San Luis Obispo's Economic Future

San Luis Obispo Chamber of Commerce

“Vision: A clear and distinct picture of an achievable future.”

San Luis Obispo Chamber of Commerce

Business People Working Together for a Prosperous, Balanced Community

Our Mission As the voice of business, to promote the economic and community well-being of San Luis Obispo.

Long-Term Objectives In 2020, San Luis Obispo will: t Be a community that encourages businesses to start and thrive here because of its business-friendly values, strong environmental ethic, diverse creative-class employee base and active connection with Cuesta College and Cal Poly education and innovation. t Provide an abundance of meaningful jobs for residents of various skill and educational levels. t Nurture a growing number of primary, head-ofhousehold jobs in future-oriented businesses.

t Support a vibrant downtown, with a diverse mix of businesses, including offices, restaurants, retail and entertainment. t Encourage other successful outlying business districts as well as friendly, walkable residential neighborhoods. t Continue to promote world-class educational, cultural and recreational opportunities. t Remain a compact, prosperous and safe city surrounded by viable agriculture and protected open space, with easy access to our beautiful natural environment.

Our Vision of SLO’s Economic Future

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his booklet is the third major revision of a document originally developed in 1992 during a very serious economic downturn.

The Board of Directors of the San Luis Obispo Chamber of Commerce was concerned because many previous years of prosperity had left many residents feeling that economic growth was a “given� and that this growth needed to be tightly controlled. This led to policies that tended to discourage business, whether that business was desirable or not. To have sustained prosperity, there needed to be a clear vision of what the community wanted and how to achieve that vision.

Previous editions of this document have led to substantive policy changes and community investments that have contributed to many years of prosperity.

To create this fourth version of our Vision, we again assembled a group of knowledgeable community leaders who demonstrate the ability to imagine a community better than it is today. As in 1992, the preparation period of late 2008 and 2009 has been a time of serious economic decline. We feel certain that this unprecedented global economic Modernize physical Nurture and protect crisis will lead to fundamental and regulatory existing businesses infrastructure and jobs restructuring of the national, state and local economies. This economic sea change, comQuality of bined with unprecedentLife in SLO Use tourism as an Nurture and attract ed changes in technoloeconomic development future-oriented gy, lifestyles and culturengine companies al norms, made the task Partner with more complex. While jobs Cal Poly and Cuesta and business health are more highly College as a bridge valued now, the Economic Vision Task to the future Force has had to mentally jump over the current uncertainty to a time when the economy and local business is again expanding. By developing forward-looking strategies and making the right community investments now, San Luis Obispo will be poised to take advantage of coming economic opportunities.

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San Luis Obispo’s History

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an Luis Obispo was founded in 1772 by Spanish missionaries who were establishing a series of settlements along the California coast.

They selected the town site because of accessible water, good soil, mild weather and available workers. For nearly 150 years, that’s about all San Luis Obispo had going for it. The only significant industry was agriculture, with its inherent instability caused by drought, disease and market conditions. Generally, the community was poor and struggled to survive.

In 1894, the Southern Pacific Railroad came to town. This ended the city’s long isolation from the rest of the state and contributed to a modicum of prosperity. But times were still tough for another 55 years until the beginning of World War II. In 1901, a small teachers college was founded, which later became California Polytechnic State College and then California Polytechnic State University. Cal Poly and its impact on the city grew slowly, but, SLO Population & Cal Poly Enrollment Growth by the 1960s, it was bringing many 50,000 San Luis Obispo citizens solidly into City of San Luis Obispo the middle class and beginning to Cal Poly 40,000 transform San Luis Obispo into a modern and progressive city. In the 30,000 1980s, Cal Poly developed a national reputation for excellence and began 20,000 to dominate the city’s economic and cultural life, which it still does today.

10,000 In recent years, Cal Poly has become one of the nation’s preeminent poly0 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 technic universities — recognized SOURCE: City of San Luis Obispo and Cal Poly SLO CHAMBER OF COMMERCE GRAPHIC for its engineering, agriculture, architecture and business education.

Tourism began slowly during the earliest days of the small settlement.

Our strategic location on El Camino Real (now U.S. Highway 101) between the northern and southern portions of the state was an early

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reason for tourists to stop overnight. The tourism industry didn’t become important until the 1920s when Highway 101 was improved over the Cuesta Grade and long-distance automobile travel became practical.

