HomeMy WebLinkAboutStaff Report 2603-6165CITY OF PALO ALTO
Retail Committee
Regular Meeting
Wednesday, August 26, 2026
4:30 PM
Agenda Item
1.Business Retention, Expansion, and Attraction (BRE/A) Strategy Staff Presentation
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.
ANALYSIS
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
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
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.
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
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.
Economic Development
Committee
Business Retention, Expansion
& Attraction (BRE/A) Strategy
Alex Andrade
Assistant to the City Manager -
Economic Development Manager
August 26, 2026
2
Business Retention, Expansion & Attraction (BRE/A) Strategy
•The BRE/A Strategy includes two tactical categories
•Enhance Business Vibrancy
•Engagement & Promotions
•The BRE/A Strategy develops a formal business retention,
expansion, & attraction program
•Strengthening the tax base
•Developing a competitive advantage
•Real estate assets
•Business & community engagement
•Promotions, marketing, & activation activities
3
Enhance Business Vibrancy: Strengthening the Tax Base
Objective: Sales, Transient Occupancy & Property Tax Revenue Bases
•Establish a formal Corporate Visitation Program - Top 25 businesses
•Sales, transient occupancy & property tax revenues data - respond
to changing trends
Objective: New Investment Opportunities
•Encourage new investments that create economic impact, multiplier
effects, & revenue increases
•Explore financial & non-financial incentives
•Support & grow business opportunities to drive economic vitality
TITLE 40 FONT BOLD
Subtitle 32 font
August 26, 2026
Objective: Venture Capital, Incubators, & Accelerators
•IDA Ireland, Japan Innovation Campus (JIC) & Nordic Innovation House
•Consulate Gen./Innovation Centre Denmark & Flanders Investment &
Trade
•Develop foreign direct investment (FDI) opportunities
•Continue cultivation of innovation & entrepreneurial ecosystem
Objective: Business Technical Assistance
•Technical assistance to support & guide businesses to overcome challenges
•Build capacity & achieve specific business goals
•SV Small Business Development Center – Access to Capital Training
PaloAlto.gov/Business
Enhance Business Vibrancy - Competitive Advantage
4
5
Enhance Business Vibrancy – Real Estate Assets
Objective: Real Estate Network - Property Owners, Real Estate
Brokerage, Property Managers & Development Community Network
•Foment relationships to fill vacant spaces & attract mix of retail, office, &
industrial businesses
•Enhance diversi ty of businesses for a broader customer base
•Economic Development will host a Real Estate Broker roundtable
Objective: City Real Estate Assets
•Leverage the City’s real estate assets for revenue generation
•Economic Development will execute a License Agreement with Nobu for
the use of 20 valet services parking spaces in Parking Lot Q
TITLE 40 FONT BOLD
Subtitle 32 font
August 26, 2026
Objective: Public-Private Partnerships (P3)
•Engagement fosters trust & collaboration, allowing for effective partnerships that leverage resources for
community projects: Retail Vibrancy Ordinance, BID, & DT/Univ. Ave. Stakeholders
•Promote Retail Vibrancy Ordinance reflecting flexibility in land use & zoning
•Office hour events on Cal Ave & University Ave. for additional business/community engagement
Objective: Entertainment Zone Ordinance
•Entertainment Zone Ordinance - Approved by the City Council in late spring 2026
Engagement & Promotions - Business & Community Engagement
PaloAlto.gov/Business 6
TITLE 40 FONT BOLD
Subtitle 32 font
August 26, 2026
Objective: 2026 Activities & Events
•Cultivate vibrant, "sticky" public spaces & investment while boosting local business
•Activities & Events - Thursday Live, FIFA World Cup, BTS Concerts, etc.
Objective: Innovation and Entrepreneurship Branding
•Enhance Palo Alto brand in innovation and entrepreneurship globally
•Partner with foreign investment offices to strengthen global partnerships
•Foreign Direct Investment (FDI)
•Destination marketing website in partnership with the Chamber of Commerce
PaloAlto.gov/Business
Engagement, Promotions, & Marketing
7
8
Destination Marketing
9
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.
Alex Andrade
Assistant to the City Manager &
Economic Development Manager
Alex.Andrade@PaloAlto.gov
650.496.5039
PaloAlto.gov/Business 10