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HomeMy WebLinkAbout19-City Administrator ~ " CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator Subject: Resolution of the Mayor and Common Council of the City of San Dept: City Administrator's Office Bernardino adopting the 2004 Comprehensive Economic Development Date: January 15, 2004 R \ G \ N A rtrategy (CEDS) Meeting Date: March 1,20040 Synopsis of Previous Council Action: 2/10/2004 Grants Ad Hoc Committee recommended for approval. Recommended motion: Adopt Resolution. Contact person: Ten Baker Phone: 5122 Supporting data attached: Staff Report, Resolution, CEDS Document Ward: All FUNDING REQUIREMENTS: Amount: None Source: (Accl. No.) (Accl. Description) Finance: Council Notes: ~ ~2CD4-b'" 31 J jfJ!L Agenda Item No. J!J.- '" , CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT Subiect: Resolution of the Mayor and Common Council of the City of San Bernardino adopting the 2004 Comprehensive Economic Development Strategy (CEDS). Backaround: The Federal Economic Development Administration (EDA) has several grant programs available for economically distressed areas. The types of projects that Federal EDA can fund are as follows: ~ Planning and technical assistance to build local capacity for economic development projects. This includes assistance for local, State, and regional planning organizations that target distressed communities. ~ Public works and development facilities to support industrial, commercial, and technology- based employment in eligible areas experiencing significant economic distress. Examples include: Grants to improve or develop transportation facilities, water, and sewer systems for industrial use; industrial parks and buildings; business incubators and technology training centers; telecommunications facilities; and research parks. ~ Economic adjustment assistance to address severe economic dislocations, natural disasters, or other special needs. Grants may be used to establish revolving loan funds for business retention, expansion or new enterprise development. Funds much leverage other public and private capital for strategic investment in local capital markets. EDA determines area eligibility for Public Works and Economic Development Adjustment grants based on the level of unemployment, per capita income, or special need. In addition to the eligibility requirements, EDA requires that a Comprehensive Economic Development Strategy (CEDS) be developed and adopted by the applicant before grant applications for public works, economic adjustment, an most planning programs may submitted. A CEDS is the result of a local planning process designed to guide economic growth of an area. EDA has guidelines that must be followed in developing a CEDS. It must include an analysis of economic and community development problems and opportunities; background and history of economic development situation of the area covered; a discussion of community participation in the planning efforts; a section setting forth goals and objectives for taking advantage of the opportunities of for solving the economic development problems of the area serviced; and a plan of action, including suggested projects to implement. The CEDS must be developed by a committee consisting of diverse community leaders. Up to this point the City/EDA have been ineligible to receive Federal EDA funding because a CEDS has not been prepared. In late 2002, CSUSB Professor Lee Hanson was asked to assist the City in establishing a CEDS Committee and to subsequently prepare the CEDS document based on the committee's input. CEDS Staff Report Page 1 of3 CEDS Committee Members included: Michael Gallo, Executive Vice President, Kelly Space and Technology Ray Gonzales, Region Manager, Southern California Edison Ronald Graybill, Community Outreach Coordinator, Lorna Linda University Medical Center Barbara Halsey, Director, Jobs and Employment Services Department, County of San Bernardino Lee Hanson, Professor of Management, California State University, San Bernardino Dawkins Hodges, Executive Director, Neighborhood Housing Services of the Inland Empire Gary Van Osdel, Economic Development Agency Teri Baker, Sr. Administrative Analyst Glenn Baude, Code Compliance Bob Botts, Chief Administrative Officer, Garner Holt Productions James Funk, Director, Development Services Department The connnittee met for several months to discuss the plan and provide input, which was later used to develop the attached CEDS document for the City of San Bernardino. The document contains the following sections: o Analvsis: Discussion of San Bernardino's physical, social, and economic environment, its assets and challenges, regional trends, key economic opportunities, and community involvement in economic planning. o Vision and Goals: Statement of the economic future envisioned for the city ten and 20 years hence and goals for realizing the vision. o CEDS Action Plan: Presentation of initiatives, projects, and timelines for pursuing the goals established in the CEDS vision. o Evaluation: A framework with performance measures and indicators for assessing progress in implementing the CEDS. o Proiects: Listing of potential projects that support the CEDS. Federal EDA reviewed the CEDS in draft form late last year and gave preliminary approval. A resolution approving the CEDS must be adopted by the City Council prior to EDA final approval. Once EDA formally approves the CEDS, the City will be eligible to apply for grant funding. The funding cycle for 2004-05 will be March - June of this year. Grant awards will be announced late 2004 and early 2005. The City will be required to update the CEDS annually in order to remain eligible to apply for funding. EDA typically requires a fifty percent match for grants. The match must be from a non-Federal source such as, applicant contributions, State and local grants and loans, general obligation bonds, and other public and private contributions. In-kind contributions may include land, space, equipment, and other costs determined by EDA as eligible project costs. Grant awards typically range from $300,000 to $3 Million for construction projects and from $20,000 to $100,000 for non-construction projects. Once the CEDS is in place, the City becomes eligible to apply for funding and possible grant funded projects will be brought to the CEDS Staff Report Page 2 of3 Grants Ad Hoc Committee. Projects around the depot and airport areas will be looked at for potential funding from the Federal EDA. At the February 10th Grants Ad Hoc Committee Meeting, committee members reviewed the CEDS document and recommended it for approval subject to the Mayor's review of the general priorities for development and job growth for City/EDA economic development efforts (page 33). The committee also suggested that an additional priority be added (technology and related professional/engineering services) and that the Mayor review the ranking of the other priorities. Upon review, the Mayor approved of the order established by the CEDS Committee and agreed that the additional priority of technology and related professional/engineering services should be added. Fiscallmoact: None. Adoption of a CEDS may result in additional grant funding for the City. Recommendation: That said resolution be adopted. CEDS Staff Report Page3 of 3 e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 e e f ~(Q)~~ RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ADOPTING THE 2004 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY (CEDS). WHEREAS, the Federal Economic Development Administration (EDA) is an agency that provides grant assistance to economically distressed areas as authorized by the Public Works and Economic Development Act of 1965; and WHEREAS, EDA supports local, State, and regional economic development efforts within the United States; and WHEREAS, EDA provides direct grants, on a cost-share basis, for projects that will cerate and retain private-sector jobs and leverage public and private investment in distressed areas; and WHEREAS, to ensure sound planning and coordination of local, State, and Federal funding in response to local needs and objectives, EDA has a statutory requirement that public works and economic adjustment projects funded by EDA must be consistent with a CEDS approved by EDA for the project area; and WHEREAS, a CEDS Committee conslstmg of various representatives of the community was established for the purpose of developing a Comprehensive Economic Development Strategy for the City of San Bernardino; and WHEREAS, the City of San Bernardino CEDS Committee developed the CEDS for the purpose of applying for EDA grant funding and the CEDS has received preliminary approval from EDA. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. That the Mayor and Common Council hereby adopts the 2004 Comprehensive Economic Development Strategy (CEDS), attached hereto and marked Attachment A; and SECTION 2. The Mayor or her designee is hereby authorized to submit the 2004 CEDS to the Federal Economic Development Administration. III III 71l 0 ! q .3) I /~I e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 e e RESOLUTION OF THE MAYOR AND COMMON COU:'tICIL OF THE CITY OF SAN BERNARDINO ADOPTING THE 2004 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY (CEDS). I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereof, held on the _ day of , 2004, by the following vote, to wit: Council Members: AYES ABSTAIN ABSENT NAYS ESTRADA LIEN-LONGVILLE MCGINNIS DERRY KELLEY JOHNSON MCCAMMACK City Clerk The foregoing resolution is hereby approved this day of __, 2004. Judith Valles, Mayor City of San Bernardino Approved as to Form and legal content: By' e e e ~ "Attachment A" 2004 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY (CEDS) f,::,:r;:',,:;,;~xr-~r~:y . .... ..... r< ;~) ""~.';~'; San Bernar "Ino SM Prepared by the CEDS Committee 2003 Adopted by the Common Council March 2004 e e e City of San Bernardino Comprehensive Economic Development Strategy 2004 This Comprehensive Economic Development Strategy for San Bernardino has been prepared by a CEDS Committee consisting of members of the community and staff of the City and Economic Development Agency (see names below). In preparing the CEDS, the Committee has utilized analysis and community input trom the following major City planning initiatives: . Update of the General Plan, conducted during 2002 - 2003 . "Business-Industry Growth" (BIG) plan developed during 1998 - 1999 and adopted in April 1999 as the City's official economic strategy . Application for an Empowerment Zone/Enterprise Community designation, 1998 This 2004 CEDS is presented in four sections: I. Analvsis (pp. 4 - 29): Discussion of San Bernardino's physical, social, and economic environment, its assets and challenges, regional trends, key economic opportunities, and community involvement in economic planning. II. Vision and Goals (pp. 31 - 32): Statement of the economic future envisioned for the city ten and 20 years hence and goals for realizing the vision. III. CEDS Action Plan (pp. 33 - 35): Presentation of initiatives, projects, and timelines for pursuing the goals established in the CEDS vision. IV. Evaluation (pp. 36 - 37): A rramework with performance measures and indicators for assessing progress in implementing the CEDS. V. Proiects (pp. 38): Listing of planned projects that support the CEDS. VI. Attachments (pp. 39 - 46) CEDS Committee Teri Baker, Sr. Administrative Analyst, City of San Bernardino Glenn Baude, Code Compliance, City of San Bernardino Bob Botts, Chief Administrative Officer, Gamer Holt Productions James Funk, Director, Development Services Department, City of San Bernardino Michael Gallo, Executive Vice President, Kelly Space and Technology Ray Gonzales, Region Manager, Southern California Edison Ronald Graybill, Community Outreach Coordinator, Lorna Linda University Medical Center Barbara Halsey, Director, Jobs and Employment Services Department, County of San Bernardino Lee Hanson, Professor of Management, California State University, San Bernardino Dawkins Hodges, Executive Director, Neighborhood Housing Services of the Inland Empire Gary Van Osdel, Executive Director, San Bernardino Economic Development Agency e e e TABLE OF CONTENTS I. SAN BERNARDINO CEDS ANALYSIS .................................................................................................4 A. ENVIRONMENT, CHALLENGES, OPPORTUNITIES .................................................................... 4 I. Overview ................................................................................................................................................. 4 2. Demographic, Socioeconomic, and Labor Force Characteristics ......................................................... 4 3. Geographic, Climatic, and Natural Resource Features.......................................................................... 5 4. Local Infrastructure.............................................................................................................................. ... 5 (a) Highways, Streets, Water, Sewers..................................................................................................5 (b) Pub lic Transit.................................................................................................................................. 6 (c) San Bernardino International Airport.............................................................................................6 5. Major Sectors of the Economy and Employment Characteristics......................................................... 7 ( a) Emp loyment cl usters....................................................................................................................... 7 (b) Prospective New Employment Sectors.......................................................................................... 9 (c) Railroad Capacity -the Burlington Northern Santa Fe Intermodal yard................................... 10 6. Local Policy Factors and Conditions Affecting Developrnenl............................................................. 10 (a) Land Use Patterns and Problems..................................................................................................10 (b) City Fiscal Capacity ...................................................................................................................... 13 (c) Local Utility Users Tax ................................................................................................................13 7. Important Community Conditions Affecting Developrnenl................................................................ 13 (a) Housing and Blight......................................................................:................................................ 14 (b) Primary and Secondary Education ............................................................................................... 14 (c) Health and Well-Being .................................................................................................................15 8. New Economic Opportunities ..............................................................................................................15 (a) "Lakes and Streams" Downtown Revitalization Project............................................................. 15 (b) Norton ~ San Bernardino International Airport (Alliance California)........................................ 16 (c) Santa Fe Depot Districl................................................................................................................. 