San Luis Obispo’s “halfway” location was virtually its only draw until 1958, when the state began operating Hearst Castle© as a tourist attraction. Since then, such factors as the development of Mission Plaza, expanded outdoor activities, a revitalized downtown, the burgeoning wine industry and the addition of excellent motels, hotels and restaurants have continued to attract tourists. Today, tourism remains one of the city’s most important industries.

It’s only been in the recent era that San Luis Obispo has been perceived as a desirable place to live. Previously, the city was mostly thought of as a slow, backward little town. It had a limited cultural life, poor public facilities and substandard streets. Today, the city’s attributes — clean air, beautiful vistas, small town character and a charming downtown — have become rare in other places and are highly valued. Additionally, modern communications and transportation have turned our somewhat isolated location from a negative feature into a positive one.

San Luis Obispo’s current economy can be characterized several different ways. Of the $12.5 billion gross county product, tourism contributes about $1.1 billion (8.8 percent) and agriculture accounts for about $610 million (4.8 percent). All other sectors, including manufacturing, provide less than 5 percent each. From an employment point of view, more than 70 percent of local jobs are in government, retail and other services (including tourism). The political climate is affected by the fact that 25 percent of residents derive their income from sources not directly connected to the local economy, such as pensions, welfare, social security and government employment.

Modern San Luis Obispo’s prosperity and core values come from “historical accidents,” not from brilliant planning. But depending on luck to take care of our community in the future is much too risky.

There are positive steps that can be taken now that will steer us into a brighter future. That’s what this document is all about.

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Our Core Values and Economic Principles As in 2004, the current Task Force feels that a clear statement of our economic principles and assumptions is critical to an understanding of the Chamber’s recommendations. The Task Force has reviewed current Chamber policies and, after much discussion, developed the following economic and community development principles for San Luis Obispo:

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Economic, cultural and social diversity Economic development will depend on the community’s ability to provide attractors for the “creative class” (As defined by Richard Florida in his book Rise of the Creative Class) employees who will drive future innovation and entrepreneurship. Social and cultural infrastrucEmployment by Sector ture, such as bookstores, film houses, music venues and San Luis Obispo County in 2009 performance arts, cultural festivals, social Transportation/Utilities: 3.3% Information: 2.2% gathering places, galleries and a variety of eat- Agriculture: 4.1% Other Services: 4.2% ing and drinking establishments, help an Finance/Insur./ expanding business community keep and Real Estate: 4.6% Government: Mining/ attract talented people. Economic develop22.4% Construction: ment must also serve the daily, basic needs of 5.0% the community because it is integral to their Manufacturing: Retail/Wholesale 5.8% quality of life. Specifically, San Luis Obispo busiTrade: 14.5% ness must provide meaningful, well-paid job opportuProf./Business Services: nities to those of all skill and education levels and 8.9% serve the financial, recreational, travel, housing, health, Health: Tourism: 11.6% 13.4% educational and shopping needs of all of our citizens.

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Enhancing quality of life Maintaining and improving quality of life, in the broadest sense, should be the mission of all economic and community development. Economic health and vitality is a critical part, but only a part, of a balanced community. Economic, social and environmental factors must all be taken into account in a balanced way when making important decisions about the community’s future. A city that exclusively focuses on any one of these components without regard to the others will Environmental almost certainly end up with an unlivable community. A vital economy depends upon a healthy environment and a diverse, nurturing social fabric. But, likewise, a healthy economy is essential to maintaining and promoting these environmental and social values. no Eco

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Focus on primary jobs Primary jobs are those in companies and organizations that derive most of their income from outside the community. Currently in San Luis Obispo, most primary jobs are in state government, higher education, regional health care, tourism, agriculture, manufacturing, research, communications, software development and regional nonprofit organizations. Primary jobs are the foundation of any community’s prosperity because each one supports an additional six people in the community — three with support level jobs and three who are not in the labor force, such as children and retirees. New primary jobs create additional community wealth that in turn spurs the development of new support level jobs in areas like retail, personal services and local government. The normal loss of primary jobs (because of mergers, company moves and layoffs) must be offset by a steady stream of new primary jobs just to stay even. To truly move forward, economic development efforts must focus on primary job development.

