HomeMy WebLinkAbout2013/09/17 Item 12 Attachment A4 - Corp Location AssessmentAppendix – Competitive Location Assessment
August 2013
Chula Vista Business Cluster Analysis
Leveraging Unique Assets to Compete Globally
“This study was partially supported by the Chula Vista Local Government Partnership,
which is funded by California utility ratepayers and administered by San Diego Gas &
Electric, under the auspices of the California Public Utilities Commission.”
Chula Vista Competitive Location Assessment August 2013
Chula Vista Competitive Location Assessment August 2013
Acknowledgements
Tom Adler
City of Chula Vista
Charlie Adolphe
Adolphe Commercial Real Estate
Leo Alarcon
South County Career Center
Jason Anderson
CleanTECH San Diego
Sean Barr
San Diego Regional EDC
Dr. Ron Baza
Southwestern College
Wolf Bielas
RSID Technologies
Andy Berg
National Electrical Contractors Assoc.
Paul Borden
Otay Land Company
Kenneth Brown
Leviton
Efrem Bycer
San Diego Regional EDC
Daniel Canavan
Nypro
Victor Castillo
Southwestern College
James Clark
San Diego Reg’l Chamber of Commerce
Tracy Clark
Voit Commercial
Michael Derr
DNP
Michele Dingle
United Technologies
Scott Finn
Southwestern College
Bob Friar, Sr.
Chula Vista Electric Company
Todd Galarneau
The Corky McMillan Companies
John Giaquinta
Data Center & Colocation
Cindy Gompper-Graves
South County EDC
Linda Greenberg
Colliers International
Gary Halbert
City of Chula Vista
Thomas Harwell
Raytheon
Mary Ladiana
City of Chula Vista
Martin Lodge
United Technologies
Christina Anne Luhn
San Diego Regional EDC
Leo Matthieu
Southcoast Welding & Mfg.
Evan McLaughlin
San Diego Labor Council
Derek McMahon
McMahon Steele
Michael Meacham
City of Chula Vista
Christine Moore
AT&T
Karen Prescott
National Electrical Contractors Assoc.
James D. Sandoval
City of Chula Vista
Todd Roberts
Marine Group Boat Works
Flavio Oliveri
Tijuana EDC
Brendan Reed
City of Chula Vista
Duane Roth
CONNECT
Craig Ruiz
City of Chula Vista
Lauree Saba
San Diego Regional EDC
Chris Schodowski
Leviton
Mink Stavenga
Southwestern College
Seth Stein
Green Talent Staffing
Anne Steinberger
City of Chula Vista
Debbie Trujillo
Chula Vista SBDC
Mike Vogt
IRE Development
Jerry Rindone
Chamber of Commerce
Chula Vista Competitive Location Assessment August 2013
Chula Vista Competitive Location Assessment August 2013
Table of Contents
Introduction ..................................................................................................................... 1
Project Objective.......................................................................................................... 2
1.0 Competitive Location Assessment ............................................................................ 4
2.0 Findings ..................................................................................................................... 5
2.1 Corporate Location Exercise Evaluation Sheet ..................................................... 7
2.2 Existing & Planned Real Estate Portfolio ............................................................. 18
2.3 Assets .................................................................................................................. 22
2.4 Challenges & Constraints .................................................................................... 26
3.0 Recommendations .................................................................................................. 30
4.0 Reports & Background Research ............................................................................ 40
Chula Vista Competitive Location Assessment August 2013
Introduction
CLIENT
Chula Vista Competitive Location Assessment August 2013
Page 1
Introduction
The City of Chula Vista (City), the second largest city in
San Diego County, is located seven miles south of
downtown San Diego and seven miles north of the
Mexican border. Chula Vista encompasses 52 square
miles of land area bounded by San Diego Bay to the
west, Sweetwater River to the north, Otay Lakes and
the San Miguel Mountains to the east, and Otay River
to the south.
According to the U.S. Census Bureau, in 2010 the City had a population of
approximately 244,000, mostly comprised of Hispanics (58%) and whites (20%).
The City is a highly desirable place to live and work offering residents and workers a
range of housing options and numerous shopping, dining, and leisure opportunities
including the Otay Ranch Town Center “main street” retail development, a historic
downtown, the U.S. Olympic Training Center, Chula Vista Nature Center, Living Coast
Discovery Center, and the Sleep Train Wireless Amphitheatre.
In the early 1990s, the City began to experience rapid population growth, particularly in
new master planned communities east of Interstate 805. The 1990s also saw increased
growth in employment, with the services sector increasing by 4% annually and other
industry sectors experiencing annual growth rates ranging between 3% and 5%.
By the end of 2007, the City began to feel the effects of the downturn in the nation’s
economy. Over the last five years the City has endured significant fiscal stress caused
not only by the housing / foreclosure crisis, but also the closure of the South Bay Power
Plant, reductions in revenues from Utility Users Tax and local sales tax, and the transfer
of local funds to address State budget shortfalls. In 2011 the City was one of the first in
the state to tackle pension reform and began implementing Continuous Improvement
Program and adopted a Fiscal Recovery and Progress Plan to address the challenges
facing the City in achieving financial sustainability.
Even with these challenges, the City continues to provide vision and leadership to
pursue several significant economic development initiatives designed to create new
mixed-use districts, investment and jobs in both newer East Side and older West Side
communities including:
"A unique location in the
mega-region to position for the bi-national opportunities that are growing cross-border."
Chula Vista Competitive Location Assessment August 2013
Page 2
Chula Vista Bayfront Master Plan – Recently approved plans for
development of 556 acres of underutilized industrial land on the City’s
bayfront into resort hotels, convention center, commercial, industrial and
parks and open space.
Millenia – Plans for high-density mixed-use development featuring
residential, commercial, and civic uses on 210 acres south of Otay Ranch
Town Center.
University Park and Innovation District (UPID) – Proposed for higher
education and research facilities and a regional technology park, on 375
acres in the Otay Ranch area (southeast of the Millenia project). Additionally,
a larger mixed-use development known as University Village (Village 9) is
planned as a gateway to the UPID. University Village is programmed for
approximately 1.5 million square feet (SF) of mixed-use development and
4,000 residential units.
These significant projects will be drivers of the City’s future economy, along with other
assets and opportunities for the City.
Project Objective
To support the City’s vision and efforts in the attraction and expansion of key business
sectors to create quality jobs, new investment and economic prosperity, the City has
initiated a study that will provide the following outcomes:
1. Identify existing businesses with growth opportunities,
2. Understand the dynamics of the existing business clusters within the region and
their effect on Chula Vista’s opportunity for economic growth,
3. Identify the ‘best fit’ target sectors for business attraction,
4. Leverage the existing assets (development, knowledge, policies) to compete
globally by attracting and expanding business in key sectors that will provide an
positive economic impact,
5. Ensure Chula Vista’s products, programs and policies are competitive in the
market place and create a value proposition to attract new investment, and
6. Provide a strategic roadmap of next steps to launch a results-oriented recruitment
program.
A project team of Chabin Concepts, Keyser Marston Associates, Applied Economics,
Austin Consulting, and ROI Vision is conducting the Chula Vista Business Cluster
Analysis.
Chula Vista Competitive Location Assessment August 2013
Page 3
The Competitive Location Assessment identifies:
Strengths and assets that will support the Target Industry Clusters (Phase II),
and
Weaknesses that could constrain successful recruitment of these targets and
recommended priority actions for addressing weaknesses.
Chula Vista Competitive Location Assessment August 2013
Page 4
1.0 Competitive Location Assessment
Phase I is a qualitative evaluation, a process of aligning the local business climate to
identify compatible industries that will most likely prosper with Chula Vista’s assets. The
evaluation focused on business factors associated with location decisions by corporate
executives, real estate portfolio and the business climate perception of local
stakeholders.
In addition to the business clusters (types of business), in a business recruitment
strategy, there are distinct “audience groups” the City will target for marketing,
communication and prospecting – directly to business executives and / or those who
influence the business executives. Each may approach their own evaluation differently.
This assessment addressed these different audiences to determine strengths and
weaknesses of a Chula Vista business location:
Land Supply & Building Inventory, Audience: Non-residential Developers,
Property Owners and Brokers.
Review of current market trends for the City’s industrial markets, including: (1) available
land supply, location, zoning, and values, and (2) building inventory, condition,
location, and rents / values. These factors were then compared with countywide
market conditions. Informal surveys of non-residential developers / property
owners and brokers regarding the principal assets and constraints in marketing
the City to major employers were also conducted.