16 (d) U ni versi ty District ........................................................................................................................ I 7 (e) Arrowhead Springs Resort............................................................................................................ 17 (f) Stadium Business Park.................................................................................................................. 18 B. REGIONAL TRENDS IN SOUTHERN CALIFORNIA & THE INLAND EMPIRE ..................... 18 I. Population Growth ................................................................................................................................. 19 2. "Smart Growth" .................................................................................................................................... 19 3. Rising Housing Costs ~ Commuter Work Force .................................................................................20 4. Defense Downsizing and Manufacturing Industry Migration ............................................................. 20 5. Growth of Logistics and Warehousing.................................................................................................2 I C. LOCAL & REGIONAL ECONOMIC DEVELOPMENT RESOURCES ........................................ 21 I. Municipal Agencies.............................................................................................................................. 2 I 2. County Organizations........................................................................................................................... 22 3. Joint Powers Authori ties....................................................................................................................... 22 4. Higher Education Institutions............................................................................................................... 23 5. Local Private Groups............................................................................................................................ 23 6. Regional Agencies and Groups ............................................................................................................24 D. ENGAGEMENT OF THE COMMUNITY IN ECONOMIC PLANNING ...................................... 24 I. Empowerment Zone/Enterprise Community (EZ/EC) Application .................................................... 24 2. Business-Industry Growth Strategy ..................................................................................................... 26 3. General Plan Update............................................................................................................................. 27 2 e e e 4. CEDS Committee ........................... ......................................................................................".........~.~. 28 E. SUMMARY .........................................................................................................................................28 II. SAN BERNARDINO CEDS VISION AND GOALS ...........................................................................30 A. VISION ................................................................................................................................................. 30 B. GOALS ............................. .................................................................................................................... 30 c. INTERRELATIONSHIPS BETWEEN GOALS................................................................................31 III. CEDS ACTION PLAN .......................................................................................................................... 32 A. GUIDING PRINCIPLES ..................................................................................................................... 32 B. INITIATIVES ......................................... ............................................................................................. 32 IV. CEDS EV ALU A TION........................................................................................................................... 35 A. EV ALUA TION ASSUMPTIONS ......................................................................................................35 B. EVALUATION STRUCTURE - CEDS COMMITTEE ................................................................... 35 C. PERFORMANCE INDICATORS: RATIO TREND AND PROJECT INDICATORS.................... 35 I. Ratio Trend Indicators .......................................................................................................................... 36 2. Project Indicators.................................................................................................................................. 36 V. PROJECTS .............................................................................................................................................. 37 VI. ATTACHMENTS .................................................................................................................................. 38 ATTACHMENT I: San Bernardino Economic Development Agency Services .................................... 38 ATTACHMENT 2: San Bernardino Empowerment Zone Vision Statement, 1998................................ 39 A TT ACHMENT 3: Business Advisory Council Members, 1998 - 2000 ................................................ 40 A TT ACHMENT 4: Business Industry Growth (BIG) Strategy Initiatives and Status............................ 41 ATTACHMENT 5: Community Participants, General Plan Update, 2002 - 2003.................................43 ATTACHMENT 6: Reports and Works Referenced in CEDS Document .............................................. 45 3 e e e I. SAN BERNARDINO CEDS ANALYSIS A. ENVIRONMENT, CHALLENGES, OPPORTUNITIES I. Overview San Bernardino is a city of approximately 190,000 residents, 60 square miles in size, situated 65 miles due east of Los Angeles and 50 miles west of Palm Springs. Incorporated in 1854, it is one of the oldest communities in Southern California and the seat of San Bernardino County, geographically the largest county in the continental United States.! The city is located in the heavily populated southwest comer of the county, part ofthe Riverside-San Bernardino Primary Metropolitan Statistical Area (PMSA), population 3,373,000. Owing, in significant part, to a loss of a number of major employers, San Bernardino has been an economically distressed community for the better part of two decades. In 1983 Kaiser Steel in nearby Fontana, built during World War II, laid off much of its 9,000-person workforce, many of whom were San Bernardino residents. Another 4,000 jobs were eliminated in 1992 by the closure of the Santa Fe railroad Pacific coast locomotive works, which was first established in San Bernardino in 1885. Concurrently, between 1991 and 1994 Norton Air Force Base, the city's largest employer since World War II, was decommissioned at the cost of another 10,000 jobs. Deprived of these longstanding employers and many of the ancillary businesses they supported, the community has suffered a variety of economic and social problems. These include chronic unemployment and concomitant need for public assistance, disinvestment in housing stock and consequent blight, and poor health conditions among many poorer residents. During the second half of the 1990s, the city's circumstances thankfully began to take a turn for the better. In part, reinvigoration stemmed from strong growth in the state and national economies. But in addition a new mayor - who first took office and formed a new administration in 1998, and whose popularity returned her to office in 200 I - has helped initiate or has endorsed a number of major economic and community revitalization efforts over the past five years. These initiatives are addressed later in this plan. 2. Demographic, Socioeconomic, and Labor Force Characteristics2 In terms of population makeup, education, and affluence, San Bernardino may be characterized as an ethnically mixed city with income, education levels, and property values that fall below the average for the County of San Bernardino, itself among the less wealthy counties in California. By ethnicity, the city's population is 29 percent white, 48 percent Hispanic, 16 percent black, and four percent Asian (in comparison, the county is 44 percent white, 39 percent Hispanic, nine percent black, and five percent Asian). Just eight percent of residents have bachelor degrees, 120,062 square miles - compared with, for instance, the state of Maryland, which is just 9,775 square miles. (Source: McCormack's Guides, Riverside & San Bernardino 2001.) 2Data cited in this section are from 2002 City of San Bernardino Community & Economic Prf?file, San Bernardino Economic Development Agency; and Economic Analysisfor an Update of the Land Use Element of the General Plan. Economic Research Associates, March 2002. 4 e e e compared with ten percent in the county, while 26 percent of persons age 25 and old~r have_ completed high school. Median annual household income in 2001 was $33,604, against a countywide median of $45,795 (36 percent less). Median home price in January 2000 was $86,250,20 percent below the County median of$109,000. During the decade 1990-to-2000, San Bernardino's population grew at an annual rate of 1.4 percent, which trailed the county's growth rate of 1.8 percent. In 2000 the city hosted approximately 79,000 jobs, 5.46 percent of all jobs in the Riverside-San Bernardino PMSA. This figure represented a proportional decline since 1990, when the city claimed 5.66 percent of the PM SA's total employment. However, city employment did begin to improve somewhat in the late 1990s. From a high of 13.9 percent in 1993, unemployment in September 2002 had fallen to 7.9 percent3 3. Geographic, Climatic, and Natural Resource Features San Bernardino is situated in the "Inland Empire" area of Southern California, a sub-region of greater Los Angeles consisting of western Riverside and San Bernardino counties and edges of eastern Los Angeles County4 San Bernardino is located in a valley bounded on the north by the San Bernardino mountains. Cajon Pass, long the major entryway into the Los Angeles basin from the east, transects the mountains just north of the city. Interstate 15 and transcontinental rail lines come through Cajon Pass and San Bernardino. In its natural state, the San Bernardino valley is desert. Summer temperatures range between 60 and 100 degrees, winter temperatures between 45 and 75 degrees. Annual rainfall averages just eight inches. Since the 1940s the area has been plagued by smog, resulting from offshore winds that blow inland from the Los Angeles area. Thankfully however, modem air quality controls have begun to mitigate the smog problem. San Bernardino has no natural resources which are conspicuously different from those of other Inland Empire communities, with one big exception: water. The city sits atop a I,OOO-foot deep underground lake, about the size of Lake Shasta, which is owned by the San Bernardino Valley Municipal Water District. The community thus enjoys local control of a resource that offers the potential to eventually transform its economy through sale of water to Southern California. 4. Locallnfrastructure San Bernardino is endowed with all primary forms of public infrastructure, albeit of varying states of repair: (a) Highways, Streets, Water, Sewers The city sits at the junction of Interstate 10 and Interstate 215. 1-10 runs along its southern boundary. 1-215, which intersects 1-15 (the route to Las Vegas) immediately north of the city 3Source: California Emplo)'Tnent Development Department, http://www/ca.mis.ca.gov. 4The greater Los i\ngeles metropolitan area consists of Los Angeles, Orange, Riverside. San Bernardino. and Ventura counties. 5 . limits at the mouth of Cajon Pass, bisects the city on its west side. The 1-215 freeway wasJmilt in the late 1960s to replace old U.S. 66 as the main transcontinental highway into Southem California. Constructed with a limited number of west side-serving freeway on/offramps, it has long been a wall between the rest of the community and the west side, which has a predominantly Hispanic and black population. Through loss of commercial activity once tied to Route 66, the west side has become perhaps the most economically distressed zone within the city, with the greatest unemployment, health, and crime problems. A major renovation of 1-215 is scheduled to commence in 2004 to upgrade interchanges and open access to the west side. At some point after completion of the 1-215 Freeway Improvement Project, the east/west arterial streets leading to its interchanges will also have to be widened to accommodate expected increases in traffic and assorted economic development. The city has a total of 64 miles of surface streets laid out in a conventional grid network, with all main intersections being signalized. As an older street network, much ofthe infrastructure is ageing or needs to be upgraded to accommodate future traffic loads. In recent years, the City has been increasing investment in street improvements and maintenance. As with its street network, San Bernardino's water and sewer systems also are aging. Since the late 1990s the City has increased the volume of water and sewer system rehabilitation and new construction projects being carried out under its Capital Improvement Program. (b) Public Transit . Public transit is provided by Omnitrans, an agency of San Bernardino County. Bus routes serve all areas of the community, used primarily by lower-income residents. Because the city is spread over 60 square miles, traveling to its various districts and neighborhoods is really only feasible by vehicle; like most Southern California communities, it is essentially auto-dependent. Fortunately, traffic congestion generally is not severe, at least on most surface streets during most of the day (congestion naturally is greater on main arterials near freeways). . (c) San Bernardino International Airport Former Norton Air Force Base, located completely within the city limits on the east side, has been transferred from the military to two local Joint Powers Authorities (JP As) for redevelopment as a civilian airport, named San Bernardino International Airport, and a new commercial-industrial district for the city. Local government members of the JPAs, which share a joint board, are the County and City of San Bernardino and the adjacent Cities of Colton, Highland, and Loma Linda. The San Bernardino International Airport Authority (SBIAA), formed in 1992, has responsibility for the 600 acres of airport property. The Inland Valley Development Agency (IVDA), formed in 1990, has authority over the 1,300 acres of the remainder of the former base. The base prop'erty is part of a 15,000-acre redevelopment area. Since the mid-1990s, some $20,000,000 has been invested in redevelopment of the former base, mainly for street and infrastructure improvements and building demolition. Most of the old Air Force buildings are commercially substandard and in need of major remediation (asbestos), but some have nonetheless become home to about 70 small private or public organizations 6 i' e e employing approximately 2,000 persons (1,700 full time). In 2000, the site receivedll six-year state Local Agency Military Base Recovery (LAMBRA) designation, the equivalent of an Enterprise Zone, which provides incentives for attracting industry.5 Although the airport has also been designated a Foreign Trade Zone, it has yet to attract commercial passenger or air cargo business, in part because it competes with Ontario International Airport just 20 miles west. Nonetheless, efforts to lure commercial carriers are a central part of San Bemardino airport redevelopment plans. In 2002 a ten-year master-development agreement was executed with Hillwood Investments, developer of the successful Alliance Texas air cargo airport in the Dallas- Fort Worth area. Hillwood's stated aim is to transform the Norton area into a commercial aviation center with ancillary industrial and warehouse facilities, to be called "Alliance California." The airport and surrounds are seen as the keystone of future economic growth and revitalization of the greater San Bernardino area. 5. Major Sectors of the Economy and Employment Characteristics (a) Employment clusters An analysis of San Bernardino's economy and employment clusters recently was performed by Economic Research Associates as part of the updating of the City's General Plan6 According to the ERA analysis, in 2000 eight sectors accounted for 46 percent of the city's 79,000 jobs (as well as 39 percent of business sales volume and 32 percent of establishments): Table 1. Top 8 San Bernardino Employment Sectors Sector Health services Educational services Public administration Real estate Business services Special trade contractors Printing & publishing Legal services Emolovment 9,771 13% 8,498 11% 7,510 10% 2,251 3% 2,084 3% 1,633 2% 1,536 2% 1,112 2% Establishments 467 8.1% 137 2.4% 224 3.9% 280 4.9% 266 4.6% 207 4.6% 62 1.1 % 187 3.3% One of the most striking - and in terms of future economic prosperity, troubling - facts disclosed by these and the data in the next two tables is the lack of any significant amount of manufacturing or other high-wage, private industry among the leading economic sectors. Public sector and non-profit (health care) employment are the city's two largest occupational groups, the former reflecting its function as county seat. By comparison, the largest concentrations of private-sector employment are mainly retailing and services (sectors with over 1,000 employees are shown in Table 2): 5 Local Agency Military Base Reuse Area application, Inland Valley Development Agency, May 1999. e 'Economic Analysis for an Update of the Land Use Element of the General Plan, cited pteviously. 