City of Hermosa Beach - File #: REPORT 24-0092

File #:

REPORT 24-0092 Version: 1

Name:

Type:

Action Item

Status:

Municipal Matter

File created:

2/19/2024

In control:

City Council

On agenda:

2/27/2024

Final action:

Title:

ECONOMIC DEVELOPMENT STRATEGY PROGRESS REPORT (Community Development Director Carrie Tai)

Attachments:

1. Economic Development Strategy, 2. Economic and Market Study Update by Economic and Planning Systems, Inc., 3. Downtown Core Revitalization Strategy (2015), 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, 11. Link to January 24, 2023 City Council Staff Report, 12. Link to July 25, 2023 City Council Staff Report, 13. SUPPLEMENTAL ED Strategy Costs_Preliminary In Process, 14. SUPPLEMENTAL Lighting and Signage Project ROM Costs, 15. SUPPLEMENTAL ecomments for item 14d.pdf, 16. SUPPLEMENTAL email from Laura Pena for item 14d, 17. SUPPLEMENTAL PowerPoint

Staff Report Text

Honorable Mayor and Members of the Hermosa Beach City Council

Regular Meeting of February 27, 2024

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 #3.

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 third progress report on the Economic Development Strategy. The last update was presented to City Council at its July 25, 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.

The Economic Development Strategy is a long-term plan, with strategic actions divided into short-term (1^st 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.

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. Implementation work was anticipated to be completed by staff, the Hermosa Beach Chamber of Commerce, and occasionally with contracted subject matter expert assistance.

The Economic Development Strategy also indicates that the prioritization and scope of the Strategic Actions do not consider staff capacity or competing workload demands. Staff ability to 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 emergency ended, the allowable hours returned to only accommodate daily workload such as long-range planning projects, customer service, and a limited business liaison role.

The Economic Development Strategy includes an action item to report to the City Council twice annually to monitor progress, prioritize actions, and consider new opportunities. The following biannual report ensures City Council and the community are updated on Economic Development Strategy implementation and that priorities are identified each year.

At its July 25, 2023 meeting, City Council received Progress Report #2. The staff report indicated that while the Economic Development Strategy actions were to be divided into three years, all action items were listed as being completed within Years 1 and 2, with none in Year 3. Staff also indicated that the unfinished items from Year 1, plus partially-completed items from Year 2, exceed the forecasted staff workload capacity. City Council received and filed the progress report.

Analysis:

Since the second progress report in July 2023, staff evaluated all strategic action items of the Economic Development Strategy Report, as well as ongoing initiatives not identified in the Economic Development Strategy initially adopted in 2022. Staff observed numerous initiatives that further the City’s efforts in supporting the business community in improving the environment in which to do business.

This third progress report incorporates all action items from the past one and a half years and presents the entire Economic Development Strategy in a comprehensive way. This allows the community, City Council, and staff to focus on this effort in totality. The action items are presented in the following table in numerical order as identified in the Economic Development Strategy. The letter symbol (S, M, L) indicates whether the action item was to be initiated in the short-term (Year 1), mid-term (Year 2-3), or long-term (Year 3+). The table identifies prior actions and provides current updates. The table also identifies initiatives that do not currently have staff and funding resources.

Staff researched potential solutions to structure further Economic Development Strategy 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.

As demonstrated in the action items above, the City’s variety of programs support economic development and the business community in a myriad of ways. From supporting events that draw visitors to the City, beach, and downtown to policy changes that assist property owners in more flexible and efficient development, the City continues to implement the action items of the Economic Development Strategy as much as staffing and funding resources allow.

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.