HomeMy WebLinkAboutStaff Report 13433
City of Palo Alto (ID # 13433)
City Council Staff Report
Report Type: Action Items Meeting Date: 9/13/2021
City of Palo Alto Page 1
Title: Discuss and Provide Direction on a Request for Proposals (RFP) for an
Economic Development Strategy Consultant and an Internal Staffing Plan to
Support Economic Development Issues (8:00 PM - 9:15 PM)
From: City Manager
Lead Department: Administrative Services
Recommended Motion
Staff recommends that Council discuss and provide input on a Request for Proposals for
an economic development strategy consultant and an internal staffing plan to support a
connection to the business community with a focus on:
A. Additional opportunities to bolster revenue and provide services to local
residents;
B. Strategies to deal with shifts caused by the COVID-19 pandemic;
C. Strategies to bolster Palo Alto Hotels; and
D. Analysis of shifts in Palo Alto’s business mix, including clean-up and analysis of
business registry data
Recommendation
Staff recommends that Council discuss and accept the request for proposals for an
economic development strategy consultant and accompanying internal staffing plan and
provide direction on which level of internal staffing, if any, the Council would like to
further pursue. Based on the discussion thus far, and existing levels, staff would
recommend the addition of a position to serve as the overall coordinator responsible
for economic development work including data analysis work to support the efforts.
Background
In January 2021, the City Council unanimously selected Economic Recovery as one of
its four priorities for calendar year 2021. To address this priority, staff developed the
Community and Economic Recovery (CER) workplan which was discussed and approved
by the City Council in March 2021 (City Manager’s Report (CMR) 12111). The CER
workplan included an individual item that directed staff to further refine the scope of
the City’s economic support activities. The third update on the progress of the
Community and Economic Recovery workplan is a separate informational item (CMR
13526) included as part of tonight’s agenda packet.
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On June 1, 2021 the City Council discussed potential economic development strategies
with the support of consultant Good City Company, a consultant assisting the City in its
facilitation and scoping of economic development support activities, and provided
direction on the four main areas to focus a request for proposal for an economic
development strategy and internal staffing plan. The exact language of the motion can
be found in the action minutes from June 1, 2021. Those four elements are integrated
into the recommendation of this report and include opportunities to bolster revenues
and provide services to local residents, strategies to deal with shifts caused by the
COVID-19 Pandemic, strategies to bolster Palo Alto’s hotels, and analysis of shifts in
Palo Alto’s business mix, including clean-up and analysis of the City’s business registry
data.
Discussion
The City has continued to work with the Good City Company to develop a potential
scope of work for a Request for Proposal (RFP) for an economic development
consultant to help the City craft a strategy focused on those four topics. The Good City
Company has also further refined its analysis of potential internal staffing plans to
complement the procurement of an economic development consultant. Their report is
included as Attachment A to this CMR, with the Draft Economic Staffing Plan as
Attachment II of that report and the Draft Economic Strategy Scope of Work as
Attachment III of that report. Staff also included questions regarding economic support
and development in a brief survey sent to businesses in the California Avenue and
University Avenue business districts to inform the City Council’s further discussion of the
topic.
Good City Company’s Recommendation Regarding a Request for Proposals for an
Economic Development Consultant
The RFP developed by the Good City Company incorporates the four focus areas
provided by the City Council and seeks proposals for how consultants would address
each of those focus areas. It provides overarching guidance from the City’s economics
and business section of its 2030 comprehensive plan and Palo Alto specific context to
potential vendors.
The request for proposals incorporates the discussion from June with the City Council
into a frame for potential service providers to respond to. The frame of the RFP is
structured to allow propoers to identify how they will go about accomplishing the tasks,
which include conducting a baseline scan of the City’s economic and business conditions
in addition to developing a comprehensive economic development strategy for the City
to implement.
The final product would be an economic development strategy report that the City
could implement over the next few years to reach the desired outcomes of further
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supporting the local economy, strengthening connections with the local business
community, and ensuring that a diverse array of services remains available for
residents.
Survey of Businesses in California Avenue and University Avenue Business Districts
During the City Council’s discussion of economic development activities in June, the City
Council asked for more information about the impacts of street closures on various
types of businesses. The City is working with AvenuInsights to analyze the sales tax
performance of businesses throughout the pandemic by comparing information from
businesses within and near the street closures to pre-pandemic levels. Staff will have
preliminary analysis of this information for the September 13, 2021 meeting. Concurrent
with that analysis, staff also released a survey to local businesses to inform ongoing
economic support and development activities.
