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HomeMy WebLinkAboutStaff Report 1.A 01/12/20091.A January 12, 2009 January 8, 2009 TO: Honorable Mayor and City Council,/' FROM: John C. Brown, City Manager SUBJECT: Economic Development Strategy RFP Workshop Attached, for your review, is a discussion draft of a request for proposals to prepare an Economic Strategy and associated implementation plan. Staff reviewed a variety of such RFP's issued by jurisdictions around the country, in developing the discussion draft. The attached approach provides for a single step solicitation process, where the final draft is distributed to a pool of potential respondents, responses are received and evaluated, and a contract award is made. This may be the most expeditious approach. Attached is a preliminary list of the consulting firms who would be contacted directly, in addition to publication, noticing through a clearinghouse, and posting invitations on the City's website. A two step approach, which takes longer but may net better results, is to first solicit requests for qualifications and then, based on responses, direct the request for proposals to only those firms appearing most qualified. The RFQ approach provides an opportunity to evaluate the work products of those submitting qualifications to fine tune the requested scope of work before it is distributed, to conduct background checks with previous clients before soliciting a proposal from any particular firm, and to obtain a better understanding of the cost of developing the kind of study the City wants. It also allows the selection committee to focus its efforts on proposals submitted by only the most qualified candidates. Although the attached proposal provides for the single step solicitation, staff recommends the two step process. Regardless of our approach to issuance, some of the concepts I have tried to capture in the draft are: • The work product must address each existing business sector, as well as identify opportunities to cultivate or attract emerging markets • Business retention is at least as important as business attraction • Community engagement in developing the strategy and plan is mandatory • The product must be unique to Petaluma • An economic analysis should take into account social and environmental impacts; quality of life and standard of living is important. • Strategies and recommendations for implementation must be specific, and the latter should be prioritized so that the plan can be used in a systematic manner. • The result should be a sustainable local economy that does not place disproportionate reliance on any particular business sector for its well-being. Understanding that we want to rely on the creativity and expertise of the proposing firm to propose a study that will achieve the city's goals, the attached scope is a framework rather than an all-encompassing list of tasks. I've included some project deliverables that I believe are necessary, such as an update of the retail leakage study and a comparison of the city's development policies and procedures to those of cities who have been successfiil in their economic development activities. You may want to add to, or subtract from the deliverables listed. It's important to recognize that whether a more detailed list of deliverables or less is defined at present time, respondent proposals, and subsequent negotiation with the successful proposer will dictate the final scope of work including in the professional services agreement (as well as timelines and costs, which have been purposefully left blank in this draft). I believe the more valuable discussion, and the one where consensus should be reached Monday evening is the one regarding the community's objectives for an economic development strategy. The objectives listed in the attached document are based on discussions I've had with each of you, and the comments I've heard in my discussions with various groups and individuals in the community. I look forward to amending the list, based on your direction at the end of Monday's workshop. The attached document is collaboration between the Community Development Director and me. As much of the work in the document is mine, so is the fault for any errors or omissions, any of which that are substantive can be identified and corrected during the workshop. If you have any questions in the meantime, please let me know. Request for Proposals for Economic Development Strategy The City of Petaluma is soliciting proposals from qualified consultants to prepare a comprehensive economic development strategy and implementation plan to guide the City's decision -malting relative to business attraction, retention and expansion activities that are critical to the economic stability and growth of the City. The final document should, in addition to providing an economic development strategy that is unique to Petaluma, provide' concise and executable recommendations and time and cost specific implementation measures; to support and strengthen existing local businesses, attract new and complementary businesses, and;contribute to the immediate, intermediate, and long-term environmental, social, and economic viability of the Community. Backeround Petaluma is a city of 58,000 located 50 miles north of Sari Francisco. The City is bisected by U.S. Highway 101 and is also accessible by boat from San Pablo Bay via the Petaluma River (the river carries the 3rd most commercial tonnage in the state— primarily aggregate materials to serve local and regional construction). Petaluma has two commuter rail station sites along the proposed Sonoma Marin Area Rail Transit.,(SMART) corridor and will also be served by the proposed North Coast Rail Authority (NCRA) freight hauler. The City also manages a municipal airport that currently services small