Corporate Location Exercise, Audience: Site Location Consultant and Corporate
Real Estate Executive
A simulated Site Selector-driven exercise, Project Galaxy, was conducted to see how
the City responded to a business specific RFI from a consultant. The project
simulated a high-end medical device manufacturer, seeking 6-10 acres, 80,000 sq
ft and 50 employees. The City responded to the RFI, with site selector requested
information, and conducted a site / building and community tour and also
organized meetings with brokers and some employers.
Business Climate Interviews, Audience: Local Businesses and Partner
Organizations
Interviews and surveys with local businesses and organizations that serve Chula Vista
ranking the business climate from their perspective.
Chula Vista Competitive Location Assessment August 2013
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2.0 Findings
Throughout the Corporation Location Assessment phase, the Project Team analyzed
Chula Vista through the eyes of a Corporate Real Estate Executive who makes multi-
million dollar decisions on new long-term investments for the company’s growth or
market position plans.
A Corporate Real Estate Executive / Site Selector seek the optimal location that
minimizes risk, one-time costs, and long term operational costs. The process most often
used by a Corporate Real Estate Executive / Site Selector is a process of elimination.
Figure 2, Location Decision Factors, is the basis for a community investigation – all the
factors that may be evaluated in the decision process which are evaluated against
competing cities and sites.
Developers and real estate brokers may not conduct the same level of in-depth internal
evaluation of a location as a Corporate Real Estate Executive / Site Selector, but the
same information and community readiness is just as important to their success in
working with a client.
Chula Vista has built a vision and pathways to opportunities in attracting new
investment. Now the goal is to remove or mitigate any reason for a company to
eliminate Chula Vista from the search process.
Month Day Year
Figure 1 – Location Decision Factors
Chula Vista Competitive Location Assessment August 2013
Page 6
The objective of the Competitive Location Assessment Report is to document the Chula
Vista’s assets and limitations for basic industry development and the growth of quality
jobs. This report summarizes the competitiveness of key factors that impact site location
decisions.
The evaluation is a combination of the Project Galaxy project investigation conducted by
Frank Spano, Managing Director of Austin Consulting, and a division of The Austin
Company; real estate market analysis conducted by Paul Marra, Keyser Marston
Associates, Inc. and stakeholder interviews and research conducted by Audrey Taylor,
Chabin Concepts.
Site consultants, Austin Consulting, typically evaluate communities on the highest
standards for their clients and demand the most from economic development
organizations and local governments because of their vast experience with so many
communities.
The basis for evaluating Chula Vista was similar to a typical client project for a site
consultant. Information was reviewed on local websites, a sample proposal was
provided to the site consultant from the City and a list of requested meetings and things
to see on a tour was sent prior to the visit.
Site location consultants are trained to make quick assessments of communities
because of their clients’ timelines. Many of the assessment observations in this report
are based on lack of information provided during the assessment process, compared to
more competitive communities that have the requested information available and
organized to address site consultant and company requests in a short timeframe.
For the Chula Vista project there was additional research done by Keyser Marston
Associates and Chabin Concepts to collect additional information and business climate
perceptions to complete the assessment and provide recommendations for business
clusters and actions.
Chula Vista Competitive Location Assessment August 2013
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2.1 Corporate Location Exercise Evaluation Sheet
Following is the Corporate Location Exercise findings.
The left column explains the location decision factors and what a Corporate Real Estate
Executive / Site Selector is seeking in a location.
Each factor is ranked as:
Strength (competitive advantage),
Neutral (as compared to other area), or
Weakness (area for improvement, if under the control of the City).
The right column provides notes of findings based on the on-site investigation,
information made available by the City and secondary sources. The Project Team
believes all sources to be reliable. However, we cannot guarantee their accuracy.
Corporate Location Decision
Factor
Ranking
Strength-Neutral -
Weakness
Findings
Based on the Corporate Location Exercise conducted by Austin Consulting, an
international site location firm, the overall ranking for Chula Vista was Neutral.
Chula Vista would have been eliminated from the search process for this project.
Several factors attribute to that decision, but mainly:
Lack of “shovel-ready”1 land and portfolio of ready to-go-building quality
buildings;
Incompatible use in industrial-zoned areas, exhibits a lack of protection /
preservation of land uses (such as, City allowing non-compatible uses in
Eastlake, a designated business park);
Potentially high connection and impact fees compared to the region2;
Length of time to permit is a red flag3;
1 Definition of “shovel-ready” generally refers to commercial/industrial sites that have had all of the planning, zoning, surveys, title work,
environmental studies, soils analysis, and public infrastructure engineering completed prior to putting the site up for sale. Often referred to
as “pad-ready” and is location ready within six to eight months. Many communities across the US have third parties “certify” sites as
“shovel-ready” or “certified-ready”.
2 Connection and Impact Fees were reviewed and calculated for the case study, Project Galaxy. From site consultant perspective and experience the fees were relatively high for this type of operation as compared to other areas. There was not a comparative analysis done to other communities in the region. However, a BIA report indicated that fees were high. Given the site selector analysis and knowledge it would be reported to the company as high compared to other locations attracting this type of industry.
Chula Vista Competitive Location Assessment August 2013
Page 8
Dispersal of industrial uses throughout various areas of the City without clear
district identities or consistent public improvements, appears fragmented and
disjointed without a clear understanding of the whole;
Also lack of information as well as quick delivery of information left evaluation
as a “short-list” contender open to question.
3 Permit timing was part of the Project Galaxy review. Based on discussions with staff on permits required, Project Galaxy although an industrial use, was not a permitted use and would take considerably longer than experience in other areas for a similar type of project. It was presented that projects such as Project Galaxy could be “fast-tracked” however there were no documents or case studies showing how that would occur. The Red Flag ranking is given to advise the community that this would be questionable in the minds of a Corporate Real Estate Executive if not fully documented to show the permit timeline.
Chula Vista Competitive Location Assessment August 2013
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Corporate Location Decision
Factor Findings
Location
Market Access
Is the community located to support logistics
to extensive markets?
Proximity to suppliers and markets
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Chula Vista is part of the larger mega-region of San Diego and
Tijuana, Mexico.
Uniquely situated to the Mexico border to take advantage of their
manufacturing growth and provide those business executives
options for HQ, Sales, Administrative, and R&D locations as well as
housing.
With changes in China, near-shoring / re-shoring of businesses will
benefit Tijuana (who is preparing and actively pursuing these
opportunities).
Excellent proximity to suppliers (San Diego & Mexico) and markets.
Interstate access allows the region to competitively serve a national
distribution network.
Real Estate
Available Development Sites
Does the community have available buildings
or sites that are “ready to go” / “shovel-ready”
for industrial?
Ready-to-go sites ranging from 1 to 100
acres in settings suitable for office, light
industrial, and heavy industrial.
Ready-to-go/shovel ready refers to
commercial/industrial sites that have had
all of the planning, zoning, surveys, title
work, environmental studies, soils
analysis and public infrastructure
engineering completed prior to putting
the site up for sale and location ready in
six-eight months.
Served with all utilities, good highway
access, proper zoning, compatible
neighboring land uses
Controls in place that will stop undesired
development
Located near labor force and worker
amenities
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Available land exists, but none demonstrate “readiness” (ready-to-
go or shovel-ready, as noted in Available Development Site
description) for any industry.
Eastlake – Was a quality location for small industrial / assembly
type operations until non-conforming uses located within the vacant
space. This was one of the few (only) locations where a company
could construct a building on a Greenfield site. BUT, due to non-
conforming uses throughout the park this location would be
downgraded by most consultant / companies as a viable location for
a light industrial operation.
Industrial Blvd. area –Includes the L Street building. Area does
contain some newer multi-tenant spec warehouse space for smaller
users but has a mix of older smaller buildings. Area does not show
well and has considerable housing / rental units throughout which
could be a deterrent to a location. Excellent proximity to I-5.
Main Street (West of I-805) – A mixed use area containing older
industrial operations. Residential along either side of Main Street.
Becomes more congested the further east along Main Street.
Appeared to be some Brownfield Sites on the south site of Main
Street.
Auto Parkway Area – Major cost considerations to move / relocate
salvage and junk yards and complete a thorough environmental /
remediation process to clean up the sites for redevelopment. Area
has good proximity to I-805. Some small industrial parcels in area.