The survey was available to ground floor businesses located within and nearby the
Uplift Local closed streets and sought information from businesses regarding their
financial performance through the COVID-19 pandemic. Of the 287 included businesses,
a total of 65 survey responses were received. The table below provides information
about the respondents, including:
• Location: Business reported if they were in the California Avenue business
district, the University Avenue business district, or did not report where they
were located
• Inside Road Closure or Near Road Closure: Businesses reported whether they
were inside the road closure or nearby a road closure
• Business Type: Businesses reported which industry type they most closely
aligned with
The responses seen below have been grouped by location, then whether they are inside
or near a street closure, and then by industry type.
It is important to note that the survey was not designed to be a statistically significant
survey but rather to serve as another means of outreach for input and feedback from
our local business community. Given the small number of respondents, potentially
identifiable information, and the purpose of the survey to gain preliminary information,
no cross-tab nor raw data from the survey will be transmitted.
Table 1. Summary of Respondents by Area and by Industry Type
Survey of Ground Floor Businesses Downtown and Cal Ave
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Respondents by Area and Industry Type Respondents
Cal Ave 10
Inside road closure 5
Restaurant/Eating and Drinking Places 2
Retail (other than eating/drinking places) 2
Service (e.g. Hotels, Health Svcs, Legal Svcs, Social Svcs, Accounting) 1
Near street closure 5
Restaurant/Eating and Drinking Places 1
Retail (other than Restaurants/eating and drinking places) 1
Service (e.g. Hotels, Health Svcs, Legal Svcs, Social Svcs, Accounting) 3
Location Not Identifiable 15
Inside road closure 7
Office (e.g. Banks, Insurance, and Real Estate) 1
Restaurant/Eating and Drinking Places 5
Retail (other than eating/drinking places) 1
Near street closure 8
Office (e.g. Banks, Insurance, and Real Estate) 1
Restaurant/Eating and Drinking Places 2
Retail (other than eating/drinking places) 3
Service (e.g. Hotels, Health Svcs, Legal Svcs, Social Svcs, Accounting) 2
University 40
Inside road closure 24
Restaurant/Eating and Drinking Places 13
Retail (other than eating/drinking places) 10
Service (e.g. Hotels, Health Svcs, Legal Svcs, Social Svcs, Accounting) 1
Near street closure 16
Office (e.g. Banks, Insurance, and Real Estate) 1
Restaurant/Eating and Drinking Places 6
Retail (other than eating/drinking places) 7
Service (e.g. Hotels, Health Svcs, Legal Svcs, Social Svcs, Accounting) 2
Grand Total 65
The survey received various responses from businesses and show that while there is no
clear pattern on perceptions of the magnitude of economic impacts from COVID-19 nor
consensus of opinions on street closures that there were some areas of agreement
regarding challenges to local businesses and potential economic support activities to
overcome those challenges.
When asked what the top three challenges facing businesses were, 44 of 65 (67.7%) of
respondents said that retaining/rehiring or hiring employees was one of them. 26 of 65
(40.0%) of respondents of respondents indicated that the cost or availability of supplies
for their business was one of the top three challenges. 25 of 65 (38.5%) respondents
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indicated that a lack of money or time for marketing and promotions was a top
challenge. Paying deferred or increased rent also received votes from many of the
respondents, with 20 of 65 (30.8%) of them noting it as one of their top three
challenges.
Table 2. Top Three Challenges Facing Local Businesses
Location Retaining/
Hiring
Employees
Cost or
Availability
of Supplies
Lack of
Money/Time
for Marketing
Paying
deferred/
increased rent
Cal Ave 7 3 5 3
Univ. Ave 11 17 12 10
No ID 26 6 8 7
Total (%) 44 (67.7%) 26 (40.0%) 25 (38.5%) 20(30.8%)
As one may expect, the responses to the question of what top three resource would be
most helpful to supporting businesses aligned very closely with the challenges they
currently face. When asked what the top three resources that would be most helpful to
supporting businesses, 35 of 65 (53.8%) respondents chose “finding employees”, and
25 of 65 (38.4%) respondents chose “access to capital (i.e. grants, loans, tax credits)”.
The next tier of responses was 16 of 65 (24.6%) respondents selecting “Assistance with
marketing and promotions” and 14 of 65 (21.5%) respondents selecting “Assistance
with City, County, State, and federal regulations”.
