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Home My WebLink About2026-08-26 Economic Development Committee Agenda PacketECONOMIC DEVELOPMENT COMMITTEE Special Meeting Wednesday, August 26, 2026 Community Meeting Room & Hybrid 4:30 PM Economic Development Committee meetings will be held as “hybrid” meetings with the option to attend by teleconference/video conference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 76, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/85845544145) Meeting ID: 858 4554 4145 Phone: 1(669)900-6833 PUBLIC COMMENTS General Public Comment for items not on the agenda will be accepted for up to three minutes or an amount of time determined by the Chair. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In- person general public comment will be heard for 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda. Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s presentation or as determined by the Chair. Written public comments can be submitted in advance to city.council@PaloAlto.gov and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line. Multiple individuals who wish to speak on the same item may designate a spokesperson. Spokespersons must be representing five or more verified individuals who are present either in person or via zoom. Spokespeople will be allowed up to 10 minutes, at the discretion of the presiding officer. Speaking time may be reduced if the presiding officer reduces the speaking time for individual speakers. PowerPoints, videos, or other media to be presented during public comment are accepted only by email to city.clerk@PaloAlto.gov at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks, posts, poles or similar/other types of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting. 1 Regular Meeting August 26, 2026 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. CALL TO ORDER IN-PERSON PUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda. ACTION ITEMS 1. Business Retention, Expansion, and Attraction (BRE/A) Strategy 2. Economic Development Activity Report August 2026 FUTURE MEETINGS AND AGENDAS Members of the public may not speak to the item(s) VIRTUAL PUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda. ADJOURNMENT 2 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1.Written public comments may be submitted by email to city.council@paloalto.gov. 2.For in person public comments please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item. 3.Spoken public comments using a computer or smart phone will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom- based meeting. Please read the following instructions carefully. ◦You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. ◦You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. ◦When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. ◦When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4.Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 858-4554-4145 Phone: 1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@paloalto.gov. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. 3 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. California Government Code §84308, commonly referred to as the "Levine Act," prohibits an elected official of a local government agency from participating in a proceeding involving a license, permit, or other entitlement for use if the official received a campaign contribution exceeding $500 from a party or participant, including their agents, to the proceeding within the last 12 months. A “license, permit, or other entitlement for use” includes most land use and planning approvals and the approval of contracts that are not subject to lowest responsible bid procedures and have a value over $50,000. A “party” is a person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use. A “participant” is a person who actively supports or opposes a particular decision in a proceeding involving a license, permit, or other entitlement for use, and has a financial interest in the decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform Act, which encompasses interests in business entities, real property, sources of income, sources of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a “party” or “participant” to a proceeding, and you have made a campaign contribution to a Council Member exceeding $500 made within the last 12 months, you must disclose the campaign contribution before making your comments. 4 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. Economic Development Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: August 26, 2026 Report #:2603-6165 TITLE Business Retention, Expansion, and Attraction (BRE/A) Strategy RECOMMENDATION The Economic Development Committee will receive a presentation on the 2026 Business Retention, Expansion, and Attraction (BRE/A) Strategy, and make a recommendation to the City Council to approve the strategy. EXECUTIVE SUMMARY At the January 24, 2026, Council Retreat, the Palo Alto City Council reached consensus on adopting a 2026 Economic Development priority titled, “Enhance Business Vibrancy”. The City Council acknowledges the importance of Economic Development and the intersection between a healthy local economy and the City’s long-term fiscal sustainability. The City of Palo Alto continues to build from the current Economic Development Strategy to achieve the City Council’s goals and priorities. The Economic Development team has developed a 2026 Business Retention, Expansion, and Attraction (BRE/A) Strategy to create a sustainable, resilient, and thriving local economy characterized by a strong sense of identity in Silicon Valley. The BRE/A Strategy was on the March 18, 2026 Economic Development Committee’s agenda, but due to other priority items, the strategy was not considered by the Committee. BACKGROUND Economic Development is taking a proactive approach to advocating for Palo Alto’s business and entrepreneurial ecosystem that is reflective of the population it serves. Economic