7 e e e Table 2. Leading Non-Manufacturing Industry/Employment Sectors Sector Eating & drinking Miscellaneous retail Wholesale trade - durable goods Lumber & wood products Auto dealers & service stations General merchandise Food stores Business services Auto repair, service & parking Home furnishings Engineering & management services Local passenger transportation Personal services Total Emolovment 4.913 2,713 2,447 2,290 2,275 2,195 2,154 2,084 1,615 1,331 1,272 1,209 1.063 27,561 Establishments 341 370 233 2 195 34 195 266 275 189 166 16 303 2,585 Most of these businesses mainly serve local customers, with the exception of restaurant and retail activities located along the interstate highways that draw outside wealth into the local market. The limited range of establishments that entail manufacturing empJ.oyment is shown in Table 3: Table 3. Manufacturing Employment and Establishments Sector Rubber & plastics Furniture & fixtures Chemical & allied products Transportation equipment Industrial machinery & equipment Miscellaneous manufacturing Stone, clay & glass products Paper & allied products Apparel & other textile products Textile mile products Electric & electronic equipment Primary metal products Instruments & related products Lumber & wood oroducts Total Emolovment 347 280 252 218 170 139 137 92 91 65 51 36 23 II 1,912 Establishments 7 9 9 13 18 18 9 3 6 I 2 3 3 2 103 The 1,900 manufacturing-related jobs documented in Table 3 account for less than three percent of total employment. While predominance of retail and service employment is hardly unusual for modem U.S. cities, the near-absence of manufacturing-related jobs or services traded in outside markets (e.g., management or engineering consulting, architectural design, software programming) means that San Bernardino has quite limited export-oriented economic capacity. In general, a city's economy must export some of its economic product to outside regional, state, national, or international markets in order to draw outside income with its multiplier effects on 8 e local revenues and incomes.7 In other words, it is private-industry exporting which u~ually_ _ determines whether or not a city is prosperous. To a degree, San Bernardino's dearth of private-industry export activity is compensated by government employment that serves to inject tax revenues generated elsewhere into the local economy (the economic impact of the loss of Norton AFB employment stemmed from the withdrawal of federal revenues coming to San Bernardino from outside). However, public sector revenue transfers can rarely be a full substitute for vibrant private-industry export activity like manufactured goods or high-value services. Accordingly, it can generally be stated that the long- term employment challenge for San Bernardino is twofold: . To expand, through business attraction and local business development, private sector export activity whether manufacturing, high-value services, transportation and logistics, high-tech, or similar higher-paying industry sectors. . To preserve, and if possible expand existing higher-income health, educational services, and public administration employment (particularly county, state, and federal). (b) Prospective New Employment Sectors The County of San Bernardino has identified existing employment sectors that seem to offer potential for further growth within the San Bernardino metropolitan area.s These include: e · Warehousing and logistics (including air cargo) . Transportation . Light manufacturing . Food processing . Health care and hospitals . Office management service . High-tech Among these industry/occupational areas, transportation and logistics would seem to be particularly promising because of San Bernardino's location along interstate highways, its existing rail intermodal yard (see next section), and San Bernardino International Airport. In addition, City economic development efforts should also focus on seeking to lure high- technology businesses. Although there presently is little technology industry within the city (or the region), bolstering the potential to cultivate local high-tech is the fact that Lorna Linda University Medical Center (LLUMC), a research university with some interest in technology e 7In economics, the role and significance for city economies of export production is eXplained in "export base" theory. See Emil Malizia and Edward Feser, Understanding Local Economic Development (1999), Center for Urban Planning Research. 8Comprehensive Economic Development Strategy, County of San Bernardino. 2000, p. 251. 9 e e transfer and commercialization, is located next door to San Bernardino. Because th~ City DC Lorna Linda has very limited available industrial space, the potential exists for medical device- making ventures that might one day be launched from LLUMC to establish their facilities in San Bernardino. This has already occurred with one high-tech business, Optivus Technology, which was "spun off' from the university in 1993 to market and sell an $80 million system for the treatment of cancer, and has been located in San Bernardino from its inception. (c) Railroad Capacity - the Burlington Northern Santa Fe Intermodal Yard San Bernardino remains a significant rail node because the BNSF railroad has an intermodal facility at the former locomotive yards along Mount Vernon A venue and the 1-215 freeway, where containers are transshipped to and from trains and trucks. Current container volume is 410,000 annually, a near ten-fold growth between 1991 and 2001.9 Since the intermodal yard went into operation, a major trucking company, Yellow Freight, has co-located a 26-acre facility adjacent to it. Given the steady growth of the logistics industry in Southern California because of the role played by Long Angeles-Long Beach ports in Pacific Rim trade (see Section C-5, p. 22), it is conceivable that rail-related activity could once again become an employment hub for San Bernardino, particularly if the airport area develops as hoped. However, expansion ofintermodal and related transportation activities, if it happens, will also bring a major increase in truck traffic on city streets. Consequently, City officials have some concerns that intermodal growth might ultimately benefit the region more than it does San Bernardino, once the costs in increased street maintenance and repair and noise impacts on local property values are taken into account. But that caveat noted, the City recognizes that intermodal and transportation have potential as a future growth sector of the local economy. 6. Local Policy Factors and Conditions Affecting Development In pursuing development of new industry, San Bernardino faces some significant policy (land use, fiscal, political) challenges. (a) Land Use Patterns and Problems San Bernardino was originally settled (I 850s) around the present downtown area, with later commercial and residential development spreading to the west side around the railroad complex (see map next page). Up through World War II and even after, citrus and truck farming were common on the edges of town as well as within city limits, particularly on the east side of downtown and around what in 1942 became Norton AFB. Following the war, as growth extended into the north end, as well as eastward toward the neighboring community of Highland, there was only limited municipal effort to manage the pattern of development. Numerous lots throughout the city once used for farming (or never used for anything) were leapfrogged and left undeveloped, especially east of Waterman Avenue and around Norton AFB. e '2002 City of San Bernardino Community & Economic Profiie. cited previously. 10 e e e , 1~3~~; flflO';:1: CJ~611a1C"I~ j. o CtatAl~I~Nollb _CeOlAl"~W~" _ Sl:ltt CoIl!;Y . J~q.stn!hrl D&~thM _N~rt~W!~l DTti("C1' D~~th~l~ I'J',~;o. i vp~"'" C><,~. o Mt.'i'....n CJCI~LIUlltI .~~..lthlfoel' l'llot:! DC::OU.loY_ ..a.. NORnl ,\.-J:.r.u.:.~r.. ~. ,"."- "f. :4. I .iJ,.:<; ~.{,~i; :;. ~~':.Ji~ )~~ ~1_~ ~" -,I. ~ ". 'n.!)..})"- Uv (! Sa," Bernardin;!. AGENCY ECONOMIC DEVEL -~ I / '~ \ \, ... ..- . ""'1:--. 11 . . tit ~ Today, despite San Bernardino's being an established urban area, considerable acreage east of downtown is a patchwork of developed and vacant parcels mixing commercial and residential uses, much of it blighted and poorly served by infrastructure. Some 40 percent of the city falls within a redevelopment area. Efficient land assemblage is impeded by the fact that many individual owners hold title to small parcels. In addition, there are a number of County islands within City limits over which the City has little or no authority. These conditions increase the difficulties and costs of developing land or redeveloping it for urban infill. Consequently, even as developer interest in San Bernardino grows, much available land - particularly in the vicinity of the airport and its approaches (e.g., along Tippecanoe Avenue north from 1-10) - is unready for development. The City is preparing a Tippecanoe Master Infrastructure Plan to encourage and facilitate new investment in and around the airport, and market forces presumably will begin to create incentives to assemble and clear properties in this and other areas. However, the process will probably be slower and costlier than might have been the case with more effective land use. With general regard to land use patterns, it should be noted that San Bernardino presently has six main commercial areas: (1) downtown around the Civic Center (2nd and "D" streets); (2) the Hospitality Lane area along the 1-10 freeway on both sides of Waterman Avenue, developed over the past 30 years; (3) longstanding commercial development along Base Line Street and Highland Avenues between from the 1-215 east to the city of Highland; (4) the San Bernardino west side along the Mount Vernon corridor; (5) the north end of town on the west side ofI-215 above University Parkway, which is home to the city's main industrial park; (6) and the north end east of 1-215 around Cal State San Bernardino, an area that is predominantly residential, but increasingly draws retail business to serve the north end population. As of August 2002, the city had II million square feet of industrial space, with vacancy in about I million square feet. Lease rates were among the lowest in the Riverside-San Bernardino county area, $0.36 per square foot per month, making industrial property in the city very competitive in strict terms of property costs.10 However, it is revealing to note the limited amount of industrial space in San Bernardino relative to other leading Inland Empire cities: Table 4. Industrial Space in Key Inland Empire Cities City Population Industrial Space Industrial Space (sq, ft.) per Resident (sq. ft.) Corona 123,000 25,550,000 207.7 Ontario 152,000 81,000,000 532.9 Riverside 260,000 17,500,000 67.3 San Bernardino 190,000 11,000,000 57.9 Ultimately, only market forces (facilitated by accommodating City policy) can expand the amount of industrial space in San Bernardino so that in the future the city will be more nearly comparable to and competitive with neighbor communities. 102002 City of San Bernardino Community & Economic Profile, cited previously. 12 e tit e , (b) City Fiscal Capacity In 1991 and 1992 the City's revenues fell dramatically because of recession, necessitating a round of job cuts that eliminated about 100 positions. The revenue decline was compounded by the phase-out of Norton AFB that not only eliminated federal jobs and revenues, but reduced local sales taxes through loss of military patronage of off-base retail and service establishments and housing. In 1998 the Economic Development Agency also had to make reductions, laying off 25 employees. While finances have since stabilized, staffing levels have not been fully restored to former levels. Consequently some departments, among them Development Services (responsible for planning, zoning, and project approval), are understaffed in some areas. A related problem is that some professional staff salaries have fallen below average levels for the area labor market, making it harder to attract or keep qualified talent. In 2000 a compensation study was conducted which resulted in a general increase that made salaries more competitive. Staffing has not been increased, however. Given fiscal problems in California government since early 2002, no significant increases are likely in the near future. (c) Local Utility Users Tax San Bemardino's municipal tax structure does not. differ greatly from that of neighbor jurisdictions, with one exception: the City imposes an eight percent Utility Users Tax (UUT) on residential and commercial electricity, gas, telephone, and cable service. Critics have claimed that the UUT significantly raises costs of doing business compared with neighbor communities, although whether this is true is unclear, as other local costs (land and labor particularly) are lower than in neighbor cities, to say nothing of the Los Angeles-Orange County area. In response to this concern, the City implemented a one-time UUT Rebate Program to all residents and businesses for August and September of 200 I, which totaled $855,000. In addition, the City in July of 200 I adopted a strategy to systematically reduce the tax based on a formula. The formula takes into consideration the growth in certain major General Fund revenues, and uses a portion of that growth to determine the amount of potential reduction. Each March the Finance Department uses the formula to calculate a possible VUT reduction. In December 2002 the City deliberated making a .15% reduction in the tax (which would have reduced total UUT fees paid by businesses and residents by $375,000 in 2003), but elected not to because of the state's uncertain fiscal situation. Additional financial incentives are available to qualified businesses from the EDA (Attachment I). 