CITY OF SACRAMENTO ECONOMIC DEVELOPMENT STRATEGY

							                             CITY OF SACRAMENTO
                        ECONOMIC DEVELOPMENT STRATEGY

                        Local Agencies/Associations Focus Group
                                Tuesday, August 9, 2005
                                 10:00 a.m. to 12:00 p.m.
                        Sacramento Convention Center, Room 305


                                Meeting Summary – DRAFT

On the morning of August 9, 2005, the City of Sacramento’s Economic Development
Department hosted an Economic Development Strategy Focus Group at the Sacramento
Convention Center.

The participants included representatives from business improvement districts; local business
associations and chambers of commerce; the Sacramento Housing & Redevelopment Agency;
and the City’s Economic Development, Finance, and Planning departments.

A total of 36 attendees and project team members participated, including:
Connie Miottel, Capitol Station District
Danielle de l’Etoile, Deputy Director, Downtown Sacramento Partnership
Brian Holloway, President, East Sacramento Chamber of Commerce
Joe Chasko, President, Folsom Boulevard Business and Property Association
Heinz Ludke, Executive Director, Natomas Chamber of Commerce
Rebecca Garrison, Executive Director, Point West TMA
Becky Heieck, Executive Director, Power Inn Business & Transportation Association
Lisa Schmidt, East Sacramento Chamber of Commerce
Marta Basset, East Sacramento Chamber of Commerce
Ted Walker, Greater Broadway Partnership
Charline Speck, Director of Business Development, SACTO
Lisa Bates, Director, Community Development, SHRA
Leslie Fritzsche, SHRA
Jim Hare, Program manager, Community Development, SHRA
Chris Pahule, Planner/Project Manager, SHRA Redevelopment
Cynthia Shallit, Program Manager, Community Development, SHRA
Tom Friery, Treasurer, City of Sacramento
Lydia Abreu, Office of the Treasurer, City of Sacramento
Gus Vina, Director, Finance Department, City of Sacramento
Steve Peterson, Principal Planner, Long Range Planning, City of Sacramento
Wendy Saunders, Economic Development, City of Sacramento
Denise Malvetti, Economic Development, City of Sacramento
Traci Michel, Economic Development, City of Sacramento
Michelle Nelson, Economic Development, City of Sacramento
Ali Pezeshkpour, Economic Development, City of Sacramento
Katherine Robbins, Economic Development, City of Sacramento
Micah Runner, Economic Development, City of Sacramento
Laura Sainz, Economic Development, City of Sacramento
Melissa Valle, Economic Development, City of Sacramento
Tom Zeidner, Economic Development, City of Sacramento



H The Hoyt Company                                                                      Page 1
          Economic Development Strategy - Local Agencies/Associations Focus Group August 12, 2005

The consulting team included:
Jim Gollub, ICF Consulting
Egon Terplan, ICF Consulting
David Zehnder, Economic and Planning Systems
Isabel Domeyko, Economic and Planning Systems
Tim Youmans, Economic and Planning Systems
Peter Castles, The Hoyt Company

Wendy Saunders, Director of Economic Development, welcomed the participants, facilitated
introductions, explained the goals of the project, and outlined the Strategy update process.

Tim Youmans of Economic and Planning Systems then gave some background about the
existing Strategy and explained in further detail the goals of the Strategy update process. He
emphasized that the strategy update is primarily to provide the City’s economic development
department with a clear work plan for the next few years.

Jim Gollub of ICF Consulting then gave a presentation where he described ICF’s approach to
economic development and identified several principles which are essential to apply in
developing a competitive economy.