Table 3. Top Three Resources that would be helpful to Businesses
Location Finding
Employees
Access to
Capital
Marketing &
Promotions
Assistance w/
Regulations
Cal Ave 5 6 3 2
Univ. Ave 24 13 8 8
No ID 6 6 5 4
Total (%) 35 (53.8%) 25 (38.5%) 16 (24.6%) 14 (21.5%)
The responses indicate disagreement about the desired status of street closures as a
method of supporting businesses, with 26 of 65 (40%) respondents selecting “Continue
Uplift Local Streets Program (maintain street closures)” while 19 of 65 (29.2%)
respondents selected “Reopen streets”. The topic of street closures is a separate item
for discussion on September 13 that will be addressed through the City Council’s
discussion of CMR 13540.
Should the City Council so choose, the topics of the challenges that local businesses
face as well as resources to support them and aid them in overcoming those challenges
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can be incorporated into the development of the Request for Proposal for an economic
development strategy.
Good City Company’s Recommendation on Internal Staffing
The options for a potential internal staffing plan are detailed in Attachment II of the
Good City Company’s report. Good City Company looked at various duties and
responsibilities necessary for economic support and analyzed them through two tables.
The first table presents the duties that have been performed by a staff member in the
City of Palo Alto on special assignment over the past year and compares it to the three
most common levels of economic development staff employed by cities ranging from
the most junior role of an economic development specialist, to the middle-tier economic
development coordinator, to the most senior role of an economic development
manager. As seen in Table 1 of Attachment A, each of the various tasks and
responsibilities that interim city staff has performed over the past year could be
accomplished by any of the three levels, with the core economic support functions
highlighted in yellow.
Table 2 of attachment B presents a range of tasks that are focused on business
retention and support. This table shows that while many of the functions can be
completed by the lower levels of an economic development specialist, many of the tasks
that might be necessitated in Palo Alto, such as overseeing consultants and researching
and reporting on emerging trends would require at least an economic development
coordinator.
Given the wide array of potential duties and anticipated tasks that an internal staff
member would need to take on in Palo Alto, including work on analysis of potential
impacts, staff recommends that the City Council pursue an internal staffing plan that
focuses on the Economic Development Coordinator level. This represents a hybrid
approach that confers additional capacity beyond an economic development specialist
position that can still be augmented by consultant support when necessary for higher-
level specialized tasks. Even with an economic development manager position,
consultant support would still be needed in multiple cases. As such, the Economic
Development coordinator level is the most flexible and scalable of the three options
discussed. Staff would recommend that in recruitment of this position ensuring
characteristics and attributes that lend to data analysis will be a priority. This would
likely be equivalent up to an Assistant to the City Manager classification in the
organization.
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Timeline and Resource Impact
Following City Council direction, it is anticipated that the work on the issuance of a
Request for Proposals (RFP) for a comprehensive economic development strategy
consultant and implementation of an internal staffing plan will take place concurrently.
The issuance of a RFP itself requires certain timelines and posting requirements in order
to comply with purchasing procedures. The extent of City Council revisions to the draft
RFP, if any, will also directly impact the timeline for issuance of the RFP. Given the
posting requirements, it is unlikely that staff will be able to recommend a consultant for
the ongoing work until early 2022.
Should the City Council choose to proceed with an internal staffing plan, staff can
prepare a recruitment and begin that process. It should be noted that the City’s
recruitment staff is currently responsible for filling a number of critical vacancies across
the organization and that this recruitment would need to be prioritized in that context
and potentially completed with a contracted firm for ease and expedited timelines.
Another impact on the internal staffing plan is the allocation of resources for this work.
At the moment, there is no budgeted, ongoing, position for this work. Recruiting and
retaining a qualified applicant could be challenging if a position is not budgetarily
authorized on an ongoing basis as the recruitment proceeds. At this time, staff does
recommend the addition of one full-time position for this work estimated to cost up to
$245,000-$290,000 ongoing.
In addition to no budgetarily authorized positions, there is also not dedicated funding
for this work. There is a Reserve for Strategic Investments set aside in the FY 2022
budget ($750,000) for priority projects that would be appropriate to fund the consulting
work commissioned as result of the RFP. Other uses for this reserve indentified by staff
and the Council are for costs associated with potential November 2022 local ballot
measures. Staff will return to the City Council for budgetary authorization and
appropriation of funding as appropriate throughout the process.
Environmental Review
The action recommended is not a project for the purposes of the California
Environmental Quality Act.
