8. Link to September 28, 2021 City Council Staff Report
9. Link to May 2, 2022 Economic Development Committee Staff Report
10. Link to July 12, 2022 City Council Staff Report
Respectfully Submitted by: Christy Teague, Senior Planner and Business Liaison
Concur: Corrie Kates, Interim Community Development Director
Noted for Fiscal Impact: Viki Copeland, Finance Director
Approved: Suja Lowenthal, City Manager