54 Acres site adjacent to the Otay Landfill – Site is an open site and
owned by the City. The City would need to do a full feasibility
analysis of the site, determine site configuration, site plan showing
site dimensions, roadway that would provide access to the site,
building and parking feasibility and a full Phase 1 Environmental
would be necessary; Challenges include extending all utilities and a
good quality access road to the site. The site would be downgraded
based on location next to the landfill. High marks for the nice view
of the area.
Chula Vista Competitive Location Assessment August 2013
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Corporate Location Decision
Factor Findings
Real Estate (continued)
We
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UPID (University Park & Innovation District) close to SR 125
(approximately 4 miles from 805) – Could be a very attractive
development for office / research and development / and light
industrial / mfg. / assembly uses. This development is tied with the
creation of a four year college / university locating within the
development. The planned development, 375 acres, is large
enough to parcel some lands now to start locating businesses that
would build synergy with an Education, Technology Park. Bringing
some businesses may also help in attracting the educational
institutions. This development has the highest potential for
attraction of technology and cleantech businesses.
Central Bay Front Master Plan – Referred to as “Industrial Business
Park”, 2 parcels at the southern section of the development. Sites
are located on Bay Blvd. These parcels may be the best for long
term light industrial development once all environmental clean-up
and remediation is completed from the former electric power plan /
substation. Biggest concern here is the planned RV Park to be
located in between each industrial business park – not a compatible
use for this industrial park setting or a Maritime Industrial if
designated by the Coastal Plan.
Available Buildings
Industrial buildings ready to go; clear
ceiling heights of 20 feet or more, truck
docks, drive-in doors, land for expansion
Diverse office building (Class A, B, and
C) with adequate parking to
accommodate use (i.e. higher ratio
parking for back office)
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Limited industrial buildings available and virtually none “ready to
go”.
The L Street School District Site/Bldg. in the Industrial Blvd area is
not a good property for most potential industrial clients but could be
a good incubator space for start-ups as long as lease cost is
favorable.
Difficulty in competing for industrial employment uses with huge
inventory / development potential and low values / rental rates in
Otay Mesa. Otay Mesa also offers more permissive industrial
zoning, state-of-the-art flex buildings, no conflicts with residential
uses, room for expansion, and excellent access via I-5 / SR 905 (no
toll road).
Significant industrial and flex building space 8.7 million SF with 10%
vacancy for industrial and 8% for flex space.
Available spaces for the most part are smaller spaces under 10,000
SF.
Majority of the industrial building inventory is Class C buildings.
Office building / space sufficient.
Smaller space at Eastlake buildings perfect for tech incubator
space. Accelerator space for international tech companies.
Chula Vista Competitive Location Assessment August 2013
Page 11
Corporate Location Decision
Factor Findings
Utilities
Are all utility services in place at the sites and
able to support new operations?
Electric
Competitive rates and fees
Capacity
Quality of service and reliability
Service provider reputation
Diversified energy portfolio
Conservation and efficiency programs Ne
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Note: the evaluation of utilities is usually in direct relation to the utilities
at a site. Given the lack of “ready-to-go” sites the utilities are ranked
“neutral” in the context of competitiveness within the region. However
there are also red flags in the lack of delivery of information in an
expedited manner.
San Diego Gas & Electric, SDG&E, is a reputable electric power
service provider.
SDG&E rates and fees are higher relative to competing areas in
southwest states and Mexico.
SDG&E is known for sustainability, energy efficiency services, and
renewable energy.
Lack of maps showing utility lines and nearest electric power
substations (this would be site specific).
Lack of information on capacity and reserve capacity to the site.
Lack of response from utility to information provided to the City for
monthly costs based on usage, one-time utility connection, and
impact fees.
Natural Gas
Competitive rates and fees
Capacity
Quality of service and reliability
Service provider reputation
Same as above
Water
Competitive rates and fees
System capacity
Service provider reputation
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Served by two water Districts, Otay Water District, and Sweetwater
Authority.
Water is reportedly available to meet new demand requirements.
Water rates and one-time connection fees were provided in an easy
to understand manner based on the usage provided for Project
Galaxy, however, the information was not expedited in a timely
manner (2 months).
Waste Water
Competitive rates and fees
System capacity and age
Appearance of waste water facility
Service provider reputation
Operated by City.
Information needs to be provided for each site, preferably a map,
with location, main and pipe sizes, system capacity, pretreatment
requirements, and sustainability efforts.
Telecommunications
Competitive rates and fees
Capacity
Quality of service and reliability
Service provider reputation
AT&T noted as provider. Initial interview was held with ATT on the
project requirements and information needed, however, information
was never provided so this could not be evaluated.
Businesses interviewed did not have any difficulty with
telecommunications and internet (T1 lines suffice for target
industries).
One business, a Data Center, noted that more fiber was needed to
handle any Data Center which is a very heavy user of the internet.
In planning for the new development, fiber installation should be
high priority.
Chula Vista Competitive Location Assessment August 2013
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Corporate Location Decision
Factor Findings
Transportation
Is the Community accessible for business
shipments and workers’ commutes?
Access to Highways
Highway and arterial road network
supporting efficient movement of people
and goods
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Highway and arterial road for the most part support efficient
movement of people and goods in the region.
Interstates 5, 805 and SR 125 (Toll Road).
SR 54 along the area’s northern boundary acts as a major east-
west roadway. SR 905 could be an east/west alternative.
The area has numerous 6-lanes east-west connector roadways.
Congested areas with cross town traffic.
Completion of Main Street / Rock Mountain / Hunte Parkway from I-
805 to SR 125 is an essential link for accessibility in the southern
portion of Otay Ranch.
Air Service
Well-planned and managed airport
supporting the efficient movement of
people and goods
Distance to international airport St
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Chula Vista is well positioned between two International Airports.
The San Diego International Airport is located less than 11.5 miles
from City Hall north along I-5.
The Tijuana International Airport is located via SR 125
approximately same distance to the south.
There is also Brown Field two miles south in Otay for corporate jet
facilities and air cargo.
Rail
Well-planned and managed rail system
that supports the efficient movement
goods
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Existing rail is limited to the western portion of the City with sporadic
service.
Rail usage is not a major transportation criterion for the target
industries identified.
Large manufacturers (existing) could see rail as an advantage but
this would be a case by case basis.
Rail may be important for businesses located in Tijuana and could
be a discussion point on how Tijuana and Chula Vista benefit from
cross-border industry growth.
Workforce
Does the community have a labor pool in
place that is trained, cost effective and
available?
Labor
An available workforce that includes both
skilled and unskilled workers
Ability to attract talent to move to the
Chula Vista area
Available sources of new labor entrants
(i.e. universities)
Reasonable wage rates and fringe
benefits relative to competing cities
Work ethic
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55% of the population is of workforce age (18-65).
High commute out of Chula Vista to businesses in the north.
Indications those out-commuters have tech skills and would prefer
to work locally if jobs available.
Workers commute from Tijuana.
Lower wage rates and fringe benefits relative to area.
High percentage of workers in production occupations.
Available skilled workers in trades and production occupations
according to Workforce Development Agency, Personnel Agencies
and interviews with local businesses.
High percentage of employment in Advanced Precision Mfg.,
Aerospace, Navigation, and Maritime Technology.
Stakeholders ranked on a scale of 1 to 10, with 10 being the
highest:
Available Skilled Labor 6.7
Available Unskilled Labor 9.7
Labor Quality 7.6
Recruitability 6.8
Chula Vista Competitive Location Assessment August 2013
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Corporate Location Decision
Factor Findings
Labor (continued)
Interviews with personnel agency and business indicate labor is of
high quality and dedicated.
Language skills (30%+ mono-lingual).
Weakness is any good documentation of the labor.
Workforce Services
Workforce recruitment programs that
assist companies in identifying and
attracting workers
Training programs in place to assist
existing employers and new companies
in developing workers to meet business
challenges
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South County Career Center, part of the San Diego Workforce
Partnership, serves the Chula Vista area.
Main role is networking with businesses as a means to market
Workforce Services; help businesses with recruitments.
Business Services include:
Job Postings
Recruitment & Job Fairs
Rapid Response
Training, On-the-Job Training and Tax Credits
Over 50% of their job seeker clients live within 5 miles. Prefer to
work south of Hwy 8.
West of 805 unemployment is higher 8-9%.
Job to Opening Ratio for UTC Aerospace hiring of veterans, 2:1, 55
applicants screened, qualify for testing.
