Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of July 25, 2023
Title
ECONOMIC DEVELOPMENT STRATEGY PROGRESS REPORT
(Community Development Director Carrie Tai)
Body
Recommended Action:
Recommendation
Staff recommends City Council:
1. Receive a staff presentation; and
2. Receive and file Economic Development Strategy Progress Report #2.
Body
Executive Summary:
The Economic Development Strategy was approved in 2022, with one of the action items being progress reports presented to the City Council biannually in January and July of each year. This is the second progress report required by the Economic Development Strategy. The last update was presented to City Council at its January 24, 2023 meeting.
Background:
The Economic Development Strategy (Attachment 1) is the result of two years of collective efforts by the Economic Development Committee and the Stakeholders Advisory Working Group to identify Economic Development objectives and actions. For two years, the Economic Development Committee met monthly, and the 20-person Stakeholders Advisory Working Group met bimonthly, to explore and discuss Hermosa Beach business-related topics. An Economic and Market Study was also prepared to inform development of the Economic Development Strategy. At its July 12, 2022 meeting, City Council adopted the Economic Development Strategy.
The resulting Economic Development Strategy includes thirty strategic actions. These include proactive steps to enhance Hermosa Beach through beautification, strengthen the local economy, and provide an environment for the City’s business partners to succeed as they serve the community. The City Council approval included ten priorities for implementation in the first year ending June 30, 2023. A list of Economic Development Strategy First-Year Implementation Priorities is included as Attachment 2.
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 actions are divided into five categories: Citywide Beautification; Downtown; Municipal Code Amendments; Business Outreach; and City Economic Development work program. The Economic Development Strategy is the work plan for implementation, beginning with the identified action priorities.
Implementation work is to be completed by staff, the Hermosa Beach Chamber of Commerce and Visitors Bureau, and occasionally with contracted subject matter expert assistance as described in 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 City Council and the community are updated on Economic Development Strategy implementation and that priorities are identified each year.
Past City Council, Commission, and Economic Development Committee Actions
|
Meeting Date |
Description |
|
March 4, 2020 |
A joint meeting of the City Council and Planning Commission was held to discuss a vision for the Downtown District, among other topics. At that meeting, it was suggested that a subcommittee be formed, comprised of two City Councilmembers and two Planning Commissioners to focus on Economic Development. |
|
June 1, 2020 |
Economic Development Committee held its first monthly meeting to begin work on short-term economic recovery goals and long-term Economic Development goals to benefit the Downtown and citywide business districts. At the first meeting, the Economic Development Committee determined that a Stakeholders Advisory Group should be formed to represent a variety of businesses and commercial districts. |
|
September 28, 2021 |
City Council received a One-Year Progress Report on the Economic Development Committee and Economic Development Strategy initial actions approved. |
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May 2, 2022 |
Economic Development Committee held its final meeting, during which it approved the Economic Development Strategy. |
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July 12, 2022 |
City Council adopted Economic Development Strategy and First Year Implementation Priorities. |
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January 24, 2023 |
City Council received first progress report. |
Analysis:
The second progress report focuses on the ten priorities for implementation in the first year ending June 30, 2023. The first-year ten-priority strategic actions and progress are summarized below, including actions in all five categories.