Attachments:
• Attachment7.a: Attachment A: Draft Economic Development RFP Scope of Work
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MEMORANDUM
TO: Mr. Ed Shikada, City Manager, City of Palo Alto
CC: Ms. Kiely Nose, Interim Assistant City Manager and Administrative Services Director/Chief
Financial Director
Mr. Steve Guagliardo, Principal Management Analyst
SUBJECT:
1.Attachment I: June 1 City Council Motion
2.Attachment II: Draft Economic Development Staffing Plan
3.Attachment III: Draft Economic Strategy Scope of Work
Introduction:
At the June 1 City Council meeting (Attachment I) staff was directed to prepare a staffing plan
that provided options for providing economic development services for the City. Most cities in
the Bay Area have an economic development program and staff to help sustain the local
economy and local businesses. There are basic duties performed by an economic development
staff person, but they may vary depending on the economic goals of the community and the
qualifications/experience of staff. Core duties focus on support/assistance of local businesses,
which continues be a priority as the pandemic continues and businesses attempt to recover.
Other duties include ongoing business outreach focused on small businesses, major employers,
business that generate significant revenue for the city’s general fund and providing tools and
resources that can help local businesses grow.
The draft staffing plan (Attachment II) includes descriptions of three types of economic
development staff positions. Most cities in the area have only staff person who has the title of
Economic Development Manager but there are a few that have two or three staff. Again, the
number of staff is driven by the scope of the economic development program and community
goals.
An option to permanent staff, is to have the economic development function fulfilled by an
outside consultant. The caveat is there are very few consulting firms that provide “staff” services.
These options are analyzed and presented in Attachment I: “Economic Development Duties and
Responsibilities.”
ATTACHMENT A
Attachment A - 1
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There was also a motion from the June 1 Council meeting to develop a scope of work that would
form the foundation of an economic strategy for the City. The strategy should focus on the
following key council priorities:
• Analysis of business registry underway.
• Strategies that can deal with ongoing economic and social changes resulting from the
COVID-19 pandemic.
• Strategies to enhance the City’s ability to support business and visitor travel opportunities
and bolster City hotels; and
• Opportunities to bolster City revenues that will sustain high quality services for residents.
Attachment III is a draft scope of work for a Request for Proposal from qualified consultants who
can assist the City in meeting the priority economic goals of the City Council and the community.
Many of the tasks listed in the scope are typically used to develop economic strategies but they
have been tailored and augmented to specifically address the four priorities listed above.
Community outreach will be a very important part of the consultant’s work as the strategy should
reflect input from the community about what is important to sustain economic vitality and a
strong base of general fund municipal revenues that will allow the City to 1) provide a diverse
array of goods and services for residents and 2) enhance the city’s physical and livability
environment.
This report was developed to give the City an opportunity to discuss and provide input on both
the draft staffing plan and the draft economic strategy scope of work.
ATTACHMENT A
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Attachment I: June 1 City Council Motion
ATTACHMENT A
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Attachment II: Draft Economic Development Staffing Plan
ECONOMIC DEVELOPMENT DUTIES AND RESPONSIBILITIES
At the June 1 City Council meeting, staff was directed to prepare a staffing plan that provided
options for providing economic development services. Table 1 lists the duties and responsibilities
of the City’s economic development staff person. Current economic development staff is an
interim assignment focused on helping local businesses deal with the impacts from the
pandemic’s economic disruption. Assistance includes providing current information about health
orders, resources (primarily grants and loans) available from the County, state, and federal
government, and answering questions from businesses may have. Even prior to the pandemic,
city economic development staff spent most of their time working with local small businesses
especially those located in downtowns and neighborhood commercial districts. A large
percentage of time is spent resolving issues between the business and the city’s permitting
process and other regulatory requirements.
TABLE 1
Duties and Responsibilities of Interim
Economic Development Staff – Business
Outreach and Support
Economic
Development
Specialist
Position
Economic
Development
Coordinator
Position
Economic
Development
Manager
Position
1. Primary responder to assist local
businesses during COVID-19.
X
X X
2. Primary point of contact for business
questions about re-opening, available
City and external resources, program,
funding (grants and loans), and other
miscellaneous business inquiries.
X
X
X
3. Coordinate and facilitate communication
with other City departments with
businesses regarding regulations that
affect them (permitting, fees, licenses,
etc.)
X
X
X
4. Provide conflict resolution between
businesses and building and fire
regarding code compliance and changing
health orders.
X
X
X
5. Conduct ongoing assessments of
storefront vacancies in the downtown
and commercial districts.