Popular training programs:
truck driving school
green building skills (fills up fast) at Southwest College
PIMA – medical vocational skill
Skill Training Resources
K-12 education system – regional
occupational training and college prep
Community Colleges – certification
programs, linkages to businesses,
specialized training
Universities – specialty programs,
industry-related programs, linkages to
business community, research
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K-12 has numerous awards for excellence and academic
achievement.
Southwestern College (SWC) has a 156-acre campus, offering AA
degrees, preparation for transfer to four-year College and
occupational skills training.
SWC just completed a Master Plan.
Project critical shortfall in STEMM skills.
Career and Technical Education core – fire science, EMT /
Paramedic, registered nursing, child development.
Other programs include: Exercise Science, Automotive, Renewable,
and convergent of info tech and allied health.
Career Technical Education (CTE) very active in Allied Health,
Surgical Tech, Fire Science, Police & Administration of Justice and
126 certificates.
CTE Dean Priorities
Primary: Health, Life Sciences / Biotech, Advanced
Transportation & Renewables
Emergent Sectors: Advanced Manufacturing, Info /
Communications Technologies and Digital Media
Interest in aligning with business needs and working with the City to
align training to career clusters.
Plans for a 4-year University.
Top Universities, i.e., UC San Diego, San Diego State, located in
close proximity.
Chula Vista Competitive Location Assessment August 2013
Page 14
Corporate Location Decision
Factor Findings
Business Climate
Does the community support new
development now and is the community
planning for the future?
Community Leadership
Clear direction of where the community
is headed
Consistent support for business and
economic development
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Clear vision of where the City is headed demonstrated with planned
developments – Bayfront Master Plan, University Park, and
Research Center, Millenia – and follow-thru on moving those
projects forward.
Earned a reputation in San Diego as leader in sustainability.
Sustainability and quality demonstrated in the planning particularly
on East side.
Revitalization occurring on West side.
Support of programs for businesses, such as, Enterprise Zone.
Support and commitment for Economic Development, although due
to financial constraints, Economic Development is below capacity to
carry out aggressive programs and not at the table for some
regional and bi-national initiatives.
Stakeholders ranked Business Climate 9 out of 10.
Business Retention Program
Active outreach with local basic industry
employers to connect them to economic
development resources
Strong relationship between local
employers and economic development
staff – employers know who to call for
help
Trusting dialogue between economic
development and local employers about
challenges
Ne
u
t
r
a
l
Environmental Services, CLEAN team, does outreach to business
providing energy efficiency, water, and waste assessments;
assistance with improvements. Businesses are on a 4-year call
schedule.
The Economic Development Team does not have a formal retention
outreach program (or time to implement a formal program). The
Team is very responsive to all business inquiries and needs.
Several of the companies interviewed complimented the ED Team
on their “business first” attitude. The department is small with
several programs, initiatives, and responsibilities. Moving forward
with a marketing and business recruitment initiative will require
additional resources for the ED Team to be effective and not spread
thin.
Focus on major employers and those businesses affected by
corporate change, i.e., United Technologies.
Economic Development Team reaches out to as many businesses
as possible through the Enterprise Zone program assisting
businesses to access the Zone benefits.
Outreach occurs also through the “Buy Local” Program with retail
sector.
South County EDC also actively works on engaging local employers
through one-on-one calls and meetings, as well as through industry
sector research.
Stakeholders ranked business retention 6.8 out of 10.
Businesses feel they have access to top management at the City
and know the Economic Development staff (this appears to be a
change from past).
Business & Trade Associations
Opportunities for managers of basic
industries to share common issues
Connection to economic development as
a means to provide service and develop
relationships with local employers St
r
e
n
g
t
h
Numerous business and trade organizations in the region that
Economic Development staff network with to connect with local
businesses.
Businesses have a variety of opportunities.
Chula Vista Competitive Location Assessment August 2013
Page 15
Corporate Location Decision
Factor Findings
Development / Permitting Process
Defined process clearly communicated
so that client understands what is
expected at the beginning of the process
Fast-tracking services
Due diligence completed on available
sites (e.g. environmental studies, site
survey, etc.)
Documented fees, estimate for
development and operational costs
Ne
u
t
r
a
l
This factor got mixed reviews.
The City has expedited permitting in place and will pull together a
team to review project, assign a Project Manager to oversee and
shepherd the project through the process.
Permitting flowcharts are available on City website.
Stakeholders ranked expedited permitting 4.8 out of 10 with some
recognition that recently streamlined regulations have been put in
place.
Reported frustration with the CUP process required in Eastlake has
added extensive time to development, this appears to be due to the
CUP process for non-conforming uses in a business park, such as
daycare, karate, etc which should not be located in a business park.
Difficulty in getting a handle on fees, but information received
appears impact fees were high (supported by BIA Report).
Comments included “projects take longer and cost more than other
areas”.
New planned development sites are not “shovel-ready” so due
diligence reports are not available.
As noted this factor got mixed review, this could be “hang-over”
perception from past experience but a concern for new business
recruitment.
Sustainable Practices
How “green” is the community?
Sustainability
Local Sustainability Action Plan
Local energy conservation and efficiency
programs
Local recycling and reuse programs
Green building standards
Fast track development for new /
upgrade LEED and Energy Star
Buildings
Community / residents embrace “green”
culture
St
r
e
n
g
t
h
High accolades and many awards in this category.
Known throughout the county as a leader in energy conservation,
water conservation, pollution prevention, and solid waste reduction.
CLEAN Business Program, assistance and recognition to
businesses.
Member of ICLEI.
Environmental Services promotes sustainable practices throughout
the community through CLEAN team.
Climate Action Plan since 2000.
SDG&E promotes local energy conservation and promotes
efficiency programs.
Green Business Challenge
Green-centric drives opportunity for more green employers.
Risk Management
Does the community recognize, plan for, and
mitigate hazards and other risks?
Natural Disasters
Earthquakes
Volcanoes
Tornadoes
Floods
Hurricanes
Tidal Waves
Forest Fires
Ice / Snow
St
r
e
n
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t
h
Limited risk of natural disaster in the region.
Chula Vista Competitive Location Assessment August 2013
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Corporate Location Decision
Factor Findings
Business Costs
Does the community have an advantage for
ongoing operational costs?
Operating Costs
Typical operational costs (utilities, labor)
competitive with state averages and
southwest competitors
Ne
u
t
r
a
l
Business operating costs for labor wages are lower than any other
areas of the region, but higher than other southwestern states.
Utilities are relatively in line with region but higher than other
competing areas in the southwest.
Sewer and water fees appear to be based on residential
development versus industrial / office development, which causes
the cost to be higher (i.e. Measured by EDU). In the review of
Project Galaxy costs Austin noted that sewer and water fees for
industrial use the same basis as residential (EDUs), however, in
most other “competitor” locations (maybe not regionally) sewer and
water rates are not calculated by EDU.
One Time Costs
Prefer Waived
Based on review of Project Galaxy, one-time costs, impact fees
were high compared to other areas in the region and much higher
than southwest. This is supported by a report completed by BIA
2007-08 but appears to still be relevant. Note: a 2012-13 Report
was said to be completed however Team, nor the city, received a
copy.
Taxes
Business taxes as they relate to
operational costs
Personal taxes as they relate for
attracting talent
California State corporate and personal taxes are high compared to
surrounding competitor states.
Chula Vista had a California Enterprise Zone designation as an
major incentive program whereby businesses can reduce their state
tax liability through tax credits on sales / use tax on equipment and
qualified employees. This incentive changed with the passage of
AB 93 & SB90 and is no longer available to businesses in its
original form, however, businesses could still utilize the new sales
tax exemption on manufacturing equipment and hiring tax credits
(though the rules have changes on eligibility).
Incentives
Incentives
Does the community package local, state,
federal incentives to effectively close deals?
Incentive policy in place and clearly
communicated
Documentation of statutory incentive
programs and understanding of how they
apply to specific client projects
Due diligence procedures to vet
worthiness of incentive package (impact
model, review company financials)
St
r
e
n
g
t
h
Workforce Development programs are standard across the nation
but some WIB’s better utilize the tool as an incentive to expanding
and new businesses to assist in training costs and up front start-up
cost through On-the-Job contracts.
California has Employment Training Funds which can be used for
upgrade training, expansion and new location employee training – a
valuable tool.