craft. Petalumans enjoy an enviable quality of life. They value the preservation of the community's heritage, its unique character, and the access to the natural environment its open spaces and surrounding areas provide. They are, on the whole, educated, socially and environmentally conscious, and engaged in civic, community, and charitable affairs. Public participation in civic decision making is highly valued. The cost -of -living, and particularly of housing, are reflective of the economy of the greater San Francisco Bay area. To maintain that standard, many Petalumans must commute to employment outside the city, for opportunity and higher wages. Additional employment, and higher wages paid, for Petaluma jobs will help to increase the standard of living for Petalumans. Social and environmental benefits associated with reducing the number of coramuters are also desirable. W Petaluma has historically been a warehousing and distribution center because of its river and rail access, and more recently because of its proximity to Highway 101. Petaluma has a rich agricultural heritage; it has traditionally been a processing and supply center for local agriculture, and is still home to significant dairy and poultry processing and distribution operations, and specialty cheese producers. Recognizing, supporting, and expanding the City's agricultural base will be an important part of any economic development strategy the City adopts. On the west side of town, Petaluma's retail base is anchored by a "destination" downtown featuring historic commercial buildings and a new movie theater/retail/residential inixed use development. Major retail activities on the west side also include a factory outlet center and an auto mall, the latter of which is responsible for over one quarter of the sales tax generated in the City. The downtown boasts an impressive array of pre-1900iron-front buildings and Victorian era homes which have been the backdrop for a number;.of major films and a myriad of television commercials. Downtown merchants share a strong sense of identity, and partner with the City through a Petaluma Downtown Association (PDA) and the Petaluma Independent Business Association (PIBA). Merchants have initiated a "buy -local" program, which they would like to see incorporated in an economic development strategy. Beyond that, supporting and expanding Downtown business must be a critical part of the City's economic development strategy. The downtown area, adjacent riverfront, nearby marina, the factory outlets, and Petaluma's proximity to the Sonoma and Napa County wine regions and regional and State parks provide a destination and activities for many thousands of tourists each year, many of which come from outside the United States. Recommendations that enhance tourism and filming opportunities should also be key to the economic development strategy. On its east side, the Petaluma retail base is anchored by several 1970's vintage strip shopping centers. A "Kohl's/Pier 1 Imports/Michael's" anchored shopping center is a recent addition to the retail mix. Presently, three proposed national chain anchored shopping centers totaling approximately 900,000 square feet are at various stages of the development review process. These sites will utilize the majority of the City's undeveloped commercial lands, increasing both the economic importance of these retail developments to the community and, to sustain retail growth into the future, the need to identify viable commercial "infill" opportunities in the economic development strategy. The City has several large business parks at the north and south ends of town which encompass over 5 million square feet of office and manufacturing space. In the mid- and late -90's a significant expansion of office and manufacturing space was fueled by the rapid growth of "Telecom Valley" related technology companies, which have since experienced marked contraction in numbers and size. There are also smaller, older "industrial" parkstbathave been and continue to be suitable for start-up space. According to statistics compiled for the third quarter of 2008 by the Keegan Coppin Company, these various parks are experiencing combined vacancy rates of 16 percent for manufacturing/industrial space, and nearly34 percent for office space. According to the Sonoma County Economic Development Board4 these have been the highest vacancy rates of their kind in Sonoma County. ; Existing uses in these parks are diverse, with tenants running the gamut from medical research to microbreweries. Eliminating the vacancy rate in Petaluma's industrial parks, by capitalizing oii opportunities to grow existing tenants and site value-added neighbors, should also be key to the City's economic strategy. Despite, or perhaps because, of its economic diversity and the many unique opportunities the community and its setting provide„ Petaluma's approach to economic development has been reactive and lacking in any strategic data collection and guidance. There is no active business attraction program or related incentives, and no focused effort made by the City to retain or expand existing businesses:: In the past 5, years, however, the City has taken several, generally interrelated steps that begin to establish an informational and policy framework for a formal economic development strategy. In 2003, the City hired Thomas Consultants of Vancouver, British Columbia, to prepare a "Leakage and Sustainable Retail Strategy Study" that was accepted by the City Council in June 2004. The entire document may be viewed or downloaded at the following web link: litto://w-tivw.c itN,ofnetalunia.net/edr/renorts.litml 0 In May 2008 the City adopted a new General Plan that includes an "Economic Health" element. The element includes policies and programs related to enhancing