7. Important Community Conditions Affecting Development Three pressing community problems - deficiencies in housing, education, and healthcare - are interwoven with San Bernardino's economic weaknesses in a complex, cause-and-effect relationship oflong duration. It is beyond the scope of programs presented in this CEDS to actually solve these problems, but it is to be hoped that as the CEDS is implemented they may begin to abate. 13 e e e J- (a) Housing and Blight One of the central challenges confronting San Bernardino is to reverse two-plus decades of deterioration and blight in older residential districts. According to the 2000 Census, II percent of the city's 63,500 housing units are vacant, many of these in an advanced state of disrepair. Housing stock also is aged: based on 1987 data (the most recent available), 47 percent of housing is older than 30 years, while 19 percent is between 20 - 30 years old, averages which have probably not changed greatly. As property values have fallen, absentee landlords have bought up many housing units. As a result, the city's owner-occupancy rate has fallen to 52 percent (versus 59 percent in 1980). In the past, municipal blight-busting efforts tended to be fragmented. More recently though City responses have improved, building upon a system of Neighborhood Associations created through community organization to tackle blight at the neighborhood level, and supported in various ways by the City and Economic Development Agency. Currently there are about 40 active Neighborhood Associations, which identify priorities and develop remedies that may include City assistance in such areas as crime reduction, police presence, HUD foreclosures, and maintenance and beautification. A liaison in the Mayor's office works with the Neighborhood Associations to coordinate their efforts with the City. The Economic Development Agency has at various times provided limited resources to the Associations to atcomplish beautification projects in a number of neighborhoods. It also sponsors a Mortgage Assistance Program (MAP) and an Acquisition, Rehabilitation and Resale (ARR) program, which together have helped over 1,000 households achieve home ownership over the past five years. In the same period it has helped to rehabilitate some 1,500 housing units. Some of this investment has been targeted in six Neighborhood Improvement Projects (NIPs) established by the City to promote revitalization, development of new senior citizen housing, and housing preservation. Most recently (in 200 I), a Beautification Action Team or BAT, a cross-departmental unit comprised of managers of the Departments of Animal Control, Code Enforcement, Development Services, Fire, Parks and Recreation, Police, and the Economic Development Agency, was created. Its mandate is to develop and begin implementing a comprehensive, long-term strategy for containing and eliminating blight. To date, a tentative strategy has been outlined, but securing the resources to act on it is proving to be a challenge. By way of summary, it is clear to most City officials and community leaders that ifnew investment is to be attracted to reinvigorate the economy and revitalize neighborhoods, blight has to be checked and reversed. (b) Primary and Secondary Education Local schools grapple with pressing resource constraints and academic achievement problems inherent to a distressed economy. On one hand, schools must cope with the resource challenges that make it difficult to ensure adequate investment and maintenance of school facilities or competitive teacher salaries. In turn, schools struggle to educate successfully, reflected in the fact that San Bernardino student achievement scores on statewide tests are generally lower than the state average. The State Department of Education utilizes an Academic Performance Index (API) that assigns a rating ranging from 200 to 1,000 based on student scores on statewide achievement tests, with a performance goal of 800 for all schools. In 200 I, elementary, middle, and high schools in the city of San Bernardino had a relatively low average API of 14 e e e approximately 57011 San Bernardino (city and county) also has one of the state's lowest __ college-going rates for high school graduates. In part, low college attendance reflects the "blue- collar" nature of the regional economy, its historically limited employment opportunity for university graduates, and a commensurate lack of established college-going traditions in families. In reflection of this regional heritage (as well as larger statewide problems in primary and secondary education), high levels of remediation are required for undergraduate students entering local colleges and universities. 12 From the perspective of economic development, the import of San Bernardino's educational problems is that cultivating and sustaining an employable, skilled work force is a significant challenge. (c) Health and Well-Being In addition to education problems, San Bernardino County and City have some potentially serious health conditions~ There are no categories of the Year 2010 Health Objectives for the Nation in which the County has met goals. According to the California Department of Health Services annual report, California Health Status Profiles for Counties: 2001, the areas where it does worse than the rest of California include cancer deaths, firearm deaths, homicide, infant mortality, births to teens, suicides, strokes, and auto accidents. 13 For the nine years ending in 1999, the 92410 and 92411 zip codes on the west side had a rate of births-to-teens of 19.3 percent, compared to an overall state rate of 12.4 percent (56 percent greater). In the same area, the infant death rate was 10.6 per thousand, compared to 7.7 for the County (38 percent greater). 8. New Economic Opportunities Over the past five years (since 1998), a number of opportunities have emerged for redeveloping or enhancing key areas of the city. (a) "Lakes and Streams" Downtown Revitalization Project Because of its underground lake, San Bernardino has a high water table, which is believed to pose a danger of soil liquefaction and extreme damage and even collapse of buildings in the event of a major earthquake. In addition, future population growth projected for the area served by the San Bernardino Valley Municipal Water District will eventually require construction of new water storage facilities. To address both of these problems, a plan emerged in the late 1990s from within the Water District to construct a surface lake or lakes to store water. As this "Lakes and Streams" project crystallized, the Water District, local business interests, and eventually City officials came to agree that it had the potential to revitalize the greater downtown area by clearing blighted development for a system of urban lakes and streams surrounded by new housing and amenities (shops, parks, botanical gardens). IICalifomia Department of Education. 2000 - 2001 Academic Perfonnance Index (API) Growth Report, http://api.cde.ca.gov/api2000base 12See http://www.asd.calstate.edulremediationOO-remrates-sb.htm. 13See Http://www.dhs.ca.govlhisp.chs/phweekicprofile2001/profile2001.htm 15 e e e ,.. In 1999 a San Bernardino Regional Water Resources Authority was formed, consisting of the Water District, the City and its Water Department, and the Inland Val1ey Development Agency, to develop a detailed concept and scope of work and determine the costs of carrying out a Lakes and Streams project. As of August 2002, the concept as developed by consultants - original1y named "Vision 20/20" and now cal1ed the Downtown Revitalization Project - proposes creating a new "Garden City" in San Bernardino within an area of as much as 700 acres. The Project Area encompasses much of the existing downtown and surrounds. Two lakes would anchor it at either end, with a variety of water amenities spread throughout. As the project's draft Specific Plan states, "The entire Project Area currently represents a mixture of substandard commercial, industrial and residential uses, coupled with [some] newer, though under-performing commercial development....This area is economically depressed and surrounded by low-income residential neighborhoods. The general perception is that the area is undesirable and unsafe." 14 Projected cost of redeveloping the area through the plan is estimated to be between $150 and $200 million. Expectation is that financing would be obtained though a combination of grants, water sales, and bonds. The project would be constructed in phases, requiring up to 20 years to complete. If the projected schedule were met, land clearance could commence in June 2004. At the present writing, many implementation details remain to be determined. These include exact shape of lakes; whether a stream will connect them; number of dwel1ings to be demolished and historical1Y valuable dwel1ings that wil1 have to be moved; number of residents that will require resettlement from substandard conditions to adequate housing; and financial assistance to be provided to relocate. Numerous public meetings have been held to deliberate these matters, with more yet to come. A decision on the project is expected in 2003. (b) Norton - San Bernardino International Airport (Al1iance California) Commercial redevelopment ofthe San Bernardino airport area has been a priority of the City of San Bernardino and neighbor jurisdictions since the announcement in 1990 of the forthcoming closure of Norton AFB. The current plans for the site, centered on the existing airport and creation of an industrial, warehouse, and distribution center (Al1iance California), were described earlier (see Section A-4-b, pp. 6 - 7). In previous years, Economic Development Administration funds have been secured for various airport-area infrastructure improvements, and it is possible that additional applications could be made to EDA in the future. A particular need and opportunity identified for the airport area over the past year (since 2001) has been to create an infrastructure plan (the Tippecanoe Master Infrastructure Plan, mentioned earlier) for the base redevelopment project area. Once this plan has been completed, it wil1 facilitate future infrastructure improvements and new construction in the area. (c) Santa Fe Depot District San Bernardino's Santa Fe Depot is a historic structure built in 1918 in the Mission Revival architectural style, located on the southwest side of town next to today's BNSF intermodal rail yard. The 57,360 square foot building is registered as both a national and state historical site. Currently it is the San Bernardino stop for the Southern California Metro Link commuter rail system, but otherwise it is unused. Long decaying, the depot has been the object of several 14San Bernardino Revitalization Specific Plan, San Bernardino Regional Water Resources Authority, August 2002. 16 . . . !!" redevelopment plans over the years. Commencing in 1998, the City began to build a grant fund to restore the structure, and by August 2002 had obtained the $13 million needed for structural rehabilitation and seismic retrofit. In September 2002 the City awarded a contract to commence and complete restoration, which is scheduled for completion in January 2004. Long-term plans envision developing a "mercado" or market with mixed-use retail and offices in and around the depot. For this purpose the City and Economic Development Agency are exploring acquisition of property to the south of the depot. The depot area is particularly important as the primary historic preservation district in the city. (d) University District The campus of California State University at San Bernardino, located on the north end of the city, was inaugurated in 1964, at which time there was only limited development in its surrounding area. In the years since, new housing (both single family and apartments) and retail space have grown up around the campus. In authorizing this construction, the City made little effort to try to harmonize it with the campus architecture, or to exploit the opportunity presented by the campus to promote a "college town" atmosphere in the north end. As part of the City's General Plan update (see Section 0-3 below, p. 28), a University District Specific Plan is being prepared whose purpose is to set standards for future development around Cal State that will better integrate it and the surrounding area physically and visually. This will be promoted through unified landscaping, signage, street naming, and related approaches. An additional goal of the University District Specific Plan is to encourage and facilitate growth of technology businesses or other appropriate types of industry around the campus, working in cooperation with the University administration. Standards in the Specific Plan allow for a business/tech park that would abut CSUSB on approximately 100 acres fronting the south side of Northpark Boulevard between University Parkway and Campus Parkway. The business/tech park would contain approximately 25,000 sq. ft. of retail floor area designed to serve the special needs of the campus and the businesses in the park, and approximately 400,000 sq. ft. of buildings for commercial offices, technology activities, and a conference center. The property in question is owned by the San Bernardino Water Department. Ownership and the power to establish zoning standards give the City both a major incentive and the control needed to ensure that only desired kinds of growth occur there in the future, to include 150 - 200 single family houses priced in the $325,000 - $500,000 range. The general goal will be to stimulate the emergence of a new economic and employment hub in the north end of the city, one which capitalizes on the unique human, educational, and research assets of the campus. In 2002, University Parkway into the campus was repaved as part of a city capital improvement project, while CaItrans completed an upgrade of the offramp at University Parkway and 1-215. Funding has also been allocated to extend an existing street on the north end of campus to improve access to it, construction of which is scheduled to start in 2003. ( e) Arrowhead Springs Resort 17 e e e , Arrowhead Springs is a fonner resort hotel located on 1,916 acres of property in unincorporated territory on the north side of San Bernardino below Watennan Canyon, entrance to the San Bernardino mountains. The present hotel complex, which is the fourth to stand on the site, was built in the early 1940s (the first was erected in the 1880s). Originally a retreat for movie stars and other celebrities, the hotel has been closed tor many years. Now, a private real estate company has developed a concept for transfonning the property into a hotel, conference, and residential destination. The master plan for development of 556 acres of the Arrowhead Springs property includes a I 75-acre golf course and an upscale corporate office complex; a "residential hill-town" community of 272 homes on 52 acres and a senior retirement village abutting the most southerly portion of the golf course; an upscale single family residential neighborhood abutting the most northerly portion of the golf course; a "village walk" shopping complex; and an education