Chula Vista is a California Enterprise Zone which provides tax
credits for equipment sales / use tax and eligible employee hiring
for the life of the Zone. Chula Vista just completed expanding the
boundaries of the Enterprise Zone allowing more business to take
advantage of the program. Note: The Governor and State are
looking at reforming the Enterprise Zone program which may take
away some of the tax credit incentives. This will likely be decided
over the next year by 2014.
Chula Vista Competitive Location Assessment August 2013
Page 17
Corporate Location Decision
Factor Findings
Incentives (continued)
A Local Business and Jobs Investment Policy has been drafted
which would offer local incentives to small businesses through Buy
Local Incentives and Online Vendor Registration; for new and
expanding businesses, eligible under certain parameters, incentive
for percentage of cost of fees. Note: this is a draft and not adopted
but should be considered to boost Chula Vista’s competitiveness
particularly in reducing upfront costs of location/expansion.
Although not an incentive to specific businesses, the City has
absorbed costs and assisted with moving the planned projects,
such as, Bayfront and UPID, forward; without that assistance and
investment from the City, the project would not be where it is today.
This is a strength relative to the region but not the southwest
competing areas.
Quality of Life
Does the community appearance reflect pride
and unity within the community?
K-12 Education System
Quality
Well-funded
St
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t
h
85 public and private schools (Source: Sperling’s Best Places).
Many awards of excellence.
Recently reported controversy of property owned by Sweetwater
School District.
High school graduation rates higher than state average.
Average student teacher ratio 24:1, San Diego 16:1 (Source: CA
Dept Education, Current Cost of Education, 2011-12, Jan 2013).
Expenses per pupil ($8,585) lower than area, San Diego ($9,448)
(Source: CA Dept Education, Current Cost of Education, 2011-12,
Jan 2013).
Amenities
Well-funded cultural institutions with
active programs
Mix of high-end and discount shopping
choices
Wide range of quality recreation
opportunities St
r
e
n
g
t
h
Chula Vista has older “west” side and the newer “east” side.
Historic downtown, two major malls, and shopping districts.
Climate, outdoors, trails, coastline, mountains, biking, kayaking,
golf.
Sweetwater Marsh National Wildlife Refuge, Living Coast Discovery
Center, Cricket Amphitheatre, SeaWorld Aquatica and one of three
in the national Olympic Training Centers.
Transit Trolley to Mexico.
Quality health facilities including Sharp and Scripps.
Housing
Availability of diverse housing stock,
including management-level housing,
multifamily and corporate interim housing
Affordable housing for all levels of
workers St
r
e
n
g
t
h
Local real estate market is diverse, for many different socio-
economic levels.
Region has history of active developer market for residential.
Housing is more affordable than other areas in the region.
West side has older housing stock and east is newer.
South Bay Community Services is supporting a Chula Vista
Promise Neighborhood program.
Security and Safety
Crime rate
St
r
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n
g
t
h
Violent crime rate (271.8 per 100,000 in population) is below county
average (378.5).
Property crime rate is (2100.7 per 100,000 in population) is below
county average (2206.4). (Source: FBI Uniform Crime Report)
Chula Vista Competitive Location Assessment August 2013
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2.2 Existing & Planned Real Estate Portfolio
Second only to Market Access and Transportation Cost on the site location decision
scale, Figure 2, real estate properties, land and building, are the most critical factor to a
location decision. Corporate Real Estate Executives / Site Selectors want “shovel-
ready”4 sites, ones that can be preferably permitted within six months or less. The Real
Estate Factor on the Competitive Evaluation Sheet ranked this a current weakness (lack
of “shovel-ready”) and a future strength:
2.2.1 Existing Industrial Property Concentrations
The City has approximately 8.7 million SF of industrial and flex building space.
Approximately 7.5 million SF, or 86% of the total, is concentrated on the West Side
(Source: Colliers International). This inventory is concentrated in two principal areas:
Bay Boulevard / Industrial Boulevard – This area includes the Bay
Boulevard and Industrial Boulevard corridors extending generally from E
Street on the north to the southern City limit. It straddles both sides of
Interstate 5, as well as two railroad rights-of-way. It also includes a portion of
L Street between Industrial Boulevard and Broadway. This area is generally
characterized by incomplete or inconsistent public improvements, older
industrial buildings, and constrained sites with limited parking. The area
accommodates a broad range of uses / businesses, including manufacturing,
warehousing, and self-storage. The largest single industrial user in this area
is United Technologies (Goodrich Aerostructures Group), located in the
central Bayfront area. The Bay Boulevard / Industrial Boulevard industrial
area enjoys excellent freeway and trolley access.
Main Street – This area encompasses the Main Street corridor from
Interstate 5 to Hilltop Drive. Industrial uses in the Main Street corridor include
manufacturing, warehousing, self-storage, and auto supply. Sudberry
Properties, Inc. is proposing a 30-acre industrial development on Main Street
between Broadway and 4th Avenue. Main Street also includes a range of land
uses including residential, commercial, and agriculture uses.
Similarly, there are two principal concentrations of existing industrial buildings on the
East Side:
4 Definition of “shovel-ready” generally refers to commercial/industrial sites that have had all of the planning, zoning, surveys, title work, environmental studies, soils analysis, and public infrastructure engineering completed prior to putting the site up for sale. Often referred to as “pad-ready” and is location ready within six to eight months. Many communities across the US have third parties “certify” sites as “shovel-ready” or “certified-ready”.
Chula Vista Competitive Location Assessment August 2013
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Auto Parkway – Auto Parkway (Main Street east of Interstate 805) is home
to automobile dealerships, major retail anchors, and several distinct industrial
parks, each with its own gateway signage. This industrial area includes a
variety of uses such as manufacturing, warehouse, and self-storage. Directly
adjoining this area are several auto junk yards, and the County landfill. The
Auto Parkway industrial area has limited visibility and access relative to the
Bay Boulevard / Industrial Boulevard and Main Street areas on the West Side.
Primary access to Auto Parkway is from I-805; the street is ultimately
proposed to link up with Hunte Parkway on the East Side.
Eastlake Business Center – Eastlake Business Center is the City’s newest
industrial zone. It is located east of State Route 125 and north of Otay Lakes
Road on the far East Side of the City. It is surrounded by shopping centers
and residential neighborhoods. Eastlake Business Center includes major
users such as UPS, DNP, and Leviton. It is also home to The Design Center
at Eastlake. Over the years, numerous non-industrial uses, such as
restaurants, dance studios, and recreational facilities have been granted
Conditional Use Permits (CUPs) to locate in the Center. Currently, there
remain a number of vacant pads for sale and sizeable building areas
available for lease. Eastlake Business Center has struggled due to its remote
location, limited accessibility, and constraints imposed by the prevalence of
CUPs and surrounding residential uses. On the other hand, it offers the most
amentitized environment for employees of any existing industrial location in
Chula Vista.
2.2.2 Overview of Planned Industrial Concentrations
Bayfront Master Plan – The recently approved master plan includes a total
of 47 acres of industrially designated land (1 acre in Harbor District, 46 acres
in Otay District). New industrial uses in the Bayfront Master Plan will
complement the existing Bay Boulevard / Industrial Boulevard industrial area.
New commercial and recreational uses planned for the Bayfront will provide a
major amenity for nearby industrial employers.
Landfill Buffer (Heritage Road) – City plans for the land around the County
landfill call for a buffer of industrial uses. This includes approximately 171
acres programmed for industrial use within the Sunbow (35 acres), Village 2
and 2W (96.1 acres), and Village 3 (39.7 acres) planning areas that form the
north, east, and southeast periphery of the County landfill. Additionally, the
City owns an approximately 54-acre site directly west of the County landfill in
the unincorporated area. The City is evaluating the possibility of annexing this
Chula Vista Competitive Location Assessment August 2013
Page 20
site into the City for industrial development. Taken together, the existing Auto
Parkway industrial area, proposed industrial uses in the Landfill Buffer (west
of Heritage Road), and potential industrial development on the City’s 54-acre
site west of the landfill have the potential to form a substantial concentration
of industrial uses with good 4 lane access approximately one mile from the 1-
805 freeway and an eventual second route to on east Main to CA-125.
University Park and Innovation District – The UPID is planned to include
an 85-acre technology park. As noted elsewhere, it is planned in conjunction
with a university campus, surrounding mixed-use developments, and a
proposed Bus Rapid Transit (BRT) line. Although this area will not be
contiguous with other industrial areas in the City, it will ultimately be linked
with the existing Auto Parkway and proposed Heritage Road industrial uses
via Rock Mountain Parkway / Hunte Parkway and adjacent to the 1 million SF
of office commercial in adjacent Millenia.