|
First Year Implementation Priorities and Status |
|
Strategic Action |
Progress Update |
|
#1 Wayfinding Signs |
In May of 2022, the City issued an encroachment permit to the HB Chamber of Commerce and assisted in the installation and replacement of 40 removable floor decals on City sidewalks in the downtown area. The decals contain a QR code directing the public to the Truly Hermosa website which provides information regarding restaurants, shops, hotels, events, directional information, parking and encourages alternate transportation options. Through CIP 111, staff is working with a designer to assess potential wayfinding sign locations, placement, and develop preliminary designs. As part of this preliminary effort, the designer will identify future cost estimates for final design, fabrication, and installation, which will require additional funding. |
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#9 Work with Business Community to Explore Formation of a Downtown Business Improvement District (BID). |
On May 3, 2023, the City and Chamber of Commerce coordinated a BID meeting, assisted by Civitas, a firm specializing in assisting in BID formation. The Chamber of Commerce is coordinating business and property-owner interest as a result of the informational meeting. |
|
#10 Focused Update of Downtown Revitalization Strategy, including Preservation of Downtown Retail and Restaurants and Other Active Uses on 1st Floor. |
The City adopted the Downtown Core Revitalization Strategy on February 24, 2015. This Strategy, prepared by the ROMA group, details conditions of the Downtown Core while making suggestions for improvement. This document is largely relevant but must be updated to reflect changes in the downtown over the past eight years. This effort has not yet begun. |
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#11 Develop Identity/Vision for the Downtown (Objective: Incorporate City brand with marketing and future improvements). |
In March 2023, the City formalized 37 street pole banner locations on Pier Avenue and Hermosa Avenue through an encroachment agreement with the Chamber of Commerce. The City also approved an agreement to authorize the Chamber of Commerce to sell items bearing the City logo to promote the Hermosa Beach brand and to generate revenue to support tourism activities. |
|
#12 Comprehensive Downtown Lighting Evaluation with Complete Photometric Study, Design and Installation |
The estimated project schedule for CIP 621 was amended to begin RFP development in May of 2024 through the adoption of the FY23-24 budget. Estimated completion of the evaluation is January 2025.This funding supports the preliminary design phase and additional funding will be necessary for final design and installation. |
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#14 Permanently Allow Outdoor Dining Areas and Lane Reconfigurations. |
The City Council approved the lane configuration on April 25, 2023. The City Council adopted Municipal Code changes and associated fees for temporary outdoor dining areas to expand outdoor dining on public property and public rights-of-ways. Specifications for outdoor dining areas in the on-street areas of the public rights-of-ways will be discussed in Summer 2023. |
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#15 Long-term Allowance of Outdoor Music in Business Locations |
The Community Development Department is assigned to work on evaluate and develop a program for this in conjunction with the Outdoor Dining Area program. This item remains pending. Businesses have temporarily been operating under the temporary COVID protocols, which were extended by the City Council. Staff expects to launch this effort by Fall 2023. |
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#17 Regular Communication with Key Property Owners to Encourage Reinvestment and Provide Support as Needed. |
In addition to responding to daily inquiries, the Community Development Department has held at least 10 meetings with existing or prospective property owners and representatives to discuss potential uses, improvements, new tenants, or possible conversion. During these meetings, staff describes a “road map” to desired direction. |
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#20 Shop Local Program |
A dedicated “Shop Hermosa” page was added to the City’s website. The page features five reasons to shop hermosa, recent shop hermosa initiatives, and marketing tips for local businesses. Staff created the hashtag #ShopHermosa for City and business use and launched a new Summer 2023 shop local social media campaign aimed at the City’s 23,000 followers. The City has participated and provided funding support for two Truly Hermosa Destination Guides produced by the Hermosa Beach Chamber of Commerce. The print and online guide provides business information for event organizers and attendees. |
#21 Provide Hermosa Beach Business Information to Event Promoters to Encourage Use of Local Vendors and Distribution to Participants. Community Resources has added the following language to the Special Events Policy Guide: “Event producers will be required to detail positive economic impacts as a result of the event in the Special Event Application. Event producers should encourage use of local businesses to event staff, participants, and spectators. The Hermosa Beach Chamber of Commerce and Visitor Bureau’s business directory is available at www.trulyhermosa.com <http://www.trulyhermosa.com>. Additionally, event producers should engage with local businesses to explore partnership, and promotional opportunities.”
|
Additionally, the Chamber of Commerce worked with the Community Resources Department to email all event producers to offer the services of the Chamber, which in turn, supports the local businesses. |
Significant progress has been made on eight of the ten strategic actions identified for first year implementation during the past fiscal year. Two items, #10 (Focused Update of Downtown Revitalization Strategy) and #15 (Long-term Allowance of Outdoor Music in Business Locations), did not make significant progress due to a staff retirement, staffing turnover in the Community Development Department, and critical mandated priorities like the Housing Element effort.
