Community

Customizing Economic Development

What is the perfect economic development strategy? It depends on the community.

People often describe the economic development strategy of corporate tax breaks and subsidies as an old strategy that fails to work in today’s environment. One of the newer economic development ideas suggests that creating vibrant neighborhoods with many amenities will attract the type of workforce that will in turn bring in established businesses and create new ones.

At RSG we know that there is no silver bullet for any community's or region's economic development. Each effort requires consideration for both a city's individual characteristics and broader trends.

Sometimes an appropriate subsidy can serve as a catalyst to turn a neighborhood or local industry around, especially if it supports a policy goal. Contact us today to learn how we can help you craft and implement the perfect economic development strategy for your town.

Written by Dima Galkin, an Associate at RSG

Dissecting Brown’s Budget

Image courtesy of http://calbudgetcenter.org/

Image courtesy of http://calbudgetcenter.org/

Governor Brown and the California legislature approved a $122.5 billion budget to fund state operations for 2016-17. The budget allocates $400 million for affordable housing construction, increases preschool/child care funding by $500 million, increases reserves by $2 billion, invests $200 million in college readiness programs, and redirects $2 billion in Proposition 63 mental health funds to provide housing for mentally ill homeless people.


Putting an extra $2 billion into the rainy day fund suggests that state lawmakers are weary about a looming recession. There was a notable focus on alleviating poverty and income inequality in this year’s budget process. Brown and lawmakers failed to agree on a spending plan from the state’s greenhouse gas reduction fund, also known as the cap-and-trade fund, and failed to reach a deal on funding to fix crumbling roads and highways, which they have labeled as a top priority for several years.


To learn more about how the state budget impacts your local community and how you can make the most of it, contact RSG.


Written by Jeff Khau, a Senior Analyst at RSG

 

San Carlos Breaks Ground on a Landmark Hotel

 

The City of San Carlos recently broke ground on a new four-story, upscale, extended-stay Landmark Hotel. The hotel will include 204 guest rooms with individual kitchens, outdoor patio areas with a pool and sport court, fitness and laundry center, and a meeting room.

 

 

The hotel will be located near the City’s gateway entrance off the 101 freeway. It will provide much needed transient occupancy tax revenue to diversify the city’s tax base and increase revenues to fund services for the community. All buildings previously on the site have been demolished, and the entire project is expected to be completed in August 2017

RSG was involved in every step along the way from site assembly and acquisition, drafting purchase and sale agreements, relocating existing businesses, developer negotiations and agreements, and obtaining approval from local agencies. Call us to find out how we can facilitate your next project.

Written by Suzy Kim, a Senior Associate at RSG

Keeping Up with Community Trends

Photo credit: USC Alumni Real Estate Network

Photo credit: USC Alumni Real Estate Network

One community trend is the transit renaissance in Los Angeles. Dima and I attended an event at which Philip Washington, the new CEO of Los Angeles County Metropolitan Transportation Authority, spoke about five mega-trends affecting the future of transportation in Los Angeles:

1.     Funding is crucial, but sustainable funding is a struggle. Funding comes from federal, local, and private institutions.

2.     Safety and security are priorities. Our infrastructure needs to be reliable for the next 100 years.

3.     Workforce and lifestyle changes affect travel behavior.

4.     Demographic shifts, such as gentrification, should be addressed as transit-oriented development breaks ground.

5.     By accelerating technological advances, we can better serve the public. Uber and Metro are partnering to provide access to the new Expo line.

Photo credit: USC Alumni Real Estate Network

Photo credit: USC Alumni Real Estate Network

Washington’s points set the stage for a potential ballot measure, expected to go to LA County voters in the November ballot. It would raise $120 billion over a 40-year period to fund transportation infrastructure maintenance and construction. The measure would augment Measure R—the current half-cent sales tax—by an additional half-cent. It would also extend the sales tax by another 18 years. More details regarding the plan can be found here.

RSG keeps up with trends affecting communities. To learn more about how RSG’s knowledge can benefit your project, call us today.

Written by Jeff Khau, a Senior Analyst at RSG

Photo credit: USC Alumni Real Estate Network

Photo credit: USC Alumni Real Estate Network

Economic Development for People and Places

Aaron Renn recently wrote a thoughtful, balanced opinion piece about the dilemma between people-based and place-based economic development. People-based economic development is theoretically more effective. Place-based economic development, which is sometimes the only available approach for local governments because of their territorial nature, generally is structurally incentivized and provides quicker gratification.

At RSG, we are very familiar with this dilemma. Our clients are usually cities. We recognize that they need to generate property and sales taxes now to fund core services. Investments in education that pay off 20 years later (and possibly somewhere else) are needed, but difficult to justify. At the same time, with our focus on people and relationships, we know that people-based investments are more sound in the grand scheme of things.

Renn provides solid advice for state and federal governments to change the incentive structure to make it easier for local governments to pursue people-based economic development. Keeping in mind the glacial pace of state and federal policy change, we’re here to help cities balance economic development for both people and places.

Written by Dima Galkin, an Associate at RSG

How Regulation Can Help Avoid Airbnb Backlash

There has been a lot of discussion among municipalities about Airbnb and the impact of short-term rentals in the new tech-sharing economy. According to planner Jeffrey Goodman, cities may solve some of the problems with the help of more appropriate and better-enforced regulation. 

Goodman’s article in Planning magazine describes his three-part process to reduce tensions between cities, residents, short-term renters, and owners renting their property. Goodman’s three-part process is:
•    Hold Airbnb and similar rentals to the same safety, zoning, garbage, and other standards as other property owners.
•    Tailor regulations to local needs – identify the goal of the regulation to customize the regulation itself (e.g., regulation to reduce noise and traffic will differ from regulation focused on housing affordability for long-term residents).
•    Enforce regulations – coordinate with Airbnb to help owners comply with laws.