As noted Chula Vista contains multiple distinct market segments which do not fit well
under a single, citywide marketing and recruitment effort. Each of the existing
employment concentrations within the City faces a variety of challenges and
opportunities.
As a “go-forward” action and particularly for marketing, should segment the real estate
into “districts” which will help to distinguish each area and the industries that are a best
fit for those areas.
Chula Vista Competitive Location Assessment August 2013
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Over time each district should have image / identity, accessibility, critical mass (and
focus on specific industry sectors), compatible land uses, supporting amenities,
available sites / buildings that are comparative and competitive to other regional
locations, such as, Poway Business Park, Sorrento Valley, Carlsbad, Kearny Mesa, et
al. There are smaller infill parcels to these main areas, i.e., along 54.
Chula Vista Competitive Location Assessment August 2013
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2.3 Assets
As indicated in the Competitive
Assessment Evaluation, Chula
Vista has key assets that directly
relate to the location decision
factors.
Properties
Availability of affordable /
comparable land and
buildings relative to other
areas of the County.
Extensive undeveloped land
in eastern Chula Vista,
south of Olympic Parkway. The Millenia, UPID, and University Village
developments, and the surrounding master plan proposals, represent an
opportunity to develop mixed-use, “new town” communities comprising both
employment and residential uses.
Potential for significant new catalysts for employment recruitment with
development of the Bayfront Master Plan and the proposed university.
Olympic Training Center is an underutilized asset, it could be a catalyst to
draw sports innovation manufacturers or other wellness entities to increase
visitors.
Workforce
Employer perceptions of a quality labor force in Chula Vista / South County.
Access to labor force from Tijuana.
Semi and skilled workforce, dedicated and low turn-over.
Lower wage workers with manufacturing experience.
Significant commuting workforce, which may have technical skills, and be
interested in working closer to home.
Southwestern College and Career Technical Education (CTE).
Location
Chula Vista location is one of its strongest assets.
Chula Vista Competitive Location Assessment August 2013
Page 23
Proximity to Tijuana – their cluster development and growth in the advanced
manufacturing field – Aerospace, Automotive, Medical, and Electronics.
Existing cross-border locations of Chula Vista companies.
Tijuana’s positioning and aggressive recruitment for near-shoring in key
cluster segments.
Ability for Chula Vista to offer Headquarters, R&D, Sales and Administration
locations to companies with manufacturing in Tijuana.
Mexico proximity benefits other goods and services businesses / markets
serving the population.
Transportation
Extensive freeway / toll road access, including Interstates 5 and 805 and
State Routes 54, 125 and 905. Much of the City’s older industrial uses are
concentrated in the Interstate 5 corridor, which provides a key link between
the border and Downtown San Diego.
Existing Cluster Strength
Existing concentrations of manufacturing and aerospace employers. The
South Suburban MSA, which includes Chula Vista, contains 10-20% of the
County’s employment in each of the following traded industry clusters:
Advanced Precision Manufacturing (17.6%), Apparel Manufacturing (13.5%),
Bi-National Location
A competitive advantage – an asset that is
valuable, rare, and hard to duplicate.
Chula Vista Competitive Location Assessment August 2013
Page 24
and Aerospace, Navigation, and Maritime Technology (11.6%). [2010 data,
SANDAG, December 2012].
Business Climate
Vision for the future as demonstrated with
Bayfront Master Plan and University Park and
Innovation District.
Council is educated and pro-business.
City staff / senior management experienced,
capable, and professional.
Sustainability reputation.
Business Costs
Lower costs of doing business due to Enterprise Zone incentive.
Workforce housing while offering executive housing, high quality amenities,
and open space.
Research, Innovation & Knowledge
Within close proximity to major research institutes throughout San Diego
region, well known throughout the US.
Plans for recruitment of University and / or technology institutes.
Incentives
The Enterprise Zone provides some of the only incentives available with the
demise of Redevelopment, so this becomes highly significant to new and
expanding businesses to reduce state liability taxes.
Customized training through Southwestern College can also be a significant
savings to business during their start-up and / or expansion.
Assistance with reducing utility costs by utilizing renewable energy and / or
energy efficient technology.
Quality of Life
Overall quality of life and community amenities, particularly in newer
communities in eastern Chula Vista.
Range of housing diversity and affordability.
Quality schools and career pathway educational opportunities.
“Momentum is building
behind big projects that could
transform Chula Vista from a
bedroom community into the
world-class destination for
recreation, retail, and work”
Mayor Cheryl Cox, 2013 Annual State of the City Address
Chula Vista Competitive Location Assessment August 2013
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According to SCEDC’s recent Manufacturing Sector Report, 84% of the
manufacturers are pleased with their current locations, citing historical
presence, family ties, customers and suppliers located nearby, and quality of
life as key reasons.5
5 Source: South County EDC, Manufacturing Sector Report, June 2012
Chula Vista Competitive Location Assessment August 2013
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2.4 Challenges & Constraints
The following challenges and constraints will affect the implementation of a marketing
and recruitment initiative, most are within the control of the City, and can be overcome
in time.
Inability to deliver major industrial sites for new users within 6-12 months. The
City’s plans designate extensive employment land, but much of it is raw land,
lacking entitlements, infrastructure, and graded pads – ready-to-go sites.
Dispersal of industrial uses throughout various sectors of the City, without
clear district identities, consistent public improvements, concentrations of
synergistic employment uses, and availability of supporting amenities. The
one exception is the Eastlake Business Park which is located in close
proximity to numerous shopping, dining, and service outlets.
Eastlake was a quality location for small industrial / assembly type operations
until non-conforming uses located within the vacant space. During the
assessment, this was one of the few (only) locations where a company could
construct a building on a Greenfield site. But, due to non-conforming uses
throughout the park this location would be downgraded by most consultant /
companies as a viable location for a light industrial operation.
Difficulty in competing for employment uses with huge inventory /
development potential and low values / rental rates in Otay Mesa.
Additionally, Otay Mesa offers more permissive industrial zoning, state-of-the-
art flex buildings, no conflicts with residential uses, room for expansion, and
excellent access via I-5 / SR 905 (no toll road). SANDAG projects an increase
in Otay Mesa employment from 14,360 in 2008 to 51,110 in 2050.
Lack of catalysts such as universities, research institutes, and existing
employment clusters currently found in North / Central County, e.g., UCSD,
USD, and SDSU; Salk Institute, Scripps Research Institute, and Sanford
Burnham Institute; etc.
Lack of reinvestment in older industrial areas, i.e., Interstate 5 corridor (Bay
Boulevard / L Street) and western portion of Main Street.
Lack of good documentation on labor force, skills available, wage and salary
survey.
Impact fees and connection fees are high compared to the rest of the region
and are a disincentive for new locations.
Chula Vista Competitive Location Assessment August 2013
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Border crossing delays, important infrastructure to the growth in industry
clusters on both sides of the border.
Some concern from those interviewed regarding rail and telecommunications
services.
Rail is not a major factor to the target industry clusters identified. Rail appears
to be important to industries in Mexico and possibly Otay Mesa. If rail became
a critical factor to an existing company, such as, ITC, it should be identified
for solution. At this time infrastructure investment should be made for “ready-
to-go” sites.
One company interviewed indicated there was not sufficient fiber for a data
center. However, for the industry target clusters, T1 should be sufficient.
Assume new development should be developed with the latest
telecommunications fiber.
Perceptions, not always reality, but red flags for marketing and promotion to
change perceptions particularly within the region:
Perception of extensive time for permitting (noted from interviews and
survey).
Perception of the South Bay as a tertiary market for employment uses within
San Diego County.
Perception of lack of employers / jobs in the South Suburban MSA, which
includes Chula Vista, within the important traded industry clusters of
Biotechnology and Pharmaceuticals, and Information and Communications
Technology (ICT). The South Suburban MSA also contains a relatively small
share of the County’s Entertainment and Hospitality cluster (6.5% of jobs).
[2010 data, SANDAG, December 2012]
Perception there is limited supply of executive housing and associated
lifestyle amenities. The County’s high-paying and high tech jobs are generally
concentrated in the North / Central County. These areas offer desirable
communities with a broad range of executive housing, high-performing school
districts, and access to natural amenities including the beach. By contrast, it
is perceived most Chula Vista home prices are concentrated in entry level /
median range. Employers located in the Central County (for example, Kearny
Mesa) can conveniently draw both North County executives and the South
Bay work force.