and entertainment park focusing on community sustainability principles and the world of water. The remaining portion of the property would be open space, watershed, and wilderness. The plan envisions an exemplar of a sustainable community with on-site water, electricity, and sewer treatment. Building on the romance of artesian wells, geothennal waters, steam heating and mud baths, and movie star nostalgia, Arrowhead Springs would become a world-class demonstration of a sustainable community in hannony with the natural environment. As part of the development tenns the City would annex the property. In September 2002, the City approved an agreement with a consultant finn to prepare the Arrowhead Springs Specific Plan, Traffic Impact Analysis, Environmental Impact Report, Development Agreement, and Annexation Documents for the property, to be funded by the developer/owner of the property in the amount of $470,000. (t) Stadium Business Park In the early 1990s the City's Redevelopment Agency oversaw the construction of a minor league baseball stadium on "E" Street several blocks south of the Civic Complex east ofI-215. In 2002, plans emerged to expand upon the stadium by building a three-story Stadium Business Park office complex and parking structure, estimated to have a completed market value of around $80 million. The concept for the proposed project includes amending the development code to pennit construction and operation of 450,000 sq. ft. of building floor area and water features. The Stadium Business Park project would require acquisition and consolidation of approximately 30 acres. It would have excellent freeway access, and is envisioned to attract corporate headquarter-type tenants. B. REGIONAL TRENDS IN SOUTHERN CALIFORNIA & THE INLAND EMPIRE San Bernardino's regional economy can be viewed in tenns of two areas: the five-county greater Los Angeles area, and within that, the Inland Empire (Riverside-San Bernardino counties). The Inland Empire long has been overshadowed by the "coastal region" both economically, in tenns of comparative sophistication and wage levels of existing industry, and culturally, in tenns of variety and quality of civic, cultural, and recreational institutions. However, because of relative abundance of open land available for development, the Inland Empire is also understood to be the "next frontier" for Southern California growth. As such, it is c 18 e e e . generally expected that in the next two decades there will be an accelerating eastward migration of industry, investment, and housing construction that will transform the Inland Empire's physical, economic, and cultural environment. San Bernardino's challenge will be to capture an appropriate share of the anticipated growth while coping with the consequences of new housing and population, rising traffic congestion, and increasing consumption of critical resources such as water. The next sections discuss five regional trends that will affect future economic conditions in and around San Bernardino. 1. Population Growth For the five-county greater Los Angeles area as a whole, population over the next 20 years (to 2020) is projected to increase 22 percent, from 16,694,000 to 21,752,000. Within Los Angeles, Orange, and (to a lesser extent) Ventura counties this increase will primarily be internal population growth, occurring in older, built-out communities whose population density will also rise. In contrast, population growth in San Bernardino and Riverside counties will stem from both natural internal growth and from in-migration, increasing two-county population from 3.2 million in 2000 to a projected 5.6 million in 2020.15 2. "Smart Growth" As the growth occurs, San Bernardino-Riverside counties and their cities, like the rest of Southern California, will be forced to confront the regional realities of looming constraints on water supply and solid waste disposal (landfill) capacity, as well as rising pressures on transportation systems. Recognizing these impending problems, there is growing discussion among policy makers of the desirability of adopting so-called "smart growth" practices that seek to use resources more efficiently through greater recycling of water and solid waste, along with infill development of new housing. However, instituting smart growth practices in communities, industry, and among consumers is likely to be a challenge, given ever-increasing need for new housing throughout Southern California, coupled with resistance to denser development. Several studies were released in 2002 that document a severe housing shortage in the state, pointing to the immediate need to construct new housing, particularly for low-income residents.16 At the same time, another report (released in October 2002) asserts that the Inland Empire has the most severe sprawl problem in the United States - a condition resulting in substantial part from demand for traditional low- density Southern California housing development. 17 15Sprawl Hits the Wall: Confroming the Realities afMetropolitan Los Angeles, Southern California Studies Center. University of Southern California, 200 I. 16California Budget Project, Locked Out 2002. See WW\\' .cph.org. 17 Measuring Sprawl and Its Impact, http://smartgrowthamerica.com; Los Angeles Times, "Swallowed by urban sprawl: relocating to Inland Empire puts people in the midst of what they fled. researchers, find." October 18. 2002. 19 e Given the cross-pressures of acute housing need versus apparent consumer preferences for_ _ decentralized construction, it remains to be seen how quickly or to what extent smart growth controls will take root, particularly in the Inland Empire. Ultimately, appropriate State policies and incentives may be necessary to guide, cajole, or compel local govemments into employing smart growth strategiesl8 - provided State government has the will or ability to enact such legislation. 3. Rising Housing Costs - Commuter Work Force A contributing factor to smart growth challenges in the Inland Empire has been the emergence of the region as the home of a substantial commuter population, a consequence of the long-term rise of housing costs in the Los Angeles-Orange County area. Prior to the 1970s, the Inland Empire's work force largely was employed within the region. But since then, Riverside-San Bernardino counties have become something ofa bedroom suburb of the coastal counties as people employed there have been unable to afford housing, and have moved east to take advantage of housing prices in the Inland Empire which currently average about $200,000 less than in Los Angeles and Orange Counties. e Today, some 300,000 of the Inland Empire's approximately 1.6 million workers commute west 20 miles or more to generally better-paying jobs than are available locally. This development has had two negative consequences: traffic and commuting times on Inland Empire freeways have been rising, while the region suffers a kind of "brain drain" as substantial numbers of what are believed to be skilled, educated people commute west for work_ The upside is that a growing population of educated workers is gradually improving the region's capacity to create and attract higher-wage work. If and as such employment actually takes root on a significant scale, it should begin to draw commuters off the freeways into local jobs. At the same time it should begin to elevate regional incomes and prosperity. 4. Defense Downsizing and Manufacturing Industry Migration For all of Southern California, the pivotal economic event of the 1990s was the abrupt post-Cold War downsizing of the aerospace industry that had fueled economic growth since World War II, and the regional adjustment to the ensuing loss of high-wage defense jobs and related base closures.19 The trauma of the event has yet to be transcended. As 2000 Census data show, median income in Los Angeles County fell 6.7 percent during the decade (compared to growth of 21.5 percent in the 1980s), a direct consequence of defense downsizing, which eliminated some 85,000 high-wage manufacturingjobs20 In the Inland Empire the major blow came from base closures, including Norton AFB in 1994 and the shock of losing its 10,000 jobs. 18The role of state government in instituting smart growth approaches is addressed in The Regional City: Planningjor the End of Sprawl, Peter Calthorpe and William Fulton, Island Press, 200 I. 19Regional Comprehensive Plan and Guide, Southern California Association of Governments, 1996. e '""Income Drop in '90s Cut a Broad Swath, Data Show," Los Angeles Times, August 27, 2002. 20 e e e On the positive side, in the wake of the defense cutbacks, Southern California has seen a proliferation of new, small companies in high tech and media-related industry sectors. Concentrated at the present time in the coastal zone, the technology-industry trend is fueling an exodus of older manufacturing activities like furniture-making and plastic injection molding into the less expensive Riverside-San Bernardino area21 Migration oflight manufacturing to the Inland Empire is expected to continue for some years to come, improving the region's job base and income levels as a result of the higher relative wages of manufacturing employment. 5. Growth of Logistics and Warehousing Even more significant for the Inland Empire than growth of manufacturing has been its emergence as a center for warehousing and logistics, evidently the "highest and best use" of its available land and the basis of its "regional advantage." The growth of warehousing/logistics is tied to the rising importance of the Los Angeles-Long Beach harbor complex for U.S. - Pacific Rim trade. Warehouse development has been accelerated by construction of the Alameda Corridor, a below-grade rail bed from the ports to the rail yards in Los Angeles, completed in 2002. Over the next decade, an Alameda Corridor East is to be built from Los Angeles to Colton Junction next door to San Bernardino on the city's south side, to facilitate flow ofrail-carried goods to and from Southern California. At present, the Inland Empire's warehouses are concentrated mainly in the area around Ontario airport southwest of the junction of Interstates 10 and 15. However, new ones increasingly are being constructed farther east, in Fontana between Ontario and Colton, and it is anticipated that pressure will grow to also build them in San Bernardino, where a regional distribution center for the Kohl's retail chain was erected in 2002. Employment-wise, warehouse development is a mixed blessing: it provides jobs and property tax revenues but consumes large amounts ofland while retuming a low ratio of jobs per square foot. Nor are wage rates generally comparable to manufacturing, although they appear to be higher in more sophisticated, automated warehouses. Whether warehousing in fact is the "highest and best" use of San Bernardino's available commercial property is a point of debate among City officials. Their preference would be for more manufacturing and technology-related industry and employment, if it can be attracted or cultivated through local startup businesses. C. LOCAL & REGIONAL ECONOMIC DEVELOPMENT RESOURCES San Bernardino and the larger county and Inland Empire region have a variety of organizations and groups, both public and private, to serve as resources for economic development efforts. I. Municipal Agencies First and foremost in importance as an economic development resource is the San Bernardino Economic Development Agency, a combined redevelopment and economic development organization that offers an array of technical assistance, land assemblage, loan, and related programs to promote business retention, expansion, and attraction and real estate development. '11Manufacturing in the Los Angeles Five-County Area, Los Angeles County Economic Development Corporation, September 2001. 21 e e e In its role as Redevelopment Agency under state law, the Economic Development Agency . manages designated Redevelopment Project Areas in the city, of which there are 11 (see map p. 11). Services and capabilities are summarized in Attachment 1. A second municipal agency important to economic development is the San Bernardino Employment and Training Agency (SBET A), which is responsible for training and placing un- and underemployed residents in jobs. SBET A provides for adults job training, dislocated worker training, summer youth training and youth job training, assistance for older workers, and assistance with education linkages. SBETA contracts with local schools and public and private organizations to train individuals, and then places them. Other City agencies directly or indirectly important to economic development are: . The Department of Development Services, which is responsible for planning, zoning, and building and public works maintenance, construction, and capital improvements; . Code Enforcement, which regulates compliance with residential and commercial property codes, a vital need given the city's blight problems and the deterrent to development posed by blight and its resultant negative community image. 2. County Organizations As county seat, San Bernardino is host location of many key County government offices. Of particular importance among these is the County's Economic and Community Development and Public Services Group, responsible for countywide economic development, redevelopment, and community development functions, to include workforce investment. The County is generally prohibited from spending federal or other funds within the City limits. However, County and City economic development officials and staff interact with and work together in many formal and informal ways (a County Workforce Investment manager participated in preparing this CEDS). Thus, City and County staff involved in economic and community development often are able and willing to serve as resources for each other. Also to be noted, the County has prepared an approved CEDS for San Bernardino County. This document (cited previously) has been utilized in the preparation of the present plan, which is intended to be compatible with the County's CEDS. 3. Joint Powers Authorities As stated before, two joint powers authorities (JPAs) have been created to manage redevelopment of former Norton Air Force Base and San Bernardino International Airport. Although airport development has sometimes been complicated by the involvement of multiple government authorities in decision-making, staff of both JP As work closely with the City of San Bernardino, particularly its Development Services Department, in the planning and approval of commercial development on the property. The JPAs have provided a forum for metropolitan- wide discussion and coordination of airport development, given the representation on their governing boards of elected representatives of the member local governments. 