Development is a concerted effort by the City of Palo Alto’s City Council to ensure that the business climate is healthy. As such, the Economic Development team recommends that the Economic Development Ad Hoc Committee (formerly Retail Ad Hoc Committee) receive a BRE/A Strategy presentation and make a recommendation to the City Council to approve the strategy. Item 1 Item 1 Staff Report Item 1: Staff Report Pg. 1 Packet Pg. 5 of 16 ANALYSIS A Business Retention, Expansion, and Attraction (BRE/A) Strategy has formalized Economic Development’s Work Plan for calendar year 2026. The BRE/A Strategy consists of identifying key industries for retention, expansion, and attraction, proactive business engagement to build strategic partnerships, determining areas where the City of Palo Alto can gain a competitive advantage, and providing support for a favorable business environment that can lead to increased employment opportunities and overall economic prosperity. The BRE/A Strategy will result in preserving and enhancing the local business climate to ensure the City is fiscally stable to provide essential services that the Palo Alto community deserves. The BRE/A Strategy includes two tactical categories: Enhance Business Vibrancy and Engagement and Promotions. While the BRE/A Strategy is meant to develop a formal business retention, expansion, and attraction program, other key components include strengthening the tax base, developing a competitive advantage, real estate assets, business and community engagement, and promotions and marketing through activation activities and events as well as enhancing the Palo Alto brand in innovation and entrepreneurship globally. The BRE/A Strategy’s implementation actions are outlined below and more in depth via Attachment A: EDC BRE/A Strategy. Enhance Business Vibrancy: Strengthening the Tax Base Sales Tax, Property Tax, and Transient Occupancy Tax Revenue Bases - Corporate Visitation Program New Investment Opportunities - Financial and Non-Financial Incentives Competitive Advantage Venture Capital, Incubators, and Accelerators - VCs, Incubators/Accelerators and Foreign Direct Investment Business Technical Assistance - Guide Businesses to Build Capacity and Reach Business Goals Real Estate Assets Real Estate Network - Property Owners/Managers and the real estate brokerage and development communities City Real Estate Assets - Leverage the City’s Real Estate Assets for Revenue Generation Item 1 Item 1 Staff Report Item 1: Staff Report Pg. 2 Packet Pg. 6 of 16 Engagement and Promotions: Public-Private Partnerships (P3s) - Build Trust/Collaboration for Effective Partnerships Entertainment Zone Ordinance- Approved by the City Council in late spring 2026 2026 Activities and Events - Cultivate Vibrant Public Spaces that Attract Investment Enhance the Palo Alto brand through innovation and entrepreneurship branding The ten BRE/A Strategy implementation actions described above will be completed with staff time as part of the 2026 Economic Development work program not requiring any additional funds. At the January 24, 2026, City Council Retreat on values and priorities the objectives #29 and #34 delineated the development of a formal business retention/expansion program focused on supporting and growing existing Palo Alto businesses and a plan to diversify local economy and increase the tax base for essential public services through business attraction, as well as activation activities and events to increase placemaking, investment, and branding opportunities. Economic Development staff has received support for the proposed BRE/A Strategy from the Chamber of Commerce, especially as it relates to business retention, branding, and reestablishing the Downtown Business Improvement District for cleanliness and public safety. The receipt and acceptance of the BRE/A Strategy is not a project under the California Environmental Quality Act (CEQA) because the BRE/A Strategy has no potential to cause a significant effect on the environment. CEQA Guidelines section 15061(b)(3). Attachment A: Economic Development Committee BRE/A Strategy : Ed Shikada, City Manager Item 1 Item 1 Staff Report Item 1: Staff Report Pg. 3 Packet Pg. 7 of 16 Economic Development Ad Hoc Committee Business Retention, Expansion, and Attraction (BRE/A) Strategy Attachment A The Business Retention, Expansion, and Attraction (BRE/A) Strategy is bounded by two strategic categories: Enhance Business Vibrancy and Engagement and Promotions. The two categories are supported by ten Economic Development focused implementation actions for calendar year 2026, which are summarized below. Enhance Business Vibrancy • Business Retention, Expansion and Attraction (BRE/A) Strategy – Enhancing Business Vibrancy is a 2026 City Council priority. • Strengthening the Tax Base o Sales tax, property tax, and transient occupancy tax revenue bases - Establish a formal Corporate Visitation Program. Review quarterly data for sales and transient occupancy tax revenues and bi-annually for property tax revenues to identify and respond to changing trends. Performance Metric: Convene up to three of the top twenty-five sales tax generators by the end of 2026 with the goal of retaining businesses that enhance the City’s long -term fiscal sustainability on a quarterly basis. o New Investment Opportunities - Encourage new investments that create economic impact, multiplier effects and sales tax revenue. Performance Metric: Staff will explore financial and non-financial incentives and develop a list to support, retain, and grow business opportunities to drive economic vitality by Quarter 3 2026, and present to the Economic Development Ad Hoc Committee for review and feedback. • Competitive Advantage o Venture Capital, Incubators, and Accelerators - IDA Ireland, Japan Innovation Campus (JIC), Consulate General and Innovation Centre Denmark, Nordic Innovation House, Flanders Investment and Trade (FIT), The Hive, Archimedes Labs, StartX, Venture Dock, etc. Performance Metric: Meet with at least four Venture Capital investment firms, incubators, and accelerators to develop foreign direct investment (FDI) opportunities and continue to cultivate the innovation and entrepreneurial ecosystem by the end of calendar year 2026. Item 1 Attachment A - Economic Development Committee BREA Strategy Item 1: Staff Report Pg. 4 Packet Pg. 8 of 16 o Business Technical Assistance - Performance Metric: Partner with the Silicon Valley Small Business Development Center (SV SBDC), Small Business Administration (SBA), SCORE, Chamber of Commerce, etc. to host two small business (live and virtual) training workshops in 2026. • Real Estate Assets o Real Estate Network - Property Owners, Real Estate Brokerage, Property Managers, and Development Community Network to foment relationships to fill vacant spaces and attract a mix of retail, office, and industrial businesses to enhance diversity of businesses for a broader customer base. Performance Metric: Economic Development will host a Real Estate Broker roundtable by Quarter 4 2026 to learn about new opportunities, market trends, new uses, permit processes, and align development efforts with market needs. o City Real Estate Assets – Leverage City’s real estate assets for revenue generation. Performance Metric: Economic Development will execute a lease with Nobu for the use of 20 valet services parking spaces in Parking Lot Q by Quarter 3 2026 to generate new revenues for the City. Engagement and Promotions • Business and Community Engagement o Public-Private Partnerships - Engagement fosters trust and collaboration, allowing for effective partnerships that leverage resources for community projects - Performance Metric: Economic Development will promote the Retail Vibrancy Ordinance reflecting flexibility in land use/zoning to the real estate network starting in Quarter 3, establish two office hour events on California Avenue and Downtown for additional business and community engagement opportunities, and reengage with business and property owners via Downtown/University Avenue Stakeholders meetings to address public safety and cleanliness through a Business Improvement District (BID), and University Avenue infrastructure improvements by the end of 2026. o Open Container Resolution and Entertainment Zone - Performance Metric: Economic Development presented to the Economic Development Ad Hoc Committee to obtain a recommendation for the City Council’s consideration of a California Avenue Entertainment Zone Ordinance in Quarter 2 2026. • Promotions and Marketing Item 1 Attachment A - Economic Development Committee BREA Strategy Item 1: Staff Report Pg. 5 Packet Pg. 9 of 16 o 2026 Activities and Events - Performance Metric: Economic Development will partner with businesses, Palo Alto Recreation Foundation, and Chamber on at least 3 California Avenue activities (Thursday Live/FIFA World Cup) and promote the hospitality sector (digital/print) during the 2026 sporting and concert events timeframe. o Innovation and Entrepreneurship Branding - Enhance the Palo Alto brand in innovation and entrepreneurship globally. The Palo Alto brand is intrinsically tied to its proximity to technology businesses, world-class institutions, and its creative workforce. Performance Metric: Economic Development will partner with foreign investment offices to strengthen global partnerships through foreign direct investment (FDI) and destination marketing. A destination marketing website will be developed and launched in early Quarter 4 2026 in collaboration with the Chamber of Commerce. The BRE/A Strategy lays a foundation for creating a vibrant, resilient, inclusive, and diversified economic future. Notwithstanding, the BRE/A Strategy highlights the need for a future Economic Development Strategy that serves as a policy document that will guide the City of Palo Alto’s economic development activities for a designated period. Should the City Council consider a new Economic Development Strategy, it would align with the City’s Comprehensive Plan and the Economic Development Element, Sustainability and Climate Action Plan (S/CAP), and other City policy documents. A new Economic Development Strategy will serve as Palo Alto’s road map to grow and diversify the local economy, support businesses and workers, and improve the quality of life for Palo Altans. Item 1 Attachment A - Economic Development Committee BREA Strategy Item 1: Staff Report Pg. 6 Packet Pg. 10 of 16 Economic Development Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: August 26, 2026 Report #:2607-6548 TITLE Economic Development Activity Report August 2026 RECOMMENDATION Staff recommend that the Economic Development Committee receive this Economic Development Activity Report for the month of August 2026. EXECUTIVE SUMMARY This August 2026 Economic Development Activity Report presents information on the City’s retail landscape, recent business openings, Palo Alto Labor Force/Unemployment statistics, and other economic development updates. BACKGROUND The Economic Development Committee, established in 2024 (under the name Retail Committee) and continued in 2025, is a Council Ad Hoc committee that follows the California Brown Act. The Committee provides a regular forum for business and community stakeholders to engage with Council members on implementation of the City’s economic development initiatives. The Economic Development Committee makes recommendations to the City Council on economic development and business vibrancy efforts, such as additional business support, proposed University and California Avenue improvements, and citywide retail zoning code changes, to name a few work plan efforts. At the January 24, 2026, Council Retreat meeting on values and priorities the City Council reached consensus on adopting a 2026 Economic Development priority titled, “Enhance Business Vibrancy” and renamed the Retail Ad Hoc Committee to the Economic Development Ad Hoc Committee, reflecting a broader focus on supporting business districts in Palo Alto. This priority emphasizes continued engagement with business districts and the hospitality sector through proactive outreach, collaboration, and partnership to strengthen the City’s overall business environment. Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 1 Packet Pg. 11 of 16 ANALYSIS CoStar Information University Avenue Business District Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 2 Packet Pg. 12 of 16 Approximately 86,704 square feet of retail space was available in the University Avenue California Avenue Business District Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 3 Packet Pg. 13 of 16 Business Openings Through a separate report, staff are also able to track all businesses that apply for a Certificate of Use and Occupancy. This report allows Economic Development staff to connect with businesses as they begin navigating the development process. This includes upcoming openings like Gavin Piemsomboon (3939 El Camino Real) and Herman Miller (180 El Camino Real). In addition, staff have identified other notable business activity. Bistro Demiya hosted their grand opening on June 27, 2026, at 407 Lytton Ave. CardVault Palo Alto is expected to have their grand opening August 15, 2026, at 855 El Camino Real Ste #125. Marufuku Ramen at 374 University Ave hosted their opening on July 25, 2026. Finally, Hauser & Wirth is expected to have their opening on October 3 at 201 Hamilton Ave. Labor Force/Unemployment As more businesses open in the City of Palo Alto, employment opportunities grow, creating more jobs strengthening the local economy. The chart below presents data from the Employment Development Department's Monthly Labor Force Report released June 2026. According to the report, Palo Alto ranks sixth among Santa Clara County cities for largest employment. Area Name Labor Force Employment Unemployment Census Ratios Number Rate Empy Unemp Palo Alto 33,300 32,000 1,300 3.8% N/A N/A Full report can be found in the Employment Development Departments website1. Economic Development Updates Partnerships/Events Through a partnership between the City and the Chamber of Commerce, and feedback from local hotel representatives, a Destination Marketing website is currently under development to promote Palo Alto as a visitor destination. The website will showcase a variety of businesses and experiences, providing visitors with resources to explore and discover what the city has to offer. The Destination Marketing website is expected to be launched in Q4 2026. The Festival of the Arts returns for its 43rd year on Aug. 22–23, 2026, transforming nine blocks of downtown's tree-lined University Avenue into an outdoor arts festival from 10 a.m. to 6 p.m. 1 EDD Report: https://labormarketinfo.edd.ca.gov/data/labor-force-and-unemployment-for-cities-and-census- areas.html#CCD Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 4 Packet Pg. 14 of 16 each day. Community members should expect street closures and detour routes in the area throughout the event. BTS concert held at Stanford Stadium on May 16, May 17 and May 19, 2026, attracted a total of 152,000 attendees. Based on ticketing data, Oxford Economics estimates that the 152,000 total tickets sold across all three concerts included approximately 63,000 (41%) tickets sold to local patrons and 89,000 tickets (59%) sold to non-local patrons. The 89,000 tickets sold to nonlocal patrons included 19,000 tickets sold to non-local day trip patrons and 70,000 tickets sold to non-local overnight patrons. The data indicates that spending by non-local patrons, both on-site and off-site, resulted in a significant regional economic impact benefiting local restaurants, retailers, and recreation/entertainment venues. Based on the success of these events, Stanford plans to continue these activation efforts. California Avenue Thursday Live hosted two events that activated the Entertainment Zone following its implementation in early June 2026. The first event, held in June, featured a Taste of California Avenue theme, while the second, held in July, featured a Wine Walk. Each event offered a vibrant mix of live music and local artists, giveaways, a photo booth experience, and a family activity zone. Attendees also had the opportunity to enjoy alcoholic beverages purchased from participating local businesses, creating a lively and welcoming atmosphere that supported local merchants and encouraged visitors to experience California Avenue. Upcoming Thursday Live Events are scheduled for August 27, September 24, and October 31. On June 1, the City Council approved the Outdoor Dining Program3, which includes the Outdoor Dining Guidelines and Pre-Approved Parklet designs for the car-free portion of California Avenue. Economic Development and Public Works staff are engaging interested businesses in parklets and café-style seating and guiding them on the appropriate permit process. On June 15, the City Council also approved funding for the repaving of the closed portion of California Avenue4. During the June merchant meeting, staff presented to the California Ave merchants outlining the implementation timeline for the approved guidelines, and street repaving. Aligning the implementation with the repaving project is intended to minimize disruptions for businesses. The anticipated repaving completion date is October 10, 2026. FISCAL/RESOURCE IMPACT No additional funding is needed at this time for the information provided in this report. The 3 Outdoor Dining Program Motion: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=18728&compileOutputType =1 4 June 15th Council Meeting Action Minutes: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=18740&compileOutputType =1 Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 5 Packet Pg. 15 of 16 City’s Economic Development and Retail Vibrancy efforts may result in changes to revenues, STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW APPROVED BY: Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 6 Packet Pg. 16 of 16