Of course, there are other considerations, such as ensuring that Airbnb property owners pay their fair share of taxes. Still, Goodman provides good advice to ensure Airbnb creates less resistance and more benefits in local communities.

Written by Dima Galkin, an Associate at RSG

Push to Expand Brownfield Cleanup in California

As developable land becomes increasingly sparse in California, federal and state governments have implemented initiatives to push developers toward the abundance of contaminated sites throughout the state. 

Among these initiatives is the recent introduction of Senate Bill (SB) 820, that seeks to extend the California Land Reuse & Revitalization Act of 2004 (CLRRA) beyond its set expiration date of January 1, 2017. The law has helped propel the cleanup and development of vacant hazardous waste sites across the state. CLRRA encourages revitalization of blighted properties by allowing purchasers of contaminated lots to negotiate a cleanup plan with the state in exchange for liability protection from damages associated with the original contamination. Senator Bob Hertzberg, along with sponsorship from CALED’s Brownfield & Land Revitalization Committee (BLRC), have been the leading force behind SB 820.

Another big movement to clean blighted sites has been the availability of numerous funding programs, all with varying eligibility requirements and fund limits. The Center for Creative Land Recycling recently held its “Back in Business: Resources for Redevelopment & Land Recycling” workshop, highlighting the major players involved in funding within California, including: US Environmental Protection Agency (EPA), California State Water Resources Control Board (SWRCB), and California Department of Toxic Substances Control (DRSC).

RSG understands that recycling abandoned and under-utilized properties is challenging for all parties involved, but with the right team and knowledge it can be a truly rewarding project. RSG is experienced with all facets of brownfield remediation, such as identifying and obtaining funding; projecting assessment, cleanup and development costs; community outreach; and management of third party consultants. We are also actively involved with CALED’s Brownfield & Land Revitalization Committee and pursuing new development opportunities with clients continually. Call us to find out how we can help you navigate the process.

Written by Nate Gunderman, an Associate at RSG

Considering All Options in the Affordable Housing Toolbox

In the National Housing Institute’s blog “Rooflines,” Alan Mallach, former director of housing and economic development for Trenton, NJ, encourages us to consider which tools are most effective in creating affordable housing. Sometimes, apartments and houses can be purchased and restricted to residents of certain income levels more cost-efficiently than building new affordable housing. Average existing homes in cities like Dallas and Phoenix (Mallach’s examples) can be bought for under $200,000 while building affordable housing can cost over $200,000 per unit.

Mallach doesn’t argue against new construction. In places like San Francisco, the market for existing homes is incredibly expensive. A per-unit construction cost of $300,000 or more is “still a good deal.” Mallach urges consideration of all affordable housing tools.

RSG maintains and analyzes a database of California’s affordable housing tax credit projects. The database for 4% projects shows that per-unit costs range from $85,000 to $782,000. Acquisition and rehabilitation may not be cheaper than new construction, depending on the specific market and the specific project.

RSG can analyze the market and project results to maximize the effects of affordable housing spending. If you wonder whether spending money on acquisition or new construction will provide the most benefit in your community, contact RSG today!

Written by Dima Galkin, an Associate at RSG

Serving Successor Agencies

On Friday, March 18, the Irwindale Successor Agency closed escrow on the sale of a property listed in its Long Range Property Management Plan. Located at 4954 Azusa Canyon Road, the property is 0.52 acres, zoned for light manufacturing, and improved with an approximately 10,000 square foot building.

RSG served as the broker for the transaction. We marketed the property, preparing and distributing an offering memorandum and other marketing materials to interested parties and local businesses and advertising the property in various online forums. In order to recommend the best offer to the Successor Agency, RSG reviewed all of the offers, guided by the Successor Agency’s vision for the property, the content of the offers, and the experience of those making the offers.

As consultants who provide Successor Agency services, we also drafted staff reports and resolutions for the Successor Agency and Oversight Board meetings in which the Exclusive Negotiation Agreement (ENA) and Purchase and Sale Agreement (PSA) were approved. We attended those meetings and coordinated with the State Department of Finance to ensure the approval of the sale.

Given RSG’s mission to improve communities, we provide more services than a traditional broker. In addition to wanting to sell the property, we endeavor to ascertain that the property is sold to a buyer who will develop or maintain it as an asset to the community.

Congratulations, Irwindale! If your city’s Successor Agency needs assistance in selling properties, give us a call.

Written by Dominique Clark, an Associate at RSG

A Fresh Look at Economic Development

The Brookings Institution recently released a report with guidelines to prioritize growth, prosperity, and inclusion in economic development efforts. 

The goal of economic development, should be to “put a regional economy on a trajectory of higher growth that increases the productivity of firms and workers and raises standards of living for all, thus achieving growth that is robust, shared, and enduring,” according to the report. Economic development should prioritize building strong business ecosystems for core industries, improving the productivity of firms and people, and facilitating trade. These are the market foundations from which growth, prosperity, and inclusion emerge. The report recommends five action principles:

1.    Set the right goals, 
2.    Grow from within, 
3.    Boost trade, 
4.    Invest in people and skills, and
5.    Connect place.

The report has already received coverage from outlets with broad distribution, like CityLab, which said that the report calls for a paradigm shift in economic development thinking, away from competitiveness and growth for growth’s sake, and toward a more inclusive prosperity. Such coverage is important for the ideas and approaches to spread and be adopted more widely.

At RSG, we have long focused on making growth equitable for all community members: residents and businesses. Our economic development analyses incorporate Brookings’s action principles. Contact us to discuss how your city can achieve inclusive growth and prosperity.

Written by Dima Galkin, an Associate at RSG