22 e e e l 4. Higher Education Institutions San Bernardino is home to two higher education institutions: California State University, San Bernardino (CSUSB), and the San Bernardino Valley Community College District, which includes San Bernardino Valley College (SBVC) and Crafton Hills College located in Yucaipa next door to San Bernardino. In addition, several other universities are close to the city. University of Redlands, a private college, is in the adjacent town of Redlands immediately east. Loma Linda University Medical Center is in Loma Linda along San Bernardino's south border. Twelve miles west is the University of California, Riverside. Like colleges and universities across the nation today, all of these institutions are trying to become as engaged as they can in local economic and community development efforts. San Bernardino Valley College is particularly active in efforts to train residents for work in technical and production positions in local businesses, on its own and as part of the statewide EdlNet Program. Cal State San Bernardino, which has a College of Business and Public Administration, focuses on managerial and professional education, both in degree programs and through its College of Extended Leaming, which provides specialized training programs. In addition, CSUSB has established an entrepreneurship center and a technology transfer program which both aim to increase local entrepreneurial and small business creation and growth. Although University of Redlands, Loma Linda University, and UC Riverside have not generally been as active as the other two schools in San Bernardino economic development, they do participate in regional efforts that affect the city (see discussion below). In addition, some of their faculty or other staff have rendered valuable service to various local community-betterment efforts, commonly on a voluntary basis. 5. Local Private Groups San Bernardino has a number of private organizations or groups that play some role in economic development or related activities. These include the San Bernardino Area Chambers of Commerce, and the Black and Hispanic Chambers of Commerce. Also, as discussed previously there are some 40 active neighborhood associations that are vital to residential blight abatement efforts. A non-profit organization focusing on housing needs, which has worked closely with both Neighborhood Associations and the City and Economic Development Agency, is Neighborhood Housing Services of the Inland Empire (NHSIE). Among other services NHSIE rehabilitates housing for sale to moderate-income citizens and provides a variety of training programs relating to home ownership and maintenance. Another important private group in San Bernardino is a non-profit local advocacy organization named Inland Action, which consists of approximately 60 prominent local business people and a small number of elected officials. Formed in the early 1960s to preserve Norton Air Force Base as an operational installation, Inland Action's mission ever since has been to identify significant economic and legislative concerns of San Bernardino and pursue ways to address them. Besides Norton renewal, Inland Action's focus has tended to be on transportation and revitalization of the downtown area. 23 . . . 6. Regional Agencies and Groups The Inland Empire has a number of regional organizations and groups whose functions affect city economic development in varying ways. The most important of these entities is the San Bemardino Area Govemments (SANBAG), the local transportation-planning agency. SANBAG is responsible for planning and coordinating regional road and rail system development. It also allocates federal and state transportation dollars to local agencies. Among other services to San Bernardino, SAN BAG has contributed to the fund established to rehabilitate the Santa Fe Depot. Another regional group, responsible for marketing the region to attract business, is the Inland Empire Economic Partnership (IEEP). This is a dues-based, public-private collaborative whose members include both county governments and some of the municipalities from both counties (including San Bemardino), along with a number of higher education institutions and businesses. IEEP also oversees a regional film commission and tourist bureau, a state-funded regional technology alliance intended to support development oftechnology industry, and a Small Business Development Center located in Riverside, among other functions. As a voluntary organization lacking political authority over member agencies, IEEP has no power to make and implement policy, but it can serve as a forum for developing common agendas to benefit the region, such as mitigating city-versus-city rivalry over businesses. The City of San Bernardino is also an active member of the League of Cali fomi a Cities. The League provides information and advocacy regarding legislation, education, legal activity, and other information specific to cities' top concerns. City of San Bernardino councilmembers serve on the Leagues' Inland Empire Division Legislative Task Force and on the Housing, Community, and Economic Development Committee. D. ENGAGEMENT OF THE COMMUNITY IN ECONOMIC PLANNING Three previous City planning efforts involving community participation have provided the foundation for the present CEDS. These are: . The Empowerment Zone/Enterprise Community application effort: spring - fall 1998 . Development of the Big-Industry Growth (BIG) strategy: summer 1998 - spring 1999 . The City of San Bernardino General Plan update: spring 2002 - fall 2003 I. Empowerment Zone/Enterprise Community (EZ/EC) Application Shortly after assuming office in March 1998, San Bernardino Mayor Judith Valles directed the Economic Development Agency to prepare an application for competition for a ten-year federal Empowerment Zone/Enterprise Community (EZ/EC) designation, to be awarded by the Housing and Urban Development Administration commencing in 1999. An EZ/EC designation for San Bernardino would have bought $10 million annually in federal funding ($100 million total) to 24 " e e ,. carry out a decade-long community-based strategy for urban reinvestment, job-creation, and local program development and implementation. By federal mandate, EZ/EC applications must be prepared through a process of community- based workshops, analysis, and strategy-setting, involving as large and representative a group as possible of community stakeholders. Over 200 community members participated in preparing San Bernardino's EZ/EC application. Their role is described in the application document: 'Through the spring and summer following the Mayor's directive...to prepare an EZ/EC application, an array of community-based groups and organizations was mobilized to conduct the myriad discussions, meetings, and workshops required to assess the community's weaknesses, strengths, and opportunities and to develop strategies to address them. These groups included San Bernardino's 'Neighborhood Associations'; local health and human services organizations and groups, including hospitals, churches, and faith-based groups; business associations; various governmental entities from local, state and federal levels; and education institutions. The participants were formed into a number of stakeholder groups and subcommittees to perform the various analyses required for preparing the actual EZ/EC strategy....A Stakeholder Subcommittee selected the boundaries of the nominated Empowerment Zone, pursuant to the criteria of the EZ/EC grant."n The area selected for the Empowerment Zone was on San Bernardino's west side, in addition to a non-contiguous "developable site" at San Bernardino International Airport. The evaluation of the state of the community and its goals and priorities for revitalization - the articulation of the desired outcome of the Empowerment Zone a decade hence - were expressed in the EZ/EC vision statement, which is reproduced in Appendix 2. Toward that vision, the EZ/EC application outlined a strategy based on community-based action in four broad categories, for each of which specific programs were enumerated. In order of presentation in the application, the four strategic categories were defined and titled as follows: (I) A New Economy for San Bernardino: Business and Job Creation (2) Decent Housing, Safe Neighborhoods for the Empowerment Zone (3) Health and Well Being (4) Education for the Future Community The goal for the first, "new economy" category was to increase business and employment opportunities in the Empowerment Zone. Among the economic development programs proposed were: . Creating a City Hall-based "Business Support Network" e "City of San Bernardino, Application for an Empowerment Zone/Enterprise Community Designation, October 1998, p. ii. 25 e . Pursuing large-scale commercial and residential blight abatement in the EZ/EC to create a more attractive business climate. . Identifying potential infrastructure projects for EZ/EC grant support. As the EZ/EC application and the Business-Industry Growth (BIG) strategy (see next section) were being developed during the same period and involved some of the same individuals, there was some cross-fertilizing of ideas and initiatives in the two efforts. The EZ/EC application made direct reference to the BIG plan, noting that "Regardless of whether the City is designated an Empowerment Zone, it must pursue a long-term strategy for economic renewal. The resulting citywide plan is called the Business-Industry Growth strategy, or "BIG"".[It] seeks to cultivate growth of 'production businesses,' i.e., manufacturers and service firms that export output to state, national and global markets, as well as 'clustering' or concentration of a specific industry or industries in San Bemardino" (p. vii). Although San Bernardino was not awarded an Empowerment Zone designation, the community- based community assessment and goal-setting which came from the application process influenced the development of the BIG plan and some of the priorities that were defined in it. As discussed below, efforts to address some ifnot all of these priorities have been carried out under the umbrella of BIG. 2. Business-Industry Growth Strategy e At roughly the same time that the EZ application effort commenced, Mayor Valles also convened a Business Advisory Council (BAC) oflocal business leaders to develop a comprehensive economic strategy for the entire City (see Attachment 3, list ofBAC members). Between May and October 1998, the BAC met approximately half a dozen times in two-hour working sessions to deliberate community economic and related problems and identify ways to begin addressing them. . As indicated above, the fruit of the BAC's work was a plan dubbed the Business-Industry Growth strategy, or BIG. A first draft of the BIG plan was completed by the BAC in October 1998, then revised and developed further for formal adoption by the Common Council as the City's economic strategy in April 1999.23 In preparing the plan, the BAC drew upon previous studies, in particular a consultant report with recommendations prepared for the Economic Development Agency in 199524 Analysis and specific priorities established in the EZ/EC application also were incorporated. In the same spirit as the EZ/EC document, BIG recognized the interwoven character of San Bernardino's economic challenges. In reflection of this interconnectedness, the BIG plan was organized around a set of seven elements: . Business and industry 23City of San Bernardino. Business-Industry Gro"1h Strategy. April 1999. e "San Bernardino Economic Development Agency, San Bernardino Economic Development Strategy, Final Report, 1995. 26 e . City government . Marketing and publicity . Downtown renewal and promotion . Housing . Community appearance and quality oflife . Colleges and universities e e Particular economic revitalization needs emphasized in BIG were: . Expanding the city's industrial base and manufacturing-related employment . Promoting export-oriented private-industry "clusters" where opportunities exist . Improving City Hall processes so as to be more "business friendly" . Checking and reversing blight of residential and commercial areas Within each of BIG's seven elements, a set of initiatives was formulated to begin pursuing revitalization efforts. A total of 20 initiatives was established, an average of about three per element. From 1999 onward, efforts were made to achieve as much progress as possible on the BIG initiatives, given limited resources available. Attachment 4 summarizes the initiatives and their implementation status. As can be seen from the table presented there, some progress has been made on most, ifnot all of the initiatives. However, it has not been possible (again owing to lack of available resources) to evaluate impacts of these implementation efforts. Ultimately, the contribution and impact of BIG has been to articulate a specific understanding of San Bernardino's economic needs and prospective solutions which has influenced subsequent City and EDA economic development-related efforts, and which has been incorporated in the present CEDS. Of particular note, BIG has contributed to institution of an ongoing process- improvement employee empowerment program in the Development Services Department (called the "Winning Team" program), and the creation in 2001 of the cross-departmental Beautification Action Team (BAT) to develop a long-term strategy for combating and reversing blight. 3. General Plan Update Under state law, San Bernardino like all California cities is required to prepare a periodic update of its General Plan, which governs land use in the city through zoning standards. As part of the update process, opportunities for community participation and input are required. In addition to holding community meetings, the plan must be approved by the City's Planning Commission followed by the Common Council, in public meetings that are noticed in advance. The City's last General Plan update was completed in 1988. The present General Plan update effort commenced public meetings in January 2002 (see Attachment 5, Community Participants in General Plan Meetings). An initial workshop with the Common Council, City and Economic Development Agency staff, and community stakeholders 27 e e e to explain the planning process was followed by a series of four community meetingS.-held in different locations, attended by a total of approximately 60 residents. Additionally, a workshop was held with representatives ofthe business community to solicit their views and record their concerns. In preparing the new General Plan, the City's Development Services Department has been able to make use of previous planning documents including BIG, as well as shape the plan to accommodate the new development opportunities facing the city described previously (e.g., Lakes and Streams, Santa Fe Depot project). For the present General Plan, a number of special elements are being prepared. These include the following: . University District Specific Plan . Tippecanoe Master Infrastructure Plan . Arrowhead Springs Specific Plan . Santa Fe Depot District Specific Plan Elements related to these plans may be appropriate projects for consideration for CEDS funding in the future. 4. CEDS Committee To prepare the present plan, a CEDS committee was formed in the summer of 2002 (see list of Committee members, p. I). Consisting of community members, most of who had participated in creating the BIG plan, and officials of the City and Economic Development Agency, the Committee reviewed previous City planning documents as well as the requirements for preparing a CEDS. E. SUMMARY The essential point to derive from the preceding analysis is that San Bernardino is an older Southern California city that seeks to restore its former economic vibrancy and has promising opportunities to do so. As a community located inland from the Los Angeles-Orange County area in the Inland Empire sub-region, San Bernardino will be in the path of the economic growth which will be occurring in Southern California over the next 20 years. It is likely to become a hub oflogistics and transportation-related activity, and possibly also light manufacturing industry which is now migrating inland from Greater Los Angeles. As part of these industry trends, the city can anticipate becoming the target of an increasing level of business investment and migration in the next five to seven years (2003 - 20 I 0) as industrial space in the west end of San Bernardino county fills up and growth must come farther east, a process already well along. Likewise, the community can anticipate substantial growth in its population and housing stock. In attracting and generating its desired share of future growth, San Bernardino must overcome several great challenges. One is the extensive residential and commercial blight that has arisen in various locations ofthe city. There is no question, based on comments trom outside businesses and investors evaluating the city, that arresting blight and improving physical appearance is vital to attracting the kind of high-wage industry the community desires and needs. 