X
X
X
6. Create and maintain business contact
information.
X X X
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Duties and Responsibilities of Interim
Economic Development Staff – Business
Outreach and Support
Economic
Development
Specialist
Position
Economic
Development
Coordinator
Position
Economic
Development
Manager
Position
7. Cultivate close working relationship
between the City and Chamber of
Commerce.
X
X X
8. Leverage relationships with external
partners, such as the Chan Zuckerberg
Initiative, to maximize impact of grants to
local businesses.
X
X X
9. Facilitate stakeholder meetings with
merchant groups at the two downtowns
(University and California Avenues)
X
X X
10. Liaison with external stakeholder
organizations and support initiatives such
as Table 22 and Restaurant Rescue.
X
X
X
11. Liaison with the Farmer’s Market staff.
Developed market footprint changes to
allow vendors and outdoor dining to
share space on California Avenue.
X
X
X
12. Assist the Utilities Department with
Business Advantage Program.
X
X
X
Duties 1-6 in Table 1 (highlighted in yellow) would be considered basic economic development
responsibilities. Duties 7-12 involve outreach and engagement with specific stakeholder groups
which is also an expected responsibility, but the groups may vary in each community. Most
economic development programs in Silicon Valley are focused on business retention and
expansion (BRE). Expansion refers to the growth and development of businesses already located
in the community as well as any emerging clusters that have the potential to grow.
Table 2 lists fundamental economic development duties that are focused on business and
expansion (BRE). Rural and urban communities that lack sufficient jobs and business investment
also focus on recruitment of new businesses. In the past, Silicon Valley has been center of new
business formations and rapidly growing technology companies so there was not a need to
recruit new businesses from outside the region or state. Silicon Valley is also not a viable location
option for companies with cost sensitive operations.
ATTACHMENT A
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Table 2
Other Core Economic Development
Duties and Responsibilities
Economic
Development
Specialist
Position
Economic
Development
Coordinator
Position
Economic
Development
Manager
Position
Business Retention & Support
1. Implement consistent business
retention outreach to all key
business sectors such as small and
large employers; independent and
brand retail located in retail centers
and individual storefronts, hotels,
restaurants, and
X
X
X
2. Support large retail centers to
ensure there is flexibility for filling
vacant spaces with active uses,
assistance for retail tenants and
resolution of center issues such as
safety and parking.
X
X
X
3. Monitor industrial and office
vacancies; work with property
owners, brokerage community,
prospective tenants, and
developers to match available
vacant or underutilized properties
with desired commercial business
activities.
X
X
X
4. Works closely with other City
departments to successfully
facilitate permit processing of
economic development projects.
X
X
X
5. Monitor city fees to ensure that the
cost of doing business in Palo Alto
is competitive with surrounding
communities.
X
X
X
6. Review Downtown zoning and
building code requirements to
ensure there is flexibility for interim
uses that activate storefronts and
streets.
X
X
X
7. Monitor quarterly sales tax reports
to identify any shifts in revenue
X
X
X
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Other Core Economic Development
Duties and Responsibilities
Economic
Development
Specialist
Position
Economic
Development
Coordinator
Position
Economic
Development
Manager
Position
generated by key businesses and
develop actions to resolve any
discrepancies.
8. Conduct outreach quarterly to top
sales tax revenue generators (auto
dealerships, use tax generators,
retailers, etc.).
X
X
X
Building Capacity
1. Ensure infrastructure capacity can
support existing and new
businesses (broadband, sewer and
water treatment, transportation,
etc.)
X
X
X
2. Leverage partnerships with
stakeholder groups involved with
local businesses to expand
resources and technical assistance.
X
X
X
3. Recommends and oversees the use
of consultants and outside
professional service providers as
needed.
X
X
4. Research and monitor emerging
industry sectors, relevant to the
local economy.
X
X
5. Research and analyze local,
regional, and national economic
and demographic data and trends;
develop efficient methods of
maintaining current, needed data
on real estate trends, and related
issues.
X
6. Facilitate analysis and negotiation
of #7 including all technical
requirements such as pro-forma,
financial statements, applicable
laws, and regulation, etc.
(Note: preparation of financial
analysis such as proformas is
specialized expertise that
X
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Other Core Economic Development
Duties and Responsibilities
Economic
Development
Specialist
Position
Economic
Development
Coordinator
Position
Economic
Development
Manager
Position
consultants would provide for
projects)
7. Coordinates and prepares financial
and technical reports and budgets.