After the presentation, Mr. Gollub then led an extensive interactive exercise to help participants
identify and prioritize their principal economic development challenges. Each participant was
provided with a set of three index cards, on which they were to record their challenges in order
of priority. Then each participant was given an opportunity to present and discuss their primary
challenges with the group. Mr. Gollub directed the discussion while his colleague Egon Terplan
and EPS’ Isabel Domeyko clarified the comments and recorded the challenges onto a series of
flip charts organized by topic/issue area. To culminate the exercise, participants were given five
dot stickers each to place next to those challenges they considered most important or critical to
economic development. After reviewing the “votes” the ICF team described the top challenges
which emerged from the prioritization process. They are:

       Need Stronger Leadership and Political Will for Implementation of Plans and
       Strategies
       How to Establish a Common Understanding of and Clear Priorities in Economic
       Development
       How to Better Engage the Private Sector
       Need to Identify Self-financing Economic Development Projects
       Need to Improve Perception of City and Region

While the focus group did not discuss actions to resolve these priority challenges, it became
clear that Sacramento has a history of successful planning or strategy development, but falters
when it comes to effective implementation. These priority challenges with implementation
revealed the participants’ primary concern with issues of leadership, organization, and
participation. Fortunately, these are areas mostly controlled by factors within the city or region.

The full set of identified challenges are below. These are organized into economic foundation
categories:




H The Hoyt Company                                                                           Page 2
          Economic Development Strategy - Local Agencies/Associations Focus Group August 12, 2005

MARKETING AND STRATEGY

Need Stronger Leadership and Political Will for Implementation of Plans and Strategies:
How to ensure political will and leadership to follow-through on plans and commitments. How to
move from effective conceptual planning to successful implementation. Too often, short-term or
limited perspectives overwhelm the long-term (and often previously agreed-to) vision. Need to
be able to establish and implement a long-term plan. Plans are changing constantly, sometimes
due to market changes – sometimes due to political whims. There is often a lack of commitment
and willingness to take risk and spend resources on identified projects. The lack of leadership
limits the support for difficult decisions and elected officials too often look for compromises that
degrade the outcome. Need for more “offensive” economic development (instead of “defensive”
economic development). This also requires finding a common economic development vision
and story that community residents understand and support (see next challenge). Further, it is
often difficult to identify all the stakeholders (City, private, County, State) involved in economic
development projects which affects the lines of communication necessary to make projects
successful. Participants noted the Blueprint, General Plan, and City Strategic Plan as examples
of “plans” which have not been effectively implemented.

How to Establish a Common Understanding of and Clear Priorities in Economic
Development: How to establish a clear focus for economic development activities. There is a
difficulty in prioritizing and deciding where to focus among the many options. Participants asked
“Whom do we help?”. There also needs to be more targeted and strategic investment in order to
maximize limited dollars. Decision makers can become more strategic by understanding what is
achievable. People too often are looking for a “golden bullet” to solve economic woes. This
challenge was different from the first challenge because it was about identifying focus for
economic development, not about the leadership required to implement the focus.

How to Better Engage the Private Sector: Need to understand private-sector needs and
engage them more in economic development. Often, representatives from business are not at
the table. This includes both large and small companies. There was some discussion about
ensuring that businesses are able to work with the public sector and are not skeptical or fearful
of government. Participants noted that business leaders in Sacramento may not be as active as
in other regions due to the lack of corporate headquarters.

How to Develop Stronger Regional Collaboration and Reduce City/Suburb Conflicts:
Need for greater regional collaboration and a reduction of “turfism”. There is limited regional
leadership and too much competition for limited funds and opportunities. Often there is a district
mentality at governing levels (where people fail to see the big picture). Too many fights are
subsumed by the growth vs. no growth struggle. Additionally, political entities outside of the City
have their own agendas which often hurt the City. Surrounding cities do not always see the
value of financing a major project if it is located in the City of Sacramento (even if their residents
would benefit). Need to figure out how to ensure that the City of Sacramento does not continue
to lose economic opportunities to outer jurisdictions. This will require learning how to market
older neighborhoods relative to outlying green fields as well as working more collaboratively
across the region.