As a result of collaboration with community organizations such as the Chamber of Commerce and Leadership Hermosa, certain other items from the Economic Development Strategy also realized progress. Staff details those in the following table.
|
Progress Items Beyond the First Year Priority List |
|
Strategic Action |
Progress Update |
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#2 Beautification Program, including Gateway Entries and Corridors |
At its March 28, 2023 meeting, City Council approved an agreement to allow the Hermosa Beach Chamber of Commerce to manage an annual street pole banner program. The seasonal banners provide the desired street view enhancements, create a sense of pride and City image on Pier Avenue and Hermosa Avenue corridors. Select banners feature and publicize community events to encourage tourism. The City is currently working with Skechers to design and install a gateway sign at 30th Street and Pacific Coast Highway (PCH) identifying the entrance to Hermosa Beach from the north on PCH. The monument sign will feature the City’s new logo and adheres to the branding and style guidelines. The sign design is expected to inform the sign program along the City’s major corridors from the south and east. |
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#4 Beautification Awards |
At the State of the City Address event held October 27, 2022, the Mayor recognized the Sea Sprite for renovation and upgrades. |
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#6 Include Beautification-Related Projects in the City Budget and CIP to Add Value and for Residents and Visitors to Enjoy. |
The City and South Bay Parkland Conservancy worked diligently to support the Leadership Hermosa class project “Hermosa Mariposa,” a native butterfly habitat restoration project on the Greenbelt. This project improves the appearance of the public space to enhance community quality of life and City image and attract visitors. |
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#23 Partnership with Chamber of Commerce to Enhance Visitors Bureau to Develop And Promote the Hermosa Beach Brand and Provide Visitor Resources |
The City approved an agreement with the Hermosa Beach Chamber of Commerce to authorize the sale of souvenirs and decorative items bearing the City logo to promote the Hermosa Beach brand and to generate revenue to support tourism activities. |
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#29 Continue Staff Member Assigned as Business Liaison. |
With the recent retirement of the former Business Liaison, the City will reassign the duties to an existing team member to ensure continued support and timely responses and referrals. |
Second Year Priority Items
The January 24, 2023 Progress Report mentioned that the City Council would consider second year priority items. The Economic Development Strategy identified three priority/timeline categories for Strategic Action items-A (1st Year); B (2-3 Years) and C (Over 3 Years). However, there were no items identified in category three. The unfinished items from Year 1, plus all other Category B items, exceed the forecasted staff workload capacity for Year Two. Staff has extracted the following items for potential consideration as Year 2 items:
|
Potential Second Year Priority Items |
|
Item |
Strategic Action |
Objective |
Performance Measures |
|
#6 |
Include Beautification-Related Projects in the City Budget and CIP to Add Value and for Residents and Visitors to Enjoy. Investment in the Public Realm Improves Community Quality of Life and Welcomes Visitors. |
Improve public area appearance to enhance community quality of life and City image and attract visitors. |
Results in increased commercial and residential property values and community pride, increased hotel occupancies, City Transient Occupancy Taxes, and sales tax collection. |
|
#10 |
Focused Update of Downtown Revitalization Strategy, including Preservation of Downtown Retail and Restaurants and other active uses on 1st floor |
Review document to determine what needs to be completed or added. Economic market study completed in 2021 can inform updated Downtown Revitalization Strategy. |
An updated strategy that aligns with emerging trends that sets the stage for a sustainable and vibrant economic future. Add incentives for active uses on 1st floor in Downtown with new Zoning Code. Will need contract subject matter expert assistance after RFP and selection. |
|
#15 |
Long-term Allowance of Outdoor Music in Business Locations |
Allow temporary outdoor music to become permanent to attract customers, add vitality and provide unique Hermosa Beach atmosphere. |
Amend Title 17 (Zoning). Include with permanently allowed Outdoor Dining |
|
#16 |
Program to Allow Outdoor Music in Public Spaces |
Add vibrancy and sense of place to enhance Downtown. |
Develop program with designated spaces and hours for scheduled musicians. Municipal code amendments (Title 12 Streets, Sidewalks and Public Places). |
|
#18 |
Develop Business Visitation Program. |
Build relationships with businesses, understand and better meet needs. |
Schedule regular visits to a variety of businesses such as large employers, sales tax generators, high-visibility businesses. LAEDC can supplement City efforts with business check-in calls. 6-10 visits per year. |
