Title
Recommendation to Accept the Economic Development Status Update and Provide Feedback Regarding Economic Development Efforts and Activities. (Base Reuse and Economic Development 10061810) [Not heard on March 18, 2025]
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The Economic Development status report provides an update on the City of Alameda’s (City) economic development efforts over the past six months and outlines planned initiatives for the next six months, with a primary emphasis on the new Storefront Vacancy Assistance Program.
BACKGROUND
Staff provided an economic development update to the City Council in July 2024. At that point City Council directed staff to return with more details on the City’s efforts to ensure the long-term vitality of the Downtown and West Alameda Business Districts, and in particular to proactively address chronic vacant storefronts. This report and presentation are an update on the first six months of the program transition as well as a look forward to the next six months.
DISCUSSION
Economic development staff are focused on achieving a program that meets the needs of existing businesses and puts forth a robust effort towards attraction of new businesses and new investment in the community. To meet these goals, staff repositioned the program to focus on four broad areas - business attraction, business retention, economic development technology and enhanced efforts to integrate Alameda Point into the broader Citywide program.
Area 1: Updated business attraction efforts
Staff is implementing new efforts aimed at attracting new companies and new investment in Alameda. This encompasses a range of efforts to help fill vacancies in the West Alameda/Downtown Business Districts and attract new companies to Alameda Point and Alameda’s business parks. To date, the following updated efforts have been put in place:
Marketing and Promotion Efforts
• Choose Alameda Website
In partnership with the Alameda Chamber of Commerce, the City is launching this new website to serve as the main platform for promoting Alameda with the goal of attracting new investment. The website will feature video testimonials from local executives about their decisions to locate their businesses in Alameda. The website is anticipated to launch in late Spring/early Summer 2025.
• San Francisco Business Times Insert
The City will continue to produce a biannual 20-page advertising supplement in the San Francisco Business Times to promote Alameda to the greater Bay Area business community and beyond. The Business Times is part of a network of 44 business journals across the country and has a circulation of 31,141 weekly print editions and 211,485 unique monthly on-line visitors. It is the major business journal in the Bay Area for news on commercial real estate, venture capital funding, major business sectors, banking, business leaders, and breaking news.
This robust, sponsored insert will be published in mid-2025. It will contain an “Alameda by the Numbers” page with key demographic figures, a map of current real estate developments, and articles highlighting Alameda businesses, key business sectors, professionals, and topics that illustrate Alameda’s comparative business advantages.
• Team California
New this year, the City joined this statewide organization as a method to conduct outreach to targeted businesses through industry-specific trade show conventions.
• Broker Engagement
The City’s commercial broker engagement program has taken various forms in the past. This year, staff is repositioning this program to get a better connection with commercial brokers representing private properties to understand and help promote vacant buildings for sale or lease in Alameda to the larger business community. This program will include broker breakfasts/lunches as well as City tours. The findings from this work can be promoted through the Team California initiative above.
Storefront Vacancy Assistance Program
Webster and Park Street businesses are a strong part of the identity of Alameda and represent an important segment of small businesses in the community. As such, helping these districts thrive and grow is a crucial part of the City’s economic development program. The City’s Storefront Vacancy Assistance Program, and the data which informs it, is described below.
• Market Evaluation and Key Findings
In order to support this work, staff has analyzed market data for Park and Webster Streets and interviewed local business owners and commercial real estate brokers in order to better understand the challenges to filling vacant properties. Key findings from this work are listed below.
• Retailers on Park and Webster identify the need for more brick-and-mortar space in order to create a critical mass of businesses. At the same time, brokers report that the increasing dominance of online shopping has reduced demand for brick-and-mortar retail space, and that demand for retail space in Alameda is driven by restaurant and service businesses.
• While the overall retail vacancy rate for the Downtown Alameda Business Association (DABA) district is relatively low (4.8 percent), given the size of the district this translates into a substantial amount of vacant retail space. These vacancies are particularly impactful when they are long-term and/or located in high visibility areas.
• Brokers report that a surplus of retail space may be contributing to the prevalence of vacancies in the DABA district. With over 1,000,000 square feet of retail space, the DABA district is over twice the size of the West Alameda Business Association (WABA) district and other comparable Bay Area retail districts.
• The market for small office space in the DABA district is strong, with a vacancy rate of 0.6 percent over more than 200,000 square feet.