Chula Vista Competitive Location Assessment August 2013
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Utility rates are comparable to the region. However, they are high compared
to other southwestern locations which for an energy-intensive company may
be a disincentive (not within the control of the City).
A constraint not within the City’s control is location in California, i.e. higher
costs and higher taxes.
Recommendations
CLIENT
Chula Vista Competitive Location Assessment August 2013
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3.0 Recommendations
Recommendations are based on the project findings and focused on moving Chula
Vista from “good to great” as it relates to being competitive for business locations.
The City is currently constrained with limited “shovel-ready” sites in quality business-
park environments. This is a readiness priority and plans should be put in place to have
sites ready within the foreseeable future. Competitiveness recommendations include:
Project Development, Policies & Practices
Real Estate Readiness
Positioning
From a business attraction/recruitment perspective, now is the time to be marketing and
calling on prospective businesses. Location decisions from the time of first contact to
decision will typically range from 18-36 months which is well within the range of Chula
Vista having “shovel-ready” properties. Go-to-Market recommendations for business
retention, expansion and attraction include:
Packaging
Marketing, Communications and Prospecting
Recommendation 1.0: Project Development, Policies & Practices
The City has done an exceptional job in planning and visioning for the future. As the
economy begins to return, the Project Team recommends the City stay focused on the
Vision, General Plan and the transformational goals it has put in place as well as
addressing policies that will strengthen the long-term competitiveness for significant
development and expansion of new, high quality employment uses in Chula Vista:
1.1 Implementation, e.g., groundbreaking of one or more major new mixed-use
developments on the East Side.
1.2 Agreement with a university for development of at least an initial phase campus
within the UPID. HomeFed is leading the planning and recruitment effort, with
assistance from planners Ayers Saint Gross and U3 Ventures. The City and
HomeFed should also consider alternatives to a four-year university, such as
vocational schools, institutes, research centers, etc.
1.3 Feasibility study, financing plan, and timeline for completion of Main Street/Rock
Mountain/Hunte Parkway. Completion of this corridor from I-805 to SR 125 is an
essential link both for accessibility and marketing sites in the southern portion of
Otay Ranch.
Chula Vista Competitive Location Assessment August 2013
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1.4 Continue progress on implementation of the Bayfront Master Plan.
1.5 Protect and preserve business park and industrial zoning. There has been a trend
to allow, through Conditional Use Permits, family/consumer focused commercial in
light industrial and industrial zoned areas. As noted in the evaluation by Site
Consultant Frank Spano, “Eastlake was a quality location for small industrial /
assembly type operations until non-conforming uses located within the vacant
space. This was one of the few (only) locations were a company could construct a
building on a Greenfield site. BUT, due to non-conforming uses throughout the
park this location would be downgraded by most consultant/companies as a viable
location for a light industrial operation.”
1.6 A “red flag” item is length of time for permitting and should be addressed in the
short term. The City does have an “expedited” process for permitting priority
business opportunities; however, there still remains to be a perception that the
permitting process is difficult and lengthy. This, whether reality or perception, must
be documented in sales packages with case studies where projects have been
fast-tracked – with a goal of demonstrating permitting can be completed within six
months (ready-to-go property). This should also be an item of discussion with
brokers.
1.7 Permitting fees and up-front connections fees appear to be high and higher
compared to other areas in the region. This could be a disincentive for those
businesses looking to locate who are trying to reduce their upfront costs. Fees
should be in line with other areas in the region, documented as such when
showing to a prospect.
1.8 The key incentive for companies seeking location is the Enterprise Zone Tax
Credit (sales and employee credits) that reduces a company’s state liability tax.
There are other incentives such as Foreign Trade Zone and Recycling Market
Development Zone but those will be used on a case by case basis. A draft Local
Business and Jobs Investment Policy prepared in July 2012 is an excellent start
on a local package. Incentive packages should focus on reducing any fees, or
deferral of fees, that could become a disincentive to any investment. Most
companies with large investments will be looking for incentive opportunities to
reduce upfront costs.
1.9 Work with City-owned as well as privately-controlled utility / infrastructure
departments to coordinate a “Team-Approach” in securing information and
presenting the information to site selectors and companies interested in Chula
Vista. Prior to launching any recruitment plan, review with all parties 1) industry
targets, 2) high level information needed for sales packages and proposals and 3)
Chula Vista Competitive Location Assessment August 2013
Page 32
the marketing/recruitment plan and schedule so they can be prepared to answer
questions for prospects contacted by the City. When Chula Vista Economic
Development requests information from energy or telecommunications, there
should be an agreement that the company will get the information back in a timely
manner.
Recommendation 2.0: Real Estate Preparedness
As noted in Phase I Corporate Location Assessment, lack of “shovel-ready” land is
Chula Vista’s major weakness. The following are recommended as key near-term (five
years) actions steps from a land use/real estate perspective in support of the City’s
goal of attracting high quality employment:
2.1 Complete land use and zoning designations for the remaining Otay Ranch
villages. These planning processes are currently underway at the same time that
the City and HomeFed Corporation are working on planning and recruitment for
the proposed university at UPID. As the City and its development partners
complete each successive planning process and initiate new developments, there
is an opportunity to publicize and market the City’s changing land use pattern.
2.2 Define site constraints and development potential for the 85-acre portion of the
University Park and Innovation District, so that marketing efforts can commence
now, rather than waiting for the university.
2.3 Bring online within the next 18-36 months, several “shovel-ready” sites
demonstrating that planning, zoning, surveys, title work environmental studies,
soils analysis and public infrastructure engineering has been completed. If
feasible, to make the shovel-ready site more competitive bring the public
infrastructure to the site – all utilities including high-speed broadband access (from
a business perspective this will save time and money in the upfront development
process).
2.4 As noted in Recommendation 1.5, put in place systems to protect and preserve
the zoning for the high quality employment uses.
Chula Vista Competitive Location Assessment August 2013
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2.5 Identify a site for an Advanced Manufacturing facility of 100,000 sq. ft. or more.
Employ between 50 to 100 workers,
Typically pay average wages based on skill
sets and a complete fringe benefit package,
Building as small as 30,000 and as large as
100,000 SF (would consider a multi-tenant
lease type building, especially for those
companies only needing 50,000 SF and
under),
For a 100,000 SF building, a company would
want at least 10 acres,
Must have a site large enough and with
separate entrances for employees / visitors
and for truck traffic,
Prefer a 5-year lease with provisions to extend lease for additional 3 to 5 years,
Investment around $8.0 to $12.0 million but for larger users around 100,000 SF
could be as high as $20.0 million,
Companies will want a controlled, attractive, and planned light industrial park with
compatible existing industrial uses,
A good “pad-ready” site would be great – level site, permitted for industrial uses,
building height of at least 40 feet, all utilities at site including 10-12 inch water /
sewer, 4 inch natural gas, good access to electric power substation,
telecommunications in place in park,
Within 5 miles of interstate highways, good 4-lane roadways,
Cannot be adjacent to residential neighborhoods also away from retail and heavy
commercial areas,
Incentives could include assistance with CV’s huge start-up costs including
community impact fees / utility impact fees.
2.6 Identify City-supported financing strategies and mechanisms available to land
developers and builders to assist with site preparation and infrastructure needed
for new industrial uses. Many older industrial uses on the West Side are in need of
rehabilitation or teardown/new construction. In the absence of redevelopment
funding, the City needs to work with property owners and businesses to identify
optimal financing approaches to support reinvestment in these areas.
2.7 Assist property owners in branding industrial sub-areas on both the West Side and
East Side.
“Chula Vista is positioned for
smaller-type operations that need
to be located within the San Diego
metro area, but could be
competitive for the larger (100,000
SF) – they will be competing with
surrounding communities and the
only way to effectively compete is to
have “shovel and pad ready” sites.”
Frank Spano, Managing Director
The Austin Consulting
(Site Selection Consultants)
Chula Vista Competitive Location Assessment August 2013
Page 34
2.8 The City should work with property owners and other district representatives to
create stronger district identities, including geographic boundaries, building
profiles, tenant mix, and principal strengths and weaknesses. These identities can
be used to prioritize public improvements, marketing programs and tenant
recruitment efforts.
2.9 Identify opportunities for incubator or “accelerator” space with developers, building
owners and/or current businesses with surplus space.