Primary Jobs

Support Level Jobs

t Agriculture t Tourism, including leisure and business travel, conferences, destination recreation and cultural arts tourism t State and county government t Exported professional and business services t Customer service centers t Manufacturing t Higher education t Research and development t Regional offices t Regional health care facilities t Regional draw retailing

t Most retail, except goods sold to tourists t Most personal and professional services t Restaurants (meals sold to locals) t City government t Home building t Commercial construction t Recreation and entertainment t Non-profit

Examples of each type of jobs for the San Luis Obispo study area. (Our study area included the City of San Luis Obispo and surrounding areas, including Cal Poly, Cuesta College, the California Men’s Colony and airport area).

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Sense of place The city should plan for some new growth in a compact urban form as a means to minimize urban sprawl. Planned properly, a city with a compact urban form can be a more desirable place to live than a sprawling city. Complete cities can reduce commute time, use resources more efficiently, provide more housing choices and encourage more walkable, friendly neighborhoods. Creatively planned higher-density, people-oriented neighborhoods contribute toward a strong “sense of place.”

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Collaboration is key In the past, a large amount of energy, money and talent was wasted as various community groups pushed their opposing agendas; the resulting stalemates often led to inaction. The challenges we face now are too large and the resources too limited to continue the game of political “one-upmanship.” Business, environmental, historic preservation and neighborhood groups have taken steps toward working together to build consensus solutions. This growing collaborative spirit must be nurtured and strengthened if we are to move San Luis Obispo forward.

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Strengthening the genuine San Luis Obispo In order to preserve our strong sense of place, our economic development strategy should build on San Luis Obispo’s strengths and attributes. In addition to a beautiful physical environment and mild climate, San Luis Obispo’s specialness is also the product of our people, who are friendly, unpretentious, well-educated and energetic with a strong entrepreneurial spirit and independent streak. We have a deep sense of community, an eagerness to participate in community life and a respect for our heritage. Our culture is a blend of our agricultural roots and small town values. As befits a university town, San Luis Obispans also tend to be progressive, tolerant and creative. This fabric of place and people creates the magic that is San Luis Obispo and the uniqueness that must be preserved and strengthened.

Our Six-Point Economic Strategy

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Proactively protect and enhance San Luis Obispo’s unique quality of life

The foundation of San Luis Obispo’s modern economic prosperity is our unique quality of life — clean air and water, beautiful and accessible natural landscapes, excellent schools, first-class health care and diverse cultural and recreational opportunities, along with personal safety and a true sense of community. Many of these attributes that we hold so dear are now threatened because of funding limitations, political infighting and benign neglect. We must proactively work to preserve and enhance these qualities to protect our future economy and way of life.

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Support protection of and appropriate public access to San Luis Obispo’s signature landscapes, including the greenbelt surrounding the city, the “Seven Sisters” and key creeks and riparian habitats

B

Recognize the importance of downtown San Luis Obispo as a city jewel that requires continuous care and enhancement

C

Promote business involvement in energy and resource conservation, and help improve the environmental performance of the business community through encouragement and education

D

Support and promote the benefits of compact urban form and appropriate density; support in-fill and oppose development that is likely to induce urban sprawl; support developments that are pedestrian, bicycle and transit friendly

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Continue to oppose development or activities that significantly harm the local or regional environment

F

Advocate to our members and the community an urgent need to reduce fossil fuel consumption and actively promote the need for energy efficiency and conservation and both distributed and utility scale renewable energy

G

Promote ways to keep the citizenry connected and support activities that add to San Luis Obispo’s lifestyle and sense of community, including enhanced social and cultural experiences, educational excellence and recreational opportunities

H

Work with the City to eliminate artificial residential growth control policies in order to better balance housing with jobs and reduce green house gas emissions

I

Support expanded bicycle access and bicycle education, promote the use of clean fuel vehicles and encourage the use of public transportation.

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Our Six-Point Economic Strategy

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Nurture and protect existing businesses and jobs

San Luis Obispo’s greatest resources are our strong and diverse base of existing businesses and our talented, hardworking and creative business owners and workforce. Existing businesses are sometimes taken for granted and not included as a critical part of an economic plan, even though expansion of already established businesses is the most cost effective and realistic form of economic development.

Even a vital existing job base will wither and die if it is not protected and nurtured or not allowed to respond to new economic and competitive realities.