• New businesses, lively events and ongoing housing construction on the west side are contributing to a sense that Webster Street is “on the upswing.” This perception is supported by the district’s relatively higher rents and lower vacancy rates.
Informed by the findings above, the economic development program has developed a new Storefront Vacancy Assistance Program. Working collaboratively with WABA and DABA, staff created a baseline database of vacant storefronts on Webster and Park Street and collected data on the current status of vacancies (e.g., whether owners had submitted permit applications recently to make improvements, how they were being marketed, etc.). Staff sorted these vacancies into four categories (Almost There, Work in Progress, Project Stalled and Unresponsive) and developed specific strategies for outreach in each category.
Please see Exhibit 1 for a summary of the Storefront Vacancy Assistance Program, including the categories, strategies, and progress to-date. Please note that this Program is a work-in-progress, and that staff are continually monitoring and refining the approach based on the information learned.
In addition to the short-term strategies summarized in Exhibit 1, staff is also working a number of longer-term strategies and systemic improvements, including:
Customized Window Clings
Staff is developing of a set of uniform, branded window clings to enhance the aesthetics of these available spaces while supporting marketing efforts. The window clings are in the design phase and will be installed later this year in vacant storefronts where owners have responded. One of the current preliminary designs is attached as Exhibit 2.
Improved Internal and External Coordination and Communication
Economic Development staff is meeting regularly with Planning and Building staff to identify any systemic barriers to new businesses receiving permits, and explore potential solutions. Staff plan to conduct monthly walk-throughs of the districts with WABA/DABA staff as well as individual meetings on-site with willing property owners to better understand property and building constraints and issues.
Facade Grant Program Repositioning
Staff are exploring whether the highly successful façade grant program could be repositioned to address small scale design or code compliance needs that may be hurdles in the permitting process. Over the last six months, staff have also visited upwards of 20 businesses as part of the Façade Grant Program, which provides important anecdotal information about the needs and challenges facing the City’s storefront facing businesses.
• Interdepartmental Coordination
Economic Development and Planning and Building staff are meeting regularly to identify any systemic barriers that may delay new businesses from receiving permits, such zoning regulations, historic preservation requirements, and the complexities of bringing older buildings up to current building codes. Staff is exploring potential solutions for storefronts categorized as “Work in Progress” and “Project Stalled”. For example, staff is reviewing the Commercial zoning district use regulations, which were adopted in the 1990s, to determine whether they remain relevant to today’s economy and effectively meet current community demand for businesses and services.
• Code Enforcement
Economic Development staff and Code Enforcement are working together to develop enhanced enforcement tools. For example, Planning and Building is updating the Master Fee Schedule to include a Vacant Building Monitoring Fee, which was absent despite an existing ordinance. Additionally, the Building Official’s work plan includes the adoption of a Property Maintenance Code, which will establish clear, citywide property maintenance standards to support enforcement efforts. These actions will enhance the City’s ability to ensure regular upkeep of vacant property in the city.
Area 2: Updated business retention efforts
Staff is implementing new efforts aimed at strengthening the relationships with the existing Alameda business community in order to better understand and address their needs. The overall goal of this work is to create an environment where existing businesses stay in Alameda to grow and thrive. To date, the following updated activities have been put in place:
• East Bay Small Business Development Center (SBDC) Contract
Working with the Alameda Chamber, the City is sponsoring one-on-one business consultations and workshops with SBDC business advisors. Alameda businesses can schedule 30-minute, no-cost in person advising sessions for the first and third Tuesdays of the month at the Chamber offices. The SBDC will also be conducting workshops in Alameda on business topics such as on-line marketing and business planning. As of early March, SBDC has met with 40 businesses, and the sessions are filled to capacity with 16 slots per month. There is a wait list to participate.
• Business Visitation Program
Staff is expanding the City’s existing business visitation program to better understand the needs of Alameda’s top companies. In addition, staff continues visiting with the City’s Alameda Point tenants who have two to three years left in their leases with the City to understand the specific needs and future plans for these businesses. In the last six months, staff has conducted seven site visits and tours with a range of businesses in Harbor Bay Business Park, the Research Park at Marina Village, Alameda Point, and throughout the City. This is in addition to the business visits conducted for the Façade Improvement Program.