the City's economic vitality consistent with other policy directives aimed at strengthening the economic base. The General Plan can be found at: htto://wwryv.citvofoetaluma.neUcdd/nlan-general-nlan.htm I The new strategy and implementation program should be consistent with and implement the recommendations of the General Plan. In the alternative if changes to the General Plan are, in the consultant's opinion, critical to implementing a successful economic development strategy, such changes should be recommended. Another City planning document with relevance to the proposed strategy is the Central Petaluma Specific Plan, adopted in 2003. The Specific Plan covers approximately 400 mostly under- utilized acres immediately east of the City's historic downtown commercial core and creates the potential for a significant increase in ground -floor retail and commercial opportunities in the context of intensive mixed used development. However, discussions with some developers have suggested that there may be more retail/commercial potential in the Specific Plan area than can be accommodated under local and ;regional market conditions, particularly given the other retail opportunity sites around the City. The Central Petaluma Specific Plan can be found at: htti):HNvvAv.cityofbetaluma.net/edd/cDsD.litml Petaluma also has two active redevelopment project areas. Information on the project areas can be found at:. litti):HcitvofDetaluma.net/edi-/T)roiect-ai-eas.litiiil Additional information on City budgets, Capital Improvement Programs, zoning regulations and related information are available through the City's website (-Nv),rtv.citvoliietaluma.net), or on request. to Strateev and Plan Obiectives Through this project, the City wishes to achieve the following objectives: • educate the community and decision -makers on the critical elements of a successful economic development strategy and build broad-based public support for the recommended strategy and its implementation; • Establish a vision for the City's economic future, and goals, objectives, and policies for economic development in the City that are consistent with the General Plan.'12 • create an economic development strategy that seeks to maximize social and environmental benefits, and minimizes social and environmental costs; • strengthen and expand existing businesses and each existing business sector; • further diversify the local economy to reduce.reliance on any one sector; • attract new and complementary businesses"to Petaluma; • identify and support the development of emerging markets and new business sectors; • create a sustainable economy that maximizes the use of existing land; • create a sustainable revenue stream to, finance city services to the community; • create living wage jobs; increase per capita income, and increase the standard of living in Petaluma; • create support strategies, mechanisms, and incentives to effectively implement the City's economic development strategy; • organize City functions and establish a staffing structure to effectively implement the economic development strategy; •; establish and/or strengthen local and regional economic development partnerships; •, establish the management tools necessary to measure and report on the effectiveness of the City's economic development activities. SCOPE OF WORK The City seeks the expertise of economic specialists to develop a viable economic development strategy and implementation plan, and as such will rely on the consultant to propose a study M approach that achieves the City's objectives. Nevertheless, some of the factors that should be addressed in the scope of the project, in addition to others that the consultant will propose, are: • Identify Stakeholders and insure Community involvement. Involvement of the public and private sectors of the City of Petaluma, and citizen participation, is required; • Review all pertinent planning documents, and the 2003/04 Retail Leakage Study; update and expand, as necessary, the retail leakage study; • Review all development regulations and policies and contrast Petaluma'sto'those of other cities that have been most successful in their economic development efforts; • Prepare a comprehensive economic base analysis for the City including its position within the region, and provide strategies and mechanisms for ,maintaining this information with in-house staff, • Develop an understanding of how each business sector contributes to the economy; • Analyze strengths, weaknesses, opportunities and threats (SWOT) which influence the City's economic development and for each existing and any identifiable emerging business sectors; • Analyze demographic, labor force, land, infrastructure, financing, and retail, health and public services, manufacturing, agricultural, tourism, film industry and other sector trends, influencing the local economy; • Identify strategies and mechanisms to support and strengthen existing businesses and eliminate existing retail, office, and manufacturing vacancies; • Identify key opportunities to expand and diversify the City's economic base given its size and location, including emerging industries and their potential for growth; • _.Prepare anaction-item list of priorities for the City to implement the recommendations of the economic development strategy; • Prepare a list of target industries for the City, based on the results of the SWOT analysis and on community input, to focus economic development efforts; • Identify, evaluate, and recommend incentives such as grants, loans, tax incentives, fee deferrals or waivers, enterprise/empowerment zones, etc., to support existing businesses and to attract new and emerging businesses and sectors; • Evaluate and recommend necessary regulatory and infrrastructure improvements; 1 • Prepare a list of meaningful, measurable, criteria