28 It tit e A related challenge is to prepare developable land with necessary infrastructure so that property can be developed cost-effectively. A variety of important projects have been launched or are being planned which offer the potential for the kind of change that can spark overall transformation of the local economy. These initiatives include the Lakes and Streams Downtown Revitalization Project; the Santa Fe Depot restoration; the development of San Bernardino International Airport as a transportation- industrial hub; the annexation and development of the historic Arrowhead Springs resort; and encouragement of technology and related industry around Cal State San Bernardino. In conjunction with the containment and reduction of blight, these projects represent the focus of San Bernardino economic development in the next decade. It is a purpose and ambition of this CEDS to help bring these opportunities to fruition. 29 e e e II. SAN BERNARDINO CEDS VISION AND GOALS Based on the analysis presented in the preceding pages, the following vision and goals are established for the CEDS: A. VISION San Bernardino's CEDS is intended to increase availability of higher-wage industrial and export- oriented private-sector employment in the community, the key to raising incomes. In pursuit of these employment targets, the plan is also designed to promote transformation of the city's housing stock through rehabilitation of existing deteriorated housing and attraction of new housing, both of which are essential to reduce excessive absentee-owner and housing rental rates and stabilize neighborhoods with long-term owners and residents. Finally, the CEDS aims to help reverse, and ultimately eliminate blight in neighborhoods and commercial areas, an imperative for making San Bernardino attractive for local reinvestment and for new investment from outside. 8. GOALS The City will undertake appropriate efforts designed to achieve the following six CEDS goals by or before the end of the next decade (2003 ~ 2013). Goals are listed in general order of priority (note: rationale for these priorities is found in the pages of the report shown in' parenthesis at the conclusion of each goal statement): GOAL 1: Increase industrial and other export-oriented private-sector employment to between 5 - 10 percent of the city labor force (see pp. 7 - 9). GOAL2: Maintain or increase current levels of public agency and health care employment (see pp. 7 - 9). GOAL 3: Increase median household income so that it equals the median household income of San Bernardino County (see p. 14). GOAL 4: Increase the home ownership rate so that it equals the prevailing County home ownership rate (see p. 14). GOALS: Reduce blight by at least 10 percent of its present (2003) geographic area (see 4 25 p. 1 ). GOAL 6: Maintain a CEDS committee that will meet at least once annually to review and advise the City on preparing the annual update ofthe CEDS and continuing its implementation (note: required by Economic Development Administration). 25 Analysis ofhlight currently underway will make it possible to evaluate the impact of City blight-abatement efforts and to identify whether or not blight is being reduced (see footnote no. 10). 30 e e e In addition, it is the ambition of this CEDS to make possible achievement of the following long- term goals within 20 years (by 2023): GOAL 7: Increase San Bernardino median income so that it equals or exceeds median household income for the five-county greater Los Angeles area (see pp. 14, 18 - 21). GOAL 8: Increase the City's home ownership rate so that it equals or exceeds the state home ownership rate (see pp. 14, 18 - 21). GOAL 9: Reduce blight in the city's residential and commercial districts to less than 20 percent of its present (2003) geographic area (see pp. 14, 18 - 21). C. INTERRELATIONSHIPS BETWEEN GOALS In terms of the effect that achieving each of these goals will have on the development potential of the City and its underlying economic problems, the following general statements may be made: . Increasing the level of industrial and other export-oriented private-sector employment (Goal 1) will serve to increase median income (Goal 3), and should in turn help to eventually increase home ownership rates (Goal 4). . Bolstering the economic vitality of the City (effects of Goals I and 3) should help to maintain or expand government employment (Goal 2), by reducing incentives to relocate government facilities to more economically attractive communities. . If and as the City succeeds in attracting medical device maker companies (an industry recruitment target), the location of such firms in San Bernardino should help bolster existing health care employment (Goal 2) by building an image as a health-care industry center. . Rising incomes/wealth that should result from making progress on Goals I - 4 should in turn increase value of housing stock, housing investment, and resources available to reduce blight. . Accomplishment of Goals 1 - 5 between 2003 and 2013 will help generate the necessary momentum to achieve Goals 6 - 8 over the course of the following decade (to 2023). 31 e e e III. CEDS ACTION PLAN This section presents an Action Plan for implementing the CEDS. The Action Plan contains a set of "Guiding Principles" and 14 initial Initiatives designed to support the CEDS goals that were presented in the preceding section (Goals related to Initiatives are shown in parenthesis). Specitic projects related to the different Initiatives are listed in Section V following. This is a first-year Action Plan. In preparing it, it has been assumed that future updates will becopme more detailed and extensive as (a) projects are implemented and begin taking effect, and (b) the CEDS becomes increasingly institutionalized as a City planning and policy document. Some of the first-year initiatives outlined below will be carried on in future years. A. GUIDING PRINCIPLES In pursuing the CEDS vision and implementing the Action Plan, the City will act in accordance with the following guiding principles: . "District" develooment: Seek to stimulate and guide heightened levels of development within a set of priority "districts" whose revitalization or enhancement will help promote the economic vitality for surrounding areas and thereby the entire community; . Industry clustering: Encourage "clustering" (concentration) of particular industries and related and supporting types of businesses, as much as possible building upon existing and potential employment nodes (e.g., transportation and logistics; medical device manufacturing), but also remaining open to other industries if/as opportunities emerge; . Manufacturing and technologv industries: Give priority to attracting and developing high- wage-paying manufacturing and technology industries; . Partnershios: Collaborate with local public and private organizations and leaders, community groups, and educational institutions in order to tap and involve the full range of resources, energies, and abilities available in the community; . Re!!ional aooroach: Coordinate development efforts with neighbor municipalities and jurisdictions to help ensure that CEDS initiatives make full use ofregional advantages and also benefit the region as well as San Bernardino; . Citizen en!!a!!ement: Involve residents and community members to the fullest extent possible in planning, developing, and implementing CEDS-related initiatives and programs, to help ensure that they reflect the will and need of the community. B. INITIATIVES The following Initiatives are established for the first-year CEDS Action Plan (Initiatives likely to be continued in subsequent years are indicated by M-Y): 32 e e e 1. Identify and collect data necessary to report evaluation measures (ratio trend and project indicators, discussed in Section IV following) for monitoring progress of implementation of the CEDS (Goals 1 - 9; M-Y). 2. Establish the following general priorities for development and job growth for City/EDA economic development efforts (Goals 1,2; M-Y): Priority 1: Manufacturing (including medical devices) Priority 2: Transportation Priority 3: Commercial - Back Office Priority 4: Regionally-serving retail Priority 5: Health care Priority 6: Government (especially state and federal) Priority 7: Warehousing Priority 8: Technology and related professional/engineering services Internal documents and plans are to be amended to specify these targets; economic development staff will review current programs to determine extent to which Priorities I - 7 already are being pursued. 3. Complete BAT mapping analysis of blight to determine extent and locations of blight, to include ranking of areas in terms of severity of blight (Goal 5). 4. Complete updating of the General Plan and forward to Planning Commission and City Council for adoption (Goals 1 - 5). 5. As part of the General Plan update, commence implementing the following plans/projects and report status of implementation for the second-year CEDS update (Goals 1,3,5; M-Y): . Tippecanoe Master Infrastructure Plan . Santa Fe Depot District Plan . Arrowhead Springs Master Plan . University District Plan . Stadium Business Park Plan 6. Review status of the City's economic development "streamlining system" (Development/Environmental Review Committee/DERC; Economic Development Action TeamlEDAT; Office of Small Business Liaison; Business Support ProgramlBizNet) and make recommendations for continuing, modifying, or eliminating elements (Goals 1,2) 7. Review number ofland development issues that require Planning Commission approval of conditional use permits, with the goal of reducing the need for Planning Commission approvals (Goal I ). 8. Continue discussions with BNSF railroad to expand their intermodal facility at their existing location (Goal 1 ). 33 e e e 9. Inventory locations/properties suitable for construction of new industrial space to house new light and medium industry; review zoning to determine whether zoning changes are needed to facilitate industrial development for (Goal I ). 10. Review current economic development outreach and communication programs for industrial and manufacturing recruitment to determine how programs should be altered or expanded (Goal I, 3). II. Encourage IVDA, SBIAA, and Hillwood Investments to identifY "manufacturing-related activities or capabilities needed at San Bernardino International Airport (e.g., storage with docks, refrigerated storage for food, flowers and other perishables, freight consolidators and Customs Inspection with holding areas) and discuss how they and the City/EDA can collaborate to attract such investments (Goal I; M-Y) 12. Inventory needs and identifY feasible steps that may be taken to expand the scale and impact of the various housing and home ownership programs offered by the City/EDA (Goal 4). 13. IdentifY initial resources that can be dedicated to the SAT to enable it to commence organized blight-abatement efforts (GoalS). 14. Act on appropriate opportunities to do any or all of the following in implementing the CEDS (Goals I - 6; M-Y): . Utilize partnerships with local public and private organizations and leaders, community groups, and educational institutions; . Coordinate efforts with neighbor municipalities and jurisdictions; . Involve residents and community members. 15. IdentifY sources of "Environmental Justice" grant funding that might be pursued to assist in pursuing home-ownership, housing restoration, and blight-abatement priorities (Goal 4, 5). 34 e e e , IV. CEDS EVALUATION This section explains the assumptions, approaches, and indicators (ration trend and project indicators) that will be used to evaluate progress in implementing the CEDS. A. EVALUATION ASSUMPTIONS In general, measures used to evaluate an economic development strategy can only provide indication - as opposed to conclusive evidence - of any impacts of that strategy. This is so because private-sector economic processes like job-creation, business fonnation or relocation, or expansion of business revenues are all things over which municipal government has only limited influence. Rarely can local government policy and strategy actually cause specific types of industry growth to occur. At best, they may facilitate a desired type of growth through appropriate goals or practices, e.g., identification of types of industry deemed suitable for a community and development of appropriate zoning and infrastructure to support targeted industries; ensuring that local regulatory practices take feasible account of business needs. In the case of the San Bernardino CEDS, the primary purpose ofperfonnance measures will be to provide indication to the City and the CEDS committee about whether or not efforts carried out under the umbrella of CEDS appear to be advancing CEDS goals. For instance, are manufacturing employment or median income increasing, or is blight being reduced? While the "Master Indicators" defined below will not be able to measure conclusively whether CEDS-funded initiatives are having desired effects, the Project Indicators will be somewhat more definitive in the sense that projects will have explicit (stated) purposes, costs, and schedules, which will be evaluated/measured following completion of implementation. Every feasible effort will be made to provide quantitative or other tangible measurement of the effect of projects upon the CEDS Goals they are intended to support. B. EVALUATION STRUCTURE - CEDS COMMITTEE A CEDS committee, consisting of community representatives and City and Economic Development Agency staff, will convene no less than once annual1y to review CEDS status and advise the City on changes that should be made in the plan and related efforts. The City will have responsibility for col1ecting and reporting data and infonnation to evaluate progress in implementing the CEDS, as wel1 as prepare annual updates of the plan. C. PERFORMANCE INDICATORS: RATIO TREND AND PROJECT INDICATORS In the context of the present plan, ratio trend indicators are evaluation measures designed to monitor progress made on CEDS Goals. These are quantitative measures that will use data from the year 2000 (2003 for blight) as baseline for monitoring multi-year trends. Project indicators are measures related to specific projects that will involve both quantitative and qualitative indices as appropriate or available. 