Influencers of the above challenges include
• SHRA, Other City departments
• City Council (Sacramento and surrounding cities)


H The Hoyt Company                                                                             Page 3
          Economic Development Strategy - Local Agencies/Associations Focus Group August 12, 2005
•   Private companies
•   SACTO
•   City Manager
•   Private developers
•   Media perceptions

PHYSICAL INFRASTRUCTURE

How to Reconcile Competing Transportation Uses: In several neighborhoods in
Sacramento, there is conflict between the regional transportation needs and specific concerns
of community residents. Often, the regional transportation need calls for development of a
transit line and new transit stations with the expectation that there will be significant
development in close proximity to the new transit station (‘transit oriented development”). Some
residents have opposed these efforts and have gotten the Council to change their support for
the transit station. This also reflects the lack of political will to follow-through with a plan. In
these cases, the City Council has gotten swayed by active few at the expense of the broader
community which needs the transit. The big challenge is going from the “page” to the “ground”—
planning to implementation and overcoming NIMBYism and political waffling.

How to Balance Transportation Demands (Goods/People) Through Natomas, Power Inn:
Need to ensure transportation/movement of commercial goods through key areas with
significant congestion (Highways 5 and 80; Truxel Road, Del Paso Road and West El Camino).

How to Overcome Perception Negative Perception of Neighborhood Investments: Many
noted that greenfields are perceived as superior to existing neighborhood redevelopment which
hurts investment in Sacramento. They noted that there is a need to educate people on the
benefits of urban investment. The challenge below is related.

How to Face Aging Infrastructure: There is a lack of adequate basic public infrastructure and
available land to attract reinvestment in older areas and commercial corridors. Specifically, there
are key infrastructure gaps in sewer, transit which need to be addressed.

How to Support Growth of Commercial Corridors: How to make the long-term case for the
benefit of developing commercial corridor districts, particularly with property owners who focus
on the potential for short-term benefits and fail to see the need for longer-term investments.

How to Identify Appropriate Land for Specific New Industries: For example, Sacramento
lacks large developable parcels conducive to a “campus” setting. This was noted by one
participant but not discussed by the group to determine if others believe that the campus setting
is necessary to attract large knowledge-based tenants.

Need to Shift to New Uses: How to shift older manufacturing areas to new uses, given
NIMBYism. There is a need to diversify PBIDs.

Need to Support Alternative Transportation: How to ensure proper funding and support for
public and alternative transportation from Light Rail to Bike paths to Pedestrian improvements.

Influencers of the above challenges:
• City of Sacramento, Economic Development
• Developers


H The Hoyt Company                                                                           Page 4
         Economic Development Strategy - Local Agencies/Associations Focus Group August 12, 2005
•   Brokers
•   Banks
•   EDA/Redevelopment for infrastructure
•   Neighborhood associations
•   Folsom Boulevard Business and Property Association
•   Power Inn Business and Transportation Association
•   Retirement community

HUMAN RESOURCES

How to Use City’s Diversity as an Asset: How to overcome business community fears given
the cultural diversity within the business community. Need to use this diversity as an asset.
Some noted that there is a need to educate diverse business owners about how to work with
government. Some owners are often skeptical of the public sector.

How to Preserve and Keep Skilled Graduates Within the City: How to build a skilled labor
force comparable to the Bay Area and San Diego. There is significant leakage of college
graduates and other higher education students.

Influencers of the above include:
• Educational institutions
• Local businesses and associations
• Local government

FINANCE

Need to Identify Self-financing Projects: How to identify economic development projects
which are self-financing and do not require significant government subsidies to be successful.
There was concern that economic development was not expected to be a moneymaker which
affected the quality of “projects” being encouraged. Over the years the City has assisted in a
number of projects without trying to recapture investment on return. City tends to treat one
project at a time and not report benefit or recapture any part of it to reinvest.

How to Encourage Lenders to Finance Neighborhood-Serving Retail: Often there is no
information on buying power (capital available if buying power shown) which limits the
availability of capital.