the City can use to track its effectiveness in achieving economic development goals; • Provide several alternative strategies for achieving the type of economic development that is desired by the City of Petaluma. The positives and negatives of each strategy should be outlined carefully and a recommended strategy provided by the consultant to the City. Submittal Format Proposals should include the following: • Name of the business or organization(s), mailing address, office location(s), telephone number(s) and fax number of the primary contact for whom all correspondence would be directed. • A statement as to the objectives of the study that will demonstrate that the consultant understands the needs of the City of Petaluma in regard to this project. • Summary of qualifications. Provide a general description of the entity's history, past wort: and areas of expertise, descriptions of recently completed similar projects for comparable local governments, and evidence of positive results for those clients. • Methodology. Outline in: detail the proposed approach to preparing an economic development strategy and implementation plan that satisfies the City's objectives. Specific steps should be, called out in detail along with a schedule for each of the tasks and a proposed set of checkpoint meetings with staff, stakeholders, and decision makers during the course of the study. • Project Management. Identify the proposed project team, including sub -consultants if any;and the role of each, spelled out by task. The qualifications of each principal and senior consultants should be spelled out in this section and resumes for those people included in an Appendix. (Those who are named must continue to have a direct, hands-on role in the project, and the City may insist on Principal -level participation at every stage of the project. Any substitutions will require prior City approval). The consultant should also detail a proposed method for working with the City management and reporting progress. I o Proposed Budget. The proposed budget should be broken out by each major task within the study approach. The cost should be further broken into professional fees and expenses associated with each task. City's initial budget for this project is estimated at • Appendices. a. The resumes of professional personnel who will be working on this project. b. A list of references for which similar work has been performed. c. A list of hourly rates and charges for each. d. One or two examples of similar studies which have been successfully implemented. Proposal Submittal Please submit 7 copies of the completed proposal by to: Mike Moore Community Development Director City of Petaluma 11 English Street Petaluma, CA 94952 A copy of the City's standard Professional Services Agreement and related insurance requirements'are attached for your information. The selected consultant will be required to comply with the stated indemnification provision and all applicable insurance requirements. A current City of Petaluma business license is also required prior to the execution of the ProfessionalServices Agreement. SELECTION PROCESS Pronosal Review Team. The review team may consist of some or all of the following: City staff, outside experts, representatives of the local business community, members of other local or regional organizations, and representatives of the public. 8 1o Evaluation Criteria. Proposals will be evaluated on the following factors: • Understanding of the project; • Consultant experience; • Overall clarity of the Proposal; • Project approach; • Creativity and innovation; • Whether the proposed Scope of Work can accomplish all of the aforementioned Strategic Plan Objectives to the City's satisfaction; • Other criteria as may be added by the City during the evaluation process. The City may choose to interview a limited number of finalists following the review of all proposals. Selection Criteria. Consultant selection will be based on the forgoing evaluation criteria and on interviews if any. The City reserves the right not to select any of the submitted proposals. The City expects to make a decision on a'consultant by Questions should be directed to Mr. Moore by e-mail at mntoore�'ci.netaluma.ca.us. All answers to questions will be sent via e-mail to an interested parties list so that all can review the questions and answers in the same timeframe. All identifying information — name, firm, e-mail address of the person asking the question, will be removed prior to distribution of all responses. Responses will be providedwithin two (2) business days. Economic Development Strategy Consultant List Keyser Marston 55 Pacific Avenue Mall Golden Gateway Commons San Francisco, CA 94111 Mundie & Associates 3452 Sacramento Street San Francisco, CA 94118 Bay Area Economics 1285 66th Street Emeryville, CA 94608 Economic & Planning Systems 2501 Ninth Street, Suite 200 Berkeley, CA 94710 The CLUE Group, LLC PO Box 2345 Arlington, Virginia 22202-0345 Sedway Group/CBRE Consulting, Inc. 4 Embarcadero Center, Suite 700 San Francisco, CA 94111 Seifel Consulting 221 Main Street, Suite 420 San Francisco, CA 94105 Applied Development Economics 100 Pringle Ave., Suite 560 Walnut Creek, CA 94596 Economics Research Associates 388 Market Street, Suite 1580 San Francisco, CA 94111 Kosmont Companies 16501.Ventam Blvd., Suite 511 Encino, CA 91436 Wahlstrom & Associates 2140 Shattuck Avenue #2239 Berkeley, CA 94702 Strategic Economics 2991 Shattuck Avenue, Suite 203 Berkeley, CA 94705 Dr. J. Robert Fountain Regional Economics Consultant 1350 Hayes Street, Suite C-3 Benicia, CA 94510 TCW Economics 2756 9°i Avenue Sacramento, CA 95818 George A. Jouganatos Ph.D. Consulting Group 2001 T Street Sacramento, CA 95811 ECONorthwest 99 W. Tenth Avenue, Suite 400, Eugene, OR 97401 10 I