35 . . . , 1. Ratio Trend Indicators Five ratio trend indicators will be utilized to measure progress toward CEDS goals. Change in Master Indicators will be reported annually as part of each CEDS update. GOAL 1* GOAL 2** %Industrial emolovment Total city employment %Govemment/health care emolovment Total city employment .. SectlJrs to be included ('tee Table3. p. 8) Rubber & plastics Furniture & fixtures Chemical & allied products Transportation equipment Industrial machinery & equipment Miscellaneous manufacturing Stone. clay & glass products Paper & allied products Apparel & other textile products Textile mile products Electric & electronic equipment Primary metal products Instruments & related products Lumber & wood products **See Table 2, p. 7 GOAL 3 GOAL 4 City median household income County median household income City homeownershio rate County homeownership rate GOAL 5*** 2003 % of blight 2008 % of blight *** The 2002-03 blight survey will be repeated in 2007-08 and results compared 2. Project Indicators Project indicators will include and report the following elements: . Project name and brief description . Goal project supports . Narrative explanation of how project supports goal . Actual to budgeted cost . Scheduled and actual completion date . Quantitative project impacts (as relevant) . Other aspects as relevant 36 e e e V. PROJECTS This section presents a tentative list of projects suitable for CEDS funding which support one or more of the Goals and Initiatives outlined in preceding sections (Goal and Initiative indicated in parenthesis) : I. University Parkway: Minor striping and signal timing improvements to existing operation, and widening of the south side of University Parkway between Hallmark Parkway and 1-215 Freeway Southbound On-ramp to add an exclusive right-turn lane from University Parkway Eastbound onto 1-215 Freeway Southbound On-ramp. Estimated cost $6000. 2. Southside of University Parkway: Converting the "signal controlled right-turn lane", which would require widening the 1-215 Freeway Southbound On-ramp to provide sufficient merging distance for free flowing right-turn traffic. Estimated cost $200,000 to $600,000 (depending on the alternative approved by Caltrans). 3. 1-215 Freeway/University Parkway On-Ramp Loop: Ultimate goal: constructing a loop ramp from Westbound University Parkway onto Southbound 1-215 Freeway. With the loop ramp, the existing 1-215 Freeway Southbound On-ramp would be converted to right- turn only access from Eastbound University Parkway. Estimated cost $5,000,000 to $10,000,000 4. Santa Fe Depot Area: Install street (including sewer, water, storm drain and utility) and signal improvements needed to offset the cost of stimulating private sector redevelopment 0 the Historic Santa Fe Depot Area. Estimated cost $1,000,000. 5. Median Landscape Improvement Project at Waterman Ave. and Mill Street. Estimated cost $300.000. 6. Traffic Signal and Street Improvements at San Bernardino Ave. and Mountain View Ave. Estimated cost $200,000. 37 e e e VI. ATTACHMENTS ATTACHMENT I: San Bernardino Economic Development Agency Services Economic Develooment Agencv Business Consulting & Assistance Economic Development Action Team (EDAT) - projectfast-tracking Small Business Liaison (Ombudsman) Biz/Net - Business Support Network (information technical assistance for high-growth companies) Site location Seminars and Workshops (through Small Business Development Center, on site) Business planning Money management Labor relations & payroll tax Accounting software SBA loans Home-based businesses Financial Assistance Micro Loan Program (up to $25,000) Grow San Bernardino Fund (SBA 7a loan - $25,000 - $1 million) SBA 504 loan ($250,000 - $1 million) Blight Eradication Grants (up to $5,000) Information-Promotion (publications) Demographic data Representation at trade shows Event assistance Other Housing Programs Mortgage Assistance Programs (MAP) Redevelooment Ag:encv (for businesses located in Redevelopment Project Areas) Infrastructure development assistance Sewer connection fee assistance Storm drain fee assistance Traffic impact fee assistance 38 e e e , ATTACHMENT 2: San Bernardino Empowerment Zone Vision Statement, L998 For well over a decade, San Bernardino has been a city struggling with economic decline and the consequent demoralizing problems of crime, poverty, poor health, and decay. But now the city is in transition. The recent election of a dynamic, action-oriented Mayor, Judith Valles; the subsequent appointment ofa competent city administration; and the community-wide engagement of citizens in the creation of a vision and plan for the future is producing a major shift in thinking. For the first time in recent memory, there is a palpable belief that San . Bernardino could, once again, become "An All-American City." This newfound hope is evidenced in the Empowerment Zone motto, 'Together We Can." The path to renewal for San Bernardino lies in transforming today's conditions in the four key areas that are the focus of the EC/EZ strategy: in businesses and jobs; in housing; in health and human services; and in education. Acting decisively in these four areas, this is what we will have achieved by 2010: Through our strategy of "economic gardening" and partnership with universities to create new local industry through technology transfer, San Bernardino will have become home to a broad diversity of manufacturing and service "production" businesses that pay high wages as a result of the economic value of their goods and services, and thereby enable the city to enjoy sustained low unemployment and rising incomes. Under the leadership of our Neighborhood Associations and using our nationally acclaimed Acquisition, Rehabilitation, and Resale Program for neighborhood renewal, housing and blighted neighborhoods will have been rehabilitated and populated with new homeowner families. Health and wellness in the Empowerment Zone, whose statistics today rank among the worst in the nation, will have been dramatically reversed through the creation of a comprehensive system of individual, family, and neighborhood health support provided through the City, churches, and community-based organizations, all working in accordance with the principle of empowerment of the citizen, not paternalism for the needy. Finally, through partnerships and joint action at all levels, our educational system, from primary school to universities, will have become much more closely attuned than today to the training and skill needs of industry, thereby to provide our youth, and our students of all ages, with the educational opportunity and skills that the future economy and community will demand. .San Bernardino was designated an "All.American City" in 1976. 39 e e e T A TT ACHMENT 3: Business Advisory Council Members, 1998 - 2000 _ Jaime Alvarez, Alvarez & Associates Marjorie Anderson-Nielson, President, Anco Manufacturing, Inc. Ann Atkinson, Center Chevrolet Bob Botts, Chief Administrative Officer, Garner Holt Productions June Durr, Marketing & Public Affairs Director, Mayor's Office Mark Edwards, Mirau, Edwards, Cannon, Harter & Lewin Michael Gallo, Executive Vice President, Kelly Space and Technology Ray Gonzales, Region Manager, Southern California Edison Company Lee Hanson, Professor of Management, California State University, San Bernardino Edmard "Duke" Hill, real estate developer John Husing, Economics and Politics, Inc. William E. Leonard, Sr., real estate developer Martin Matich, President, Matich Corporation Ed Moncrieff, Executive Director, Neighborhood Housing Services of the Inland Empire Judy Penman, Executive Director, San Bernardino Area Chambers of Commerce Larry Quiel, President, Quiel Brothers Sign Co. Faron Roberts, Phoenix Information Center Donald L. Rogers, CP A T eri Rubi, Executive Assistant to the Mayor Larry Sharp, CEO, Arrowhead Credit Union Denny Shorett, President, Crown Printers Fred Wilson, City Administrator 40 A TT ACHMENT 4: Business Industry Growth (BIG) Strategy Initiatives and Status. e BUSINESS & INDUSTRY 1. BizNet/Business Support Network 2. Project on Local Industry Mapping (PUM) 3. Business Recruitment & Marketing Needs Review 4. High-Tech Action Group (HTAG) SAN BERNARDINO CITY GOVERNMENT 5. CEOTalks 6. Business Climate Survey 7. StreamlininglBest-Practices Program 8. "Competitive City" Training 9. Economic Development Action Team (EDAT) 10. Small Business Liaison MARKETING AND PUBLICITY 11. San Bernardino Infomercial 12. "Mayor's Community Update" cable TV show 13. Economic Outreach Information 14. Marketing Solicitation Materials/Marketing Package , Descri tion Prob'fam to support local businesses using information databases and market anal sis Analysis of industry structure of city and rimar indust sectors Identification of potential sectors for business recruitment Small group of local high-tech executives to advice on high-tech strate Business recruitment video Monthly community and economic affairs TO am Business spotlighting City Information 41 Status Implemented; ongoing (Economic Development Agency) Completed (1999); results utilized in establishing BizNet program Partially undertaken (1999 - 200 I); identification of ( I) transportation and logistics and (2) medical devices as recruitment tar ets Not implemented; not deemed useful at present time owing to lack of high-tech industry in city and region Conducted second half 1998 (discussions occurred with approximately 10 CEOs) Conducted summer 1999; results presented to City Council and publicized in local newspapers; subsequently utilized in "Com etitive Cit Trainin "(No.8 below) Implemented in Development Services Department commencing fall 2000; on om Implemented spring 2000 (version of the training has subsequently been adopted for statewide use by California Association for Local Economic Develo ment CALED Implemented fall 1999; has since lapsed Implemented fall 1999; ongoing Prepared summer 1998; Update will be com lete b 6/03 Commenced 1998; ongoing bi-monthly Regularly feature new and unique businesses in the Mayor's Spotlight, uarterl News of the Cit ,.. City web-site redesign (Fall 2003) ,.. Upgrade City brochure w/individual sheets for press kitslbusiness solicitations ,.. New media partner for News for the City-Business Press (3/03) ,.. Bus Shelter Ads - renewed for 14. Continued.. ... DOWNTOWN RENEWAL AND PROMOTION 15. Downtown Development Strategy HOUSING 16. Housing Strategy promoting News oj the City and other public information (3/03) , Bilingual PSAs re illegal vendors (3- 03) Identification of priorities Developed summer 1999 and approaches for revitalization Identification of priorities and approaches for rehabilitating old housing and attracting new housin UALITY OF LIFE Involve the community in blight removal efforts by fostering partnerships. COMMUNITY APPEARANCE & 17. Blight Removal and Cleanup HIGHER EDUCATION 18. Campus Leaders' Orientation to BIG 19. Project Lorna Linda University & Medical Center Technology Transfer e Briefmg on BIG to local college and university leaders with goal of recruiting campus support Program to promote technology commercialization of LL UM C medical research 42 Developed 1999 Ongoing - Newly formed apartment associations are working with established neighborhood associations to remove blight. Not implemented; but campuses have contributed to San Bernardino economic revitalization in.a variety of ways (e.g., technical advice to CitylEDA, service on committees and task forces, assistance obtainin student interns) Not implemented e e e A TT ACHMENT 5: Community Participants, General Plan Update, 2002 - 2003 Evelyn Alexander, resident Lillice Anderson, resident Dora and Freddy Avellanda, residents Tiawatha Blair, resident Gina Bothner, reporter, San Bernardino Coun(v Sun Robert Botts, Chief Administrative Officer, Garner Holt Productions Robert Brendza, [title], Burlington Northern & Santa Fe Railroad Wilbur Brown, resident Karen Brucato, resident Joe Cyventes, resident David DeMauro, Vice President of Administration, California State University, San Bernardino Lou Deetz, resident Richard Eberst, Professor of Health Science, California State University, San Bernardino Rick Fobes, resident Michael Gallo, Executive Vice President, Kelly Space & Technology Jane Ann Godiger, resident Harvey Gregory, resident Lee Hanson, Professor of Management, California State University, San Bernardino Linda Hart, resident Chris Havener, resident Sherida and Larry Heasley, residents John A Hilhnan, resident Hardy Johnson, resident Schenelle Johnson, resident Chas Kelley, resident Randy and Jennifer Kent, residents Peggy Knon, resident Amy Ko, resident Bruce Ko, resident Aron S, Liang, resident William E. Leonard, Sr., Real estate developer John and Tommie Lowe, residents Andy Lyman, resident John Magness, [title], Hillwood Investments Andie and Ginette Malenfant, residents Bob Martinez, resident 43 e e e 7 Alafona McGaw, resident Bruce McGaw, resident Gloria Merrill, resident Beth Myer, resident James Mulvihill, Professor of Geography, California State University, San Bernardino Jenny Oveilon, resident Alfred Palazzo, resident Jaime Pena, resident Judy Penman, Executive Director, San Bernardino Area Chambers of Commerce Pam Pescamilla, resident Thomas Pierce, Professor of Economics, California State University, San Bernardino Brian Prest in, resident Donald and Dorothy Resvaloso, residents Lloyd Roberts, resident Corilyn Roderick, resident James and Kandy Roe, residents Bruce Satzger, President, Community Hospital of San Bernardino Denny Shorett, President, Crown Printers William Shum, Campus Architect, California State University, San Bernardino Donald Singer, Executive Director, Inland Action Sherry Skolfield, resident Joyce Smith, resident Mary Solis, resident Freddie Spellacy, real estate agent Marcey Stanton, resident James Tate, resident Tom T immreck, resident Bill Troost, resident John A. Valdivia II, resident Angie Varela, resident Eric Vaughn, resident Kay F. Walker, resident Danny Ward, resident Scott West, resident Bardella Wilson, resident Evelyn Wilson, resident Kattie Zamanjahromi, resident 44 e e e , A TT ACHMENT 6: Reports and Works Referenced in CEDS DocumenL California Budget Project, Locked Out 2002, October 2002, See www,cpb,org, California Department of Education, 2000 - 200 I Academic Performance Index (API) GroMh Report, See http://api,cde,ca, gov!api2000base, Calthorpe, Peter, and Fulton, William, The Regional City: Planningfor the End '!fSprawl, Island Press, 200 I, City of San Bernardino, Business-Indus/ly Growth Strategy, April 1999, City of San Bernardino, Application fill' an Empowerment Zone/Entelprise Community Designation, September 1998. County of San Bernardino, Comprehensive Economic Development Strategy, 1998. Economic Research Associates, Economic Analysisfor an Update of the Land Use Element of the General Plan. Prepared for the City of San Bernardino Department of Development Services, March 2002. Fulton, William, The Reluctant Metropolis: The Politics of Urban Growth in Los Angeles, Solano Press Books, 1997. Inland Valley Development Agency, Local Agency Military Base Reuse Area application, May 1999 Los Angeles County Economic Development Corporation, Manufacturing in the Los Angeles Five-County Area, September 200 I. Los Angeles Times, "Swallowed by urban sprawl: relocating to Inland Empire puts people in the midst of what they fled, researchers fmd," October 18,2002. Los Angeles Times, "Income Drop in '90s Cut a Broad Swath, Data Show," August 27,2002 McCormack's Guides, Riverside & San Bernardino 2001, San Bernardino Economic Development Agency, 2002 City of San Bernardino Community & Economic Profile. San Bernardino Economic Development Agency, San Bernardino Economic Development Strategy, Final Report, 1995. San Bernardino Regional Water Resources Authority, San Bernardino Revitalization Specific Plan, August 2002. Smart GroMh America, Measuring Sprawl and its Impact, October 2002. See http://smartgroMhamerica.com. Southern California Association of Governments, Regional Comprehensive Plan and Guide, March 1996. Southern California Studies Center, University of Southern California: Sprawl Hits the Wall: Confi'onting the Realities of Metropolitan Los Angeles, 200 I. 45