X
8. Coordinate and recommend project
activities including real estate
acquisition and disposition,
relocation, demolition, eminent
domain actions, building
construction and rehabilitation,
property management and project
improvements.
X
9. Provide timely, well documented
studies, analyses and reports that
provide a sound foundation for
policy decision recommendations
by the economic development
team and policy decision making by
the City Council.
X
Some Bay Area community economic development programs are focused on attracting and
facilitating new development such as the expanding biotech industry although most communities
do not allocate funds to market or promote to attract new businesses. More economic
development program staff engage in proactive outreach to retail brokers, retail center
developers, and new retail stores and formats to fill vacant space and boost general fund sales
tax revenue to support city services and amenities.
Staffing Plan Options
Position descriptions for an economic development specialist, coordinator and manager can vary
depending on the community; there is no uniform standard description of duties and
responsibilities. A specialist’s duties and required years of experience should be less than a
manager as the latter would have more years and greater breadth and depth of experience (and
education and training) that supports a higher complexity of work, judgment and decision
making. Depending on community goals and assets such as land for new development, staff may
not need to perform duties 6-8. Most economic development programs in surrounding
communities have only one staff with the title of economic development manager.
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If the community’s priority goals are to support local businesses and sustain tax revenue for the
general fund, then economic development duties can focus on achieving those outcomes. Based
on the description of duties and tasks undertaken by the temporary economic development staff
person, the City would benefit from a full-time position. An alternative to a permanent hire is to
find a consulting firm that can provide qualified staff on a full or part-time basis but there are
very few firms provide that service.
ATTACHMENT A
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Attachment III: Draft Economic Strategy Scope of Work
DRAFT ECONOMIC STRATEGY FOR THE CITY OF PALO ALTO
The City of Palo Alto, located in Santa Clara County, is a charter city that was incorporated in
1894 under the Council-Manager form of government. The City is located 33 miles south of San
Francisco; 17 miles north of San Jose; and 356 miles north of Los Angeles. Palo Alto promotes and
sustains a superior quality of life in partnership with the community. The City’s goal is to deliver
cost-effective services in a personal, responsive, and innovative manner.
Palo Alto’s population was 66,573 in 2020. This represents a 0.7 percent decrease over the
previous year and a 12.47 percent increase since 2000. The City has high educational attainment
at the elementary, middle school, high school, and college levels. The median household income
and median home price are among the highest of cities located in Silicon Valley.
Palo Alto has a strong inventory of rentable office and research and development space. Major
employers include Stanford University, VM ware Inc., SAP Labs Inc., Varian Medical Systems, and
hospitals and healthcare providers as well as strong retailers represented by car dealerships,
high-end specialty accessory stores, major department stores, and businesses that generate use
tax.
Like many cities, Palo Alto has experienced a significant economic impact from the COVID-19
pandemic which resulted in a major decrease in general fund revenues from sales/use and hotel
taxes. Many of these impacts will have longer-term effects. Compounding ongoing shifts in the
marketplace from increased online sales and restructuring in the retail industry, the City Council
feels it is important to evaluate economic impacts and trends by engaging a consultant to
prepare an economic strategy that addresses challenges and identifies opportunities that arise as
the economy recovers.
The consultant(s) should have the expertise to produce a focused strategy plan that covers both
a short-term (three years) and longer-term (beyond three years) horizon. Both approaches
should be framed by City’s economic and community vision. Important elements of the vision
include:
• Providing excellent services to the residents and community at large
• Ensuring citizens have an active voice in government services.
• Preserving the diverse character of Palo Alto and the City’s livable neighborhoods
The City’s priority goals include sustaining businesses that contribute to economic vitality and
strong base of general fund municipal revenues that allow the City to continue to provide a
diverse array of goods and services for residents and enhance the city’s physical and livability
environment. Another goal is to support and maintain a mutually beneficial relationship with
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Stanford University which has made rich contributions to the City and the community. Finally, as
a considerably developed City, most new or rehabilitation development will occur within Palo
Alto’s business employment districts and will be consistent with the role and character
designated for those districts by the City’s Comprehensive Plan.
The strategy plan should leverage and build on recent economic development efforts (that
primarily addressed impacts from the COVID-19 pandemic) as well as previous plans and studies
and current data and findings from research to be completed for this plan. Reliance on existing
data and relationships will be important to maintain and expedite the completion of this
engagement. The strategy should address four priority areas that include:
• Analysis of business registry underway.