Influencers of the above include:
• Lenders / banks
• Economic development departments
• City Council
• Local businesses




H The Hoyt Company                                                                        Page 5
          Economic Development Strategy - Local Agencies/Associations Focus Group August 12, 2005

BUSINESS CLIMATE

How to Reduce Perception of Onerous Permitting Process: Need to facilitate the movement
of projects/contracts through the administrative rules/policies and processes in a timely manner
so that it will not impede the project. Need better understanding of the flow in projects

How to Develop Greater Confidence in the City: How to create confidence that the City can
provide services/support to businesses or that it is a good location for one’s business.

How to Get City to Understand Needs of Business: There is a need for local government to
better understand business needs.

How to Maximize Economic Development Dollars Within Limited Resources/Budget: This
issue was raised and discussed several times and referred to the existence of a joint
City/County redevelopment agency which does not have to focus its dollars in Sacramento.

How to Recruit New Businesses When City Lacks Financial Incentives: Potential
companies and or their site selector frequently ask this question first.

How to Coordinate and Reconcile Different Plans: How to better implement plans among
City agencies which might have differing strategies or approaches.

Influencers of the above include:
• Local government
• Economic development department
• Planning department
• Businesses

QUALITY OF LIFE

How to Overcome Misconceptions People Have of Sacramento: Many think of Sacramento
as a “hot Central Valley city” that lacks the amenities of a major city in a metropolitan area and
does not have a thriving business community or urban center. Other perception challenges
include the assumption that Sacramento is “not a destination”, is a “political town”, has “major
traffic problems”, and does not have significant innovation assets.

How to Reestablish a Vital Urban Core: How to create downtown neighborhoods with urban
retail amenities. How to attract businesses and residents to the central city but still provide,
manage, and mitigate social services/low-income housing to the disadvantaged. Related topic:
crime, blight and nuisance activities. Need political will to do the tough work as well as support
from the media.

How to Overcome the Negative Perception of Commercial Corridors: The public, business,
and investors have negative perceptions of older commercial corridors which results in
insufficient investments in these areas and unreasonable subsidy requests. Multiple groups
overlook these older areas: City Council does not have a strategy for business; Real estate
brokers are often not interested; Land use planners/Public Works department have archaic
ways of looking them and Landowners often speculate and let sites deteriorate. There is a need
to work to beautify the commercial corridors and older areas.


H The Hoyt Company                                                                           Page 6
          Economic Development Strategy - Local Agencies/Associations Focus Group August 12, 2005

How to Attract Neighborhood-Serving Retail: Sometimes there is capital available but not
sufficient buying power to attract businesses. It might require accurate market information.

How to Successfully Revitalize the Waterfront: There are many challenges affecting this
such as the lack of a “marina culture” and the presence of multiple agencies with few funding
sources (i.e. no lead agency).

How to Maintain an Affordable Housing Advantage: How does the City and region continue
to provide affordable housing to attract and retain companies with good paying jobs? There is a
need for affordable housing to support business growth since the affordability advantage of the
region is eroding.

How to Maintain Public Safety: How to manage public safety despite increase in crime
(particularly in Natomas).

Influencers:
• Elected officials, Political operatives/professional political staff
• Social service providers, Non-profit agencies
• Community activists
• Media
• Neighbors, residents, businesses, property owners
• City, County staff
• Public safety personnel
• Developers/BIA
• Chamber of Commerce
• Housing advocates
• Lenders
• Providers of transportation networks

INNOVATION/TECHNOLOGY

How to Change Image About Region’s Innovation Assets: Need to eliminate/reduce self-
doubt about region’s innovation that affects companies.

How to Secure Risk Capital: In particular, it is difficult for local firms to obtain venture capital
from the region. It is not clear if obtaining VC money from outside the region is a challenge.

How to Highlight Need for a “Research-Based Knowledge Economy”: How to focus more
on the importance innovation and research as a key input to regional economic development.

Influencers of the above include:
• City and County Government
• Education
• Investors (VC firms) and Financial institutions (CalPERS)
• Area leadership (namely Economic Development)

At the end of the focus group, each participant submitted their index cards containing their
critical economic development priorities. The comments in thse index cards have been added to
the above summary.

H The Hoyt Company                                                                             Page 7