|
#19 |
Annual Commercial Property Owner and Brokers Forum |
Create opportunity to communicate with property owners and brokers to share project updates, City updates and real estate trends. |
Recognize roles of property owners, brokers and City to strengthen communications and relationships through annual meeting. |
|
#22 |
Retail Attraction Program for Competitive, Strengthened Retail |
Help recruit new businesses to reduce vacancies, increase foot traffic and strengthen local economy. |
Identify vacancies, communicate with property owners, help recruit businesses, to reduce vacancies, increase property values and maintain and increase sales tax revenue. |
|
#23 |
Partnership with Chamber of Commerce to Enhance Visitors Bureau to Develop and Promote the Hermosa Beach Brand and Provide Visitor Resources |
Promote Hermosa Beach as an overnight destination. |
Increase overnight visitors to support businesses year-round, increase hotel occupancy and City transient occupancy taxes. Visitors support local businesses that residents also enjoy and strengthen the local economy. |
|
#24 |
Periodic Community Survey to Determine What Types of Shops or Goods Are Desired and Residents to Drive out of Town to Patronize |
Survey information to identify gaps in services or goods provided for business attraction. Survey information is helpful tool in business recruitment since community seeks certain types of business and shows market demand. |
Biennial survey to inform existing businesses of market needs and to help attract new businesses to reduce vacancies. |
|
#25 |
Explore Music Events and Activities to Celebrate Hermosa Beach Music History and Provide Musical Experiences for Community and Visitors. |
Celebrate unique local musical heritage for community pride and to distinguish Hermosa Beach to visitors. |
Incorporate musical history into events and create new events. Events in non-summer season could attract visitors in the non-peak summer season and increase sales tax, increase hotel occupancy rates and TOT collections and strengthen local economy and Hermosa Beach brand. |
|
#26 |
Development Assistance Committee/ Development Review Committee |
Provide early feedback/ information to developers |
Formalize and promote pre-development meeting process. Early information establishes relationships and reduces development processing time. |
|
#27 |
Provide Customer Service Training to All City Staff to Build on Culture of Excellent Customer Service. |
Provide highest quality service to residents and businesses. |
Provide comprehensive customer service training with periodic updates. Include customer service consideration for job candidates. Build on shared City culture of excellent customer service by all employees. |
Responsible Staff and Resources
The Economic Development Strategy identified a multi-disciplinary complement of City Departments (City Manager’s Office, Community Development, Public Works, Community Resources, Police Department, and Human Resources), the Chamber of Commerce, and professional subject matter experts. The Economic Development Strategy also indicates that the prioritization and scope of the Strategic Actions does not consider staff capacity or competing workload demands. As such, staff ability to steadily implement the strategy items is determined by available capacity. Staff capacity for the development of the Economic Development Strategy was, in part, made possible by the extended allowable hours of the Interim Senior Planner during the COVID-19 pandemic response. Once the COVID-19 response ended, the allowable hours returned to only accommodate daily workload such as long-range planning projects, customer service, and a limited business liaison role.
Staff researched potential solutions to structure the implementation. One potential solution is to secure an outside economic development specialist to serve as the project manager for Economic Development Strategy. This could be a limited-term individual or firm, potentially funded through a cost share between the City and the business community. If City Council were interested in pursuing such a solution, staff could return in the future with options.
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 citywide 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.
Attachments:
1. Economic Development Strategy
2. Economic Development Strategy First Year Implementation Priorities
3. Economic and Market Study Update by Economic and Planning Systems, Inc.
4. Downtown Core Revitalization Strategy (2015)
5. Link to March 4, 2020 City Council Staff Report
6. Link to April 21, 2020 Planning Commission Staff Report
7. Link to April 28, 2020 City Council Staff Report
8. Link to June 1, 2020 Economic Development Subcommittee Staff Report
9. Link to September 28, 2021 City Council Staff Report
10. Link to May 2, 2022 Economic Development Subcommittee Staff Report
11. Link to July 12, 2022 City Council Staff Report
12. Link to January 24, 2023 City Council Staff Report
Respectfully Submitted by: Carrie Tai, Community Development Director
Concur: Angela Crespi, Deputy City Manager
Noted for Fiscal Impact: Viki Copeland, Finance Director
Approved: Suja Lowenthal, City Manager