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A

Encourage expansion of existing businesses through appropriate zoning and annexation

B

Identify and assist in the development of clusters of existing and emerging business types to help cultivate critical mass and build a common labor, technology and infrastructure pool

C

Work with the City to create a business retention program to foster better understanding and support of local business community needs

D

Support the City’s Economic Development program and encourage the City to allocate the resources necessary for the program to succeed

E

Keep San Luis Obispo the retail hub of the county; protect and enhance the downtown area as a multi-use restaurant, entertainment, shopping area and civic and professional center; continue targeting and attracting major destination retailers; actively work to improve the viability of other business districts in the city

F

Work to keep major county offices and courts downtown; advocate for more private office space in the downtown

G

Support a proactive parking program that develops new parking facilities in the downtown area and encourages existing surface parking in the downtown area to be put to better and higher uses, e.g. plazas, retail centers, etc.

H

Work to keep San Luis Obispo the medical, health and wellness center for the region by encouraging flexible office zoning and development standards; support hospital operations; encourage ancillary medical services, including suppliers, ambulance, paramedics, etc.

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Promote and enhance agriculture as a viable industry, not merely as an open space or folklore museum; support legislation that helps agriculture to thrive.

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Nurture and attract future-oriented companies, especially businesses that embrace sustainability

Although most job growth comes from existing businesses, a prosperous economy also needs the primary jobs and fresh energy of new companies. Future-oriented businesses providing head-of-household jobs and meeting our high standards should be welcomed. Because San Luis Obispo is widely known for high environmental ideals, we are uniquely positioned to nurture businesses that see the opportunities in providing green-oriented products or services and seek a community that shares their environmental ethic.

A

Develop an authentic community brand based on our environmental, physical and community assets, which can be used for both tourism and economic development

B

Work with the City and the County to help cultivate a consistent “open for business” message

C

Collaborate with business and government to support and create incentives for green and environmentally-sustainable business products, services and operations

D

Identify and support existing and emerging industry clusters

E

Connect high wealth individuals with entrepreneurs and emerging businesses

F

Work with area businesses, Cuesta College, Cal Poly and government to attract and capture workers in their embryonic “life building stage” of development

G

Create a means to connect with entrepreneurs, home-based business people and employees who work for out-of-area employers; engage them in the economic life of the community.

“You’ve got to be careful if you don’t know where you’re going because you might not get there.”

Yogi Berra

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Our Six-Point Economic Strategy

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Partner with Cal Poly and Cuesta College as a bridge to the future

Cal Poly and Cuesta College are not just essential elements of our existing economy; both can play key roles in transitioning San Luis Obispo into a true forward-looking knowledgebased economy. The educational excellence at Cal Poly attracts the best and brightest faculty and students to San Luis Obispo. If properly nurtured, Cal Poly innovation combined with entrepreneurial talent can develop into new, local businesses. Cuesta’s high-quality instruction makes it uniquely positioned to train the employees these new companies will need.

A

Formalize collaboration between the Chamber, the City and Cal Poly to harness the innovations developed on campus and help transform them into viable local businesses, including working with the C3RP Research Park to help it develop to its full potential

B

Identify and support existing and emerging industry clusters that build on the strengths at our higher education institutions

C

Encourage academic programs that will better prepare workers for jobs in the new economy

D

Encourage Cuesta College to further develop job training programs for employees in the local economy

E

Foster more synergy between local businesses and Cal Poly and Cuesta College

F

Support the development of a continuing education/conference center and alternative uses of existing campus facilities to help the university and the community college build and maintain strong ties to statewide industry and the local economy.

“The only way to predict the future is to invent it.�

Alan Kay

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Use community-enhancing tourism as an economic development engine

San Luis Obispo has been a tourist stop growing in popularity since the region was settled more than 200 years ago. It’s become clear now that tourism can be more than a steady provider of primary jobs. The tourism of the future should be a contributor to enhancing the community both economically and culturally. A strong city brand and cultural amenities that attract tourists will also attract the “creative class” workers essential to economic development.

A

Protect the area’s air quality, scenic beauty and character, recognizing that they are primary tourist attractions

B

Support and help implement a more aggressive tourism marketing program to more successfully compete for tomorrow’s tourists

C

Recognize the tourism value of agriculture and wine and agriculture’s role in the rural identity of the Central Coast; identify and promote compatible uses of agricultural lands

D

Encourage business community support of existing and potential arts and community venues and events, such as the Performing Arts Center, San Luis Obispo Art Center, San Luis Obispo Botanical Gardens, Children’s Museum, San Luis Obispo Little Theatre, Festival Mozaic and the SLO International Film Festival

E

Encourage development of high-end accommodations, boutique hotels and destination full-service resorts both in the city and in select areas adjacent to the city

F

Promote new and emerging types of tourism, including eco-tourism, wine and culinary tourism, agritourism, rail tours, sea cruises, bicycle touring, adventure tours, elder hostels and affinity groups, such as hiking clubs and food and wine societies

G

Support the development of additional meeting and conference space in the city at Cal Poly or at Cuesta College.