• Strategies that can deal with ongoing economic and social changes resulting from the
COVID-19 pandemic.
• Strategies to enhance the City’s ability to support business and visitor travel opportunities
and bolster City hotels; and
• Opportunities to bolster City revenues that will sustain high quality services for residents.
As a highly educated community, with diverse perspectives from all members, it is expected that
this work be completed in a wholistic and engaging manner. The City has worked hard to
develop relationships with the business community, Stanford University, and the residential
population that must all be considered, consulted, and engaged in this effort. Outreach should
strive to meet these different populations where they reside and should include a variety of
approaches such as, but not limited to, focus groups, interviews, surveys, social media, and other
innovative communication tools. With significant outreach and likely divergent views, it is critical
that any final products from this engagement be grounded in facts, be engaging in content and
format, tell Palo Alto’s full story as viewed by all stakeholders. To ensure communication of
these items the report or final product should include graphics and visual elements, relevant case
examples, and best practices as key expectations of this assignment.
The consultant(s) shall provide professional services to accomplish the following goals; the
proposal is expected to articulate the consultant recommendations for meeting these goals (e.g.,
tasks to be completed, data to be used, stakeholder engagement to be deployed). Proposals are
expected to leverage and utilize the expertise of the submitter, best practices, and industry
standards to guide the work. Leveraging existing data, focusing on fact-based analysis, and using
anecdotal and survey type information as supplemental and storytelling perspectives will be
important to meet timelines, establish well rounded credibility and demonstrate balanced
professional expertise that take in consideration not only a typical economic development scan
or strategy but one tailored to the characteristics and community of Palo Alto specifically.
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Whenever possible, the consultant should address key impacts and findings with recommended
strategies for a three-year and then a longer-term horizon so that the City can anticipate and
prepare for economic shifts (beyond three years). Best practices and case examples that are the
most relevant and practical for Palo Alto’s strategy are important, but the City also welcomes
new, innovative ideas that can achieve results.
The proposal should specifically address the following:
These are organized by the specific task outlining the desired goal or outcome, with further areas
for consideration to facilitate proposers understanding of questions or areas of specific focus that
may be of assistance. Proposers are expected to provide professional expertise and guidance on
how they propose to attain the requested goals/outcomes. Identification of near term versus
longer-term strategies will be helpful. Inclusion in the proposal of the data recommended to be
used, with a focus on existing available information, will be critical in review of the proposed
method to attain the desired goals.
A. Reconfirm the appropriate City economic development goals and objectives that will guide
strategy. The current identified focus areas include:
1. Analysis of business registry underway.
2. Strategies that can deal with ongoing economic and social changes resulting from the
COVID-19 pandemic.
3. Strategies to enhance the City’s ability to support business and visitor travel opportunities
and bolster City hotels; and
4. Opportunities to bolster City revenues that will sustain high quality services for residents.
B. Complete a scan of existing economic conditions within the City of Palo Alto limits.
1. A scan of current conditions should ground the report in the status specifically within City
limits (key attention to City boundaries versus County unincorporated, and neighboring
jurisdictions is important) and, as much as possible, ultimately establish a baseline profile.
Characteristics and data likely to be included in the baseline may include but not limited
to:
a. Identify existing and emerging industry clusters and assets unique to the region and
whenever possible, Palo Alto including key metrics. Key metrics may include number
of jobs, wages, and growth potential.
b. Determine which existing and emerging clusters will add the most value to the City’s
economy.
c. Identify existing Palo Alto specific challenges that constrain or facilitate growth such
as infrastructure, transportation/logistics, access to capital, availability of talent,
government regulatory policies, workforce, availability of sites and buildings. Helpful
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outcomes would include What can the City to optimize their growth and retain these
businesses?
2. Create an economic snapshot template for the City and the region that can be updated
with current data and indicators (information should be important to business location
decisions).
3. Include a focus area specifically on office and industrial space trends assisting in providing
context of metrics such as vacancy rates and major tenants.
C. Acknowledge key global and national economic trends, events, indicators, and forecasts and
in the context of this environment.
1. Assess the impact on the region and the City of Palo Alto specifically.
2. Identification of impacts on City’s business sectors, tangible strategies, and actions that
the City could undertake to prepare for shifts. Note: particular interest is around retail,
travel, and high tech.
D. Identify and scope out tangible and actionable options for strategies to deal with impacts on
local businesses caused by pandemic. Key insights that would be critical for inclusion may
include but not limited:
1. Understanding and data summarizing the local economy and business environment prior
to the COVID-19 (2019), an estimate of losses incurred during the primary year of the
pandemic (2020) and gains that have occurred since the “recovery” post June 15, 2021.