• Mayor’s Economic Development Advisory Panel
Staff continue to support the Mayor’s Economic Development Advisory Panel, which has increased its regular meeting frequency to quarterly, rather than annually. The Panel most recently met on March 5 to discuss the Economic Development Program update and to provide feedback on the San Francisco Business Times insert.
• Business Surveys
The City has distributed an annual “business pulse” survey for many years. This year the survey is tailored to solicit input separately from three unique business sectors that may be facing different needs: Alameda Point businesses, the top 100 largest employers in the City and WABA/DABA businesses. The surveys will be issued in mid-March.
• Oakland/Alameda Access Project Website
The construction for this important project will require continuous one lane closures in the Webster and Posey Tubes for extended periods of time. The City is anticipating that this could have a major chilling effect for businesses affected by the additional delays and traffic. Staff is aware that these businesses will need support and are working in advance with Alameda CTC (the project sponsor) and Caltrans (the project construction lead) to enhance communication efforts and minimize impacts. Additionally, staff is preparing for enhanced marketing and communication needs in Fiscal Year 2025-26 and beyond. In advance of this, staff is creating a webpage to showcase business resources available during the construction period and to link to other parties involved in the work.
• Collaboration with the Chamber of Commerce
Staff continues to collaborate with the Alameda Chamber and Economic Alliance to enhance relationships with businesses through the following avenues:
• 12 & 12 Executive Roundtables-Every other month, the Chamber and the City co-sponsor informal discussions at noon with approximately 12 invited business sector executives, relevant business organizations, and City staff. The meetings are arranged by the six business categories for growth identified in the City’s Economic Development Strategic Plan:
1. Life Sciences
2. Clean Tech, Green Tech, and High Tech
3. Blue Tech and Maritime
4. Retail
5. Tourism and Hospitality
6. Artists and Small Manufacturers
• Business Coalitions-The City works closely with the Chamber with the coordination of three special coalitions for Alameda Point, Harbor Bay, and local Restaurant businesses. These coalitions meet regularly to share information, network, and discuss timely or relevant topics.
Area 3: Alameda Point economic development efforts
The economic development program is working to deepen relationships with Alameda Point businesses to address a range of specific, systemic issues. To date, the following efforts have been put in place to provide greater Economic Development assistance to the Alameda Point business community:
• Financial Consultant
Staff is contracting with an Alameda consultant to provide financial assessment services for Alameda Point businesses.
• Shade Structures for Spirits Alley Tenants
Staff is leading conversations with the U.S. Department of Fish and Wildlife to identify shade structure solutions for the patios of businesses on the west side of Monarch Street that are compliant with the biological opinion. Staff is contracting with a local biologist and architect to assist with this process.
• Wayfinding/Placemaking
Staff is exploring potential ways to enhance wayfinding signage and placemaking at Alameda Point. Current wayfinding has been vandalized and stolen, and staff are exploring options. In addition, with the Main Street encampments removed, staff are exploring options to activate the Main Street gateway to Alameda point to create a more welcoming environment.
Area 4: Updated Economic Development technology
Staff is exploring the following technological tools to enhance and aid economic development efforts:
• Customer Relations Management (CRM)
A CRM system can more efficiently track and monitor Economic Development activities, including interactions with businesses, brokers and other stakeholders.
• Zoom Prospector
This data subscription service will be embedded on the Choose Alameda website to assist prospective businesses with real-time information about available properties in Alameda.
• Retail Lease Trac
This subscription-based service provides information on retailers who are looking to expand and will be used as a tool for retail tenant attraction.
ALTERNATIVES
This report is for information purposes only. No action is required.
FINANCIAL IMPACT
This status report is for information purposes only with no financial impact to the City.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The City’s economic development activities are rooted in the Economic Development Strategic Plan and continue to support and move forward the strategies. It also supports the City Strategic Plan Priority to Invest in Transportation, Infrastructure, Economic Opportunities & Historic Resources, including project TIE26 to expand Citywide business economic development activities, including an Alameda Point attraction and retention program.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378, and therefore, no further CEQA analysis is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Accept the economic development status update and provide feedback and direction regarding economic development efforts and activities.
Respectfully submitted,
Abigail Thorne-Lyman, Base Reuse and Economic Development Director
By,
Dwayne Dalman
Economic Development Division Manager
Financial Impact section reviewed,
Ross McCarthy, Acting Finance Director
Exhibits:
1. Storefront Vacancy Assistance Program
2. Example Preliminary Window Cling Design