“The real voyage of discovery consists not in seeking new landscapes but having new eyes.”

Marcel Proust

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Our Six-Point Economic Strategy

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Modernize our physical and regulatory infrastructure and fairly distribute the costs

Even the most proactive and progressive economic development program will fail if the community is not prepared to support new businesses. The physical and regulatory infrastructure must be ready to handle new business; creative ways must be found to more fairly distribute the cost of infrastructure improvements and add more certainty to the development process.

A

Promote the need for adequate infrastructure and resources, including water, waste treatment, roads, bikeways and public transit; advocate to keep fees and utility rates competitive with other communities

B

Work to ensure that development fees and levies imposed on new and expanding businesses are fair and broad based; discourage the imposition of development impact fees to address pre-existing community needs; explore new financing strategies to meet existing community needs

C

Encourage the City to recognize that many major developments will require some degree of City participation or collaboration in order to successfully achieve broader community objectives

D

Treat the San Luis Obispo County Regional Airport as a critical asset to local business; support necessary facilities expansion; work to expand passenger air service

E

Encourage the elimination of unnecessary, overlapping and contradictory regulations; oppose legislation that is harmful to local business and agricultural communities; advocate on behalf of business for reasonable legislation

F

Work with the City and County through the General Plan update process to advocate for an inventory of land that could be annexed with appropriate zoning and infrastructure capacity to accommodate desired economic and residential expansion

G

Advocate for public facility enhancements, including investing in our urban forest, public streets, spaces, plazas, trails and parks

“Vision is the art of seeing the invisible.�

Jonathan Swift

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H

Support diversity in size, type of housing production and density with smaller lot sizes in all parts of the City; keep focused on the goal of producing more actual housing units by encouraging creative and progressive housing development through incentives; continue to educate the community on the connection between available affordable workforce housing and social, environmental and economic health

I

Advocate for flexible zoning strategies to encourage the production of innovative, infill projects

J

Take a leadership role in discussions about generating greater certainty in the development review process and examining the long-term accumulation of policies and regulations and their effect on economic development

K

Facilitate cooperative relations between the City and County, especially concerning land use on the margins of the City

L

Continue to work at the state level to achieve a more business-friendly environment in California

M

Encourage the implementation of circulation improvements outlined in the Circulation Element of the General Plan for the City of San Luis Obispo in conjunction with the annexation of the airport area.

“You’ve got to think about big things while you’re doing small things, so that all the small things go in the right direction.”

Alvin Toffler

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“Vision without action is merely a dream.

Action without vision just passes the time.

Vision with action can change the world.”

Joel A. Barker

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Economic Vision Task Force This report was prepared by the SLO Chamber of Commerce Economic Vision Task Force Beth Marino, Andre Morris & Buttery; Chamber of Commerce Chairperson of the Board, 2008 Tom Lebens, Sinsheimer, Juhnke, Lebens, McIvor; Chamber of Commerce Chairperson of the Board, 2009 Jeff Buckingham, Chairperson, Chamber of Commerce Economic Vision Task Force Andrew Carter, City of San Luis Obispo Claire Clark, City of San Luis Obispo Kristin Johnson, MOXIE Market Share Development Tom Jones, Cal Poly Erik Justesen, RRM Design Group Pierre Rademaker, Pierre Rademaker Design Rob Rossi, Rossi Enterprises Mary Verdin, Verdin Marketing Ink

Committee Staff David Garth, Chamber of Commerce President/CEO Ermina Karim, Chamber of Commerce Director of Governmental Affairs The San Luis Obispo Chamber of Commerce gratefully acknowledges the generous contribution of Pierre Rademaker Design for the design and production of this publication.

Photography by David Garth, Š2010 Š2010 San Luis Obispo Chamber of Commerce Printed on recycled paper.

Cert no. XXX-XXX-XXXX

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San Luis Obispo Chamber of Commerce 1039 Chorro Street, San Luis Obispo, CA 93401 Telephone: 805-781-2670 t Fax: 805-543-1255

www.slochamber.org t slochamber@slochamber.org