2. Use analysis and implications of aggregate sales/tax revenue for key categories of
businesses located City-wide (auto dealers, restaurants, high end retail brand stores), in
downtown, commercial districts, regional and neighborhood shopping centers, to project
post-pandemic performance and trends.
3. Identify key market and operating challenges local businesses continue to face; resources
and tools needed for sustainability; and what the City can do to assist them. (This should
build from efforts already conducted by the City to obtain this information.)
4. Identify relevant programs and resources that can help local businesses expand their
customer base that include new operating formats, marketing and promotions, and
campaigns to increase shopping by residents.
E. Identify additional opportunities to bolster revenue needed to ensure high quality services for
residents. (Note: the consulting team should include a retail/sales/use tax expert(s) who has
worked directly with retail businesses and understands their location and market
requirements as well as changes in consumers’ shopping preferences).
1. Provide a baseline summary and data to articulate the presence of retail space available
City-wide that includes both existing and opportunity sites.
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2. Provide an understanding of the current mix of tenants in major commercial districts,
downtown and shopping centers and how location and market strengths and weaknesses
may impact major retail centers, downtown, and commercial districts.
3. Identify existing brand retailers currently located in the City that are performing well and
those at risk.
4. Ensure clarity of any other barriers or threats to the City’s high performing retailers
located in the City, consequences or risk associated with losing those retailers and
strategies for building sustainability in the retail base.
5. Conduct a retail gap or void analysis and align it with sales tax leakage occurring in the
City to identify any new retail opportunities that may be a fit for Palo Alto.
6. Review the City’s major sources of use tax revenue to identify strengths, weaknesses, and
opportunities with respect to pre-COVID, current performance and short-term (three
years) projections.
7. Provide recommendations with respect to actions, tools, and policies the City can utilize
to storefront reduce vacancies by activating marginal or vacant storefronts and reuse of
large store formats.
F. The travel industry (both business and visitor) has been particularly impacted by the
pandemic. Identify opportunities to support Palo Alto Hotels and the travel/visitor activity in
Palo Alto. (Note: the consulting team should include a travel industry expert who has worked
with convention/visitors’ bureaus, hotels, meeting facilities, transportation, event, and
conference management.)
1. In the context of existing business and tourism sector with respect to local and regional
assets and amenities such as cultural attractions, events, meeting and conference
facilities, and lodging (all types) to provide an estimate market recovery for room
occupancy, domestic and foreign air travel, meetings/conferences, and the specific ties to
the Palo Alto visitor activities.
2. Identify changes in corporate travel policies resulting from COVID-19 that will have an
impact on recovery of this sector.
3. Provide strategies that could enhance economic recovery of this sector in the City.
G. Assess City’s business registry with identification of current gaps and addressing those where
possible.
1. Provide observations and a conclusive summary of the City’s business population
including total count and profile by business type for use in execution of the above
strategies for support. A key goal of this assessment is data driven analysis on the current
characteristics of the business population in Palo Alto and shifts in the business mix.
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2. Examples of helpful data or analysis needed to establish a profile of the City’s business
population may include the following list, though collection of to establish a new
database would be an additional task order subject to approval as needed.
a. Types of businesses
b. Business structure
c. Days and hours of operation
d. Transportation assistance and benefit
e. Number of employees
f. Number of storefronts versus home-based businesses
g. Number of businesses subject to Business Improvement District assessment
REPORT FORMAT
The report is expected to be in a written form with actionable plans to address the goals
identified by the City Council. It should include narrative, graphics, and communication through
infographics to articulate the proposed strategies. In addition, there should be a presentation
deck (no longer than 15 minutes) included in the submittal as an addendum.
AVAILABLE RESOURCES
The following documents are available for reference and should help shape the Economic
Strategy:
• City’s Comprehensive Plan
• Past polling and feedback from the business community (e.g., surveys completed as part
of the pandemic as well as prior polling for potential ballot measures)
• Staff reports discussing the impacts of the pandemic and current strategies deployed such
as parklets and street closures
• Annual budget documents include economic information, demographic data, and revenue
specific information
• Existing database of business registry information maintained by a third party
• Tax specific reporting such as quarterly sales tax summary reports and property tax
summary information
• City maintains subscription access to industry data such as CoStar and UCLA Anderson
Forecast
• Current City business registry data
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