2.10 The ambitious plans for the City’s Bayfront and East Side are difficult to grasp in
the abstract. As plans are approved, and new developments initiated, the City and
its partners should pro-actively market its readiness for new development,
identifying both the opportunities for developers and the City’s requirements. This
would likely take the form of a continued concerted outreach effort through
channels such as NAIOP, BOMA, ULI, BIA, UCSD Connect, broker caravans, etc.
2.11 “Place making” will continue to be important. Major employers are increasingly
concerned about quality of life issues for their employees, as well as economic
and environmental sustainability. The creation and enhancement of “24/7” mixed-
use environments that accommodate “live/work/play” is an essential economic
development tool. The City is aggressively pursuing new mixed-used
developments with place making amenities, such as Millenia, University Park and
Innovation District, University Village on the East Side and the Bayfront Master
Plan and should continue to do so.
Chula Vista Competitive Location Assessment August 2013
Page 35
Recommendation 3.0: Positioning
Chula Vista’s bi-national location is an under-utilized, unique and rare asset. Locating
companies in California is a challenge at best given the state’s reputation, regulatory
climate and tax structure and puts Chula Vista in direct competition with other
southwestern states which, on a comparative basis, have a lower cost structure.
What is distinctly unique that differentiates Chula Vista is the proximity to Tijuana, the
connectivity to San Diego’s resources and educational institutions as well as a
multinational residence base. Chula Vista offers a quality location for headquarters,
sales, research/development and high tech testing with the cross-border manufacturing
opportunity.
Chula Vista Competitive Location Assessment August 2013
Page 36
The following are recommendations to strengthen this unique bi-national position and
opportunity to collaborate with Mexico/Tijuana on creating a dynamic International
Gateway and utilizing the advanced manufacturing strength to position for additional
recognition in this field:
3.1 Join and be a key player in the Cali-Baja Mega-Region Initiative. Chula Vista
needs to be at the table.
3.2 Join and participate with CONNECT, particularly as it relates to Advanced
Manufacturing initiatives and Sports Innovation Clusters.
3.3 Chula Vista is well positioned to be an Advanced Manufacturing Hub linked to
education and training (University Park and Innovation District). There is much
discussion about potential federal/state funding for an Advanced Manufacturing
Center in the US and California. Participate with San Diego State, CONNECT and
other organizations in the discussion and plans for competing for a federally
designated Advanced Manufacturing Center. This is a short-term opportunity, for
the long-term continue to build the Advanced Manufacturing Hub.
3.4 Chula Vista should begin meetings and develop a stronger working relationship
with Tijuana EDC. Chula Vista and Tijuana can benefit from a collaborative
economic development approach, particularly in attracting foreign direct
investment (FDI). Beneficial synergies include:
1) Agreement to assist with location packages for Mexican companies seeking to
have a US presence but needing to remain close to the border;
2) Chula Vista and Tijuana share industry clusters, particularly in the advanced
manufacturing fields. This synergistic relationship creates a unique selling
proposition and positions both as a world-class advanced manufacturing hub;
3) Collaborate and leverage recruitment activities to attract manufacturing to
Mexico from China or India (near-shoring) who also desire to have a regional
headquarters nearby, but in the United States, a benefit to both and a stronger
marketing package to the prospective company;
4) Working together identify assets that each can bring to the marketing package
to make a stronger value proposition for businesses, such as, proximity to
educational and research institutions;
5) Reach the global economy as an International Gateway.
Chula Vista Competitive Location Assessment August 2013
Page 37
Recommendation 4.0: Packaging
As noted in Phase I Competitive Location Assessment quality location decision
information and marketing collateral is a weakness. Existing available data sources are
highly fractured and disjointed, generating confusion and lack of awareness among
potential users and clients.
Resources, beyond staff time, will be needed to complete Packaging recommendations:
4.1 Compile a single inventory database and user-friendly map identifying all existing
and planned industrial areas within the City, applicable zoning, major property
owner/broker contacts, and probable timing of delivery.
Chula Vista Competitive Location Assessment August 2013
Page 38
4.2 Collateral materials to support marketing and business attraction include:
1) Map booklet/brochure;
2) City-wide Street Map;
3) Power Point Presentation;
4) Update Website focused on Chula Vista’s value proposition as a premier
location for business and industry;
5) Sales package (aka business cases) for each target industry that presents a
value proposition of why that industry is a fit for a Chula Vista location.
4.3 Prepare Data set files (12) that provide detailed information on Chula Vista,
including market access, business overview, labor, real estate, utilities, permitting,
transportation, government services, incentives, and quality of life.
4.4 Labor, workforce, and commuter data is weak and is a key location factor. Chula
Vista has unique proximity to the UC-State systems which is one component of
the workforce, typically the engineering. There needs to be a stronger workforce
training alliance / coalition to meet the other needs (vocational) of manufacturers,
particularly advanced manufacturers. There also needs to be better
documentation of the existing labor base, which may require a labor force
study/analysis completed if the data cannot be gathered by local agencies to meet
the needs of business.
Reports & Background
Research
CLIENT
Chula Vista Competitive Location Assessment August 2013
Page 40
4.0 Reports & Background Research
Title Author Date
2007-08 San Diego County Fee Survey Sandag 2008
America’s 2 Systems of Innovation: Recommendations for Policy
Changes to Support Innovation, Production & Job Creation
Dan Breznitz & Pete Cowhey Feb. 2012
HomeFed ENA UPID City Council, Agenda Statement Dec 2012
IEDC Resource Agencies to Explore IEDC 2013
Inclusion: The Missing Link in Economic Competitiveness – online
article Forbes.com
Rebecca O. Bagley, Contributor to
Forbes
Aug. 2012
Is US Manufacturing Coming Back? online article from Inbound
Logistics
Lisa Harrington Aug. 2011
Local Leadership Key in Inclusive Economic Competitiveness –
online article from Forbes.com
Rebecca O. Bagley, Contributor to
Forbes
Feb. 2013
Nearshoring Strategy will Boost US Manufacturing Jobs – online
article from MRFTech.com
Dr. Chris Kuehl, Economic Analyst Oct. 2011
Offshoring? Reshoring? Nearshoring? How Will Global Mobility
Change in the next 10 Years
Grabel 2013
Palomar Gateway District Market Study Gafcon, Inc. Sept. 2011
San Diego Innovation Assets Report CONNECT Dec. 2011
Showcasing: City of Chula Vista, online profile from Clean TECH
San Diego
Clean TECH San Diego Mar. 2013
South & East County Comprehensive Economic Development
Study
Chabin Concepts Jun. 2011
Southwestern College Educational Master Plan Southwestern College Mar. 2012
Strengthening the link Between Industry and University Research
– online article from Forbes.com
Rebecca O. Bagley, Contributor to
Forbes
Jul. 2012
Strengthening the link Between Industry and University Research,
Part 2 – online article from Forbes.com
Rebecca O. Bagley, Contributor to
Forbes
Aug. 2012
Urban Core Specific Plan RRM Design Group Apr. 2007
Chula Vista Competitive Location Assessment August 2013
Page 41
4.1 Appendix
1. KMA Real Estate Market Conditions
2. Austin Consulting Site Location Observations
–Project Galaxy RFI
–Site & Building Questionnaires
–Utility Questionnaire
3. Stakeholder Business Climate Survey
Chula Vista Competitive Location Assessment August 2013
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4.2 Limiting Conditions
1. Purpose of this report was to identify strength and weakness based on company
location criteria and identifies best fit targets based on assets and opportunities.
2. The analysis contained in this document is based, in part, on data from secondary
sources such as state and local government, planning agencies, real estate
brokers, and other third parties. While Project Team believes that these sources
are reliable, we cannot guarantee their accuracy.
3. The analysis assumes that neither the local nor national economy will experience
a major recession. If an unforeseen change occurs in the economy, the
conclusions contained herein may no longer be valid.
4. The findings are based on economic rather than political considerations.
Therefore, they should be construed neither as a representation nor opinion that
government approvals for development can be secured.
5. Market feasibility is not equivalent to financial feasibility; other factors apart from
the level of demand for a land use are of crucial importance in determining
feasibility. These factors include the cost of acquiring sites, relocation burdens,
traffic impacts, remediation of toxics (if any), and mitigation measures required
through the approval process.
6. Development opportunities are assumed to be achievable during the specified
time frame. A change in development schedule requires that the conclusions
contained herein be reviewed for validity.
7. The analysis, opinions, recommendations, and conclusions of this document are
KMA's informed judgment based on market and economic conditions as of the
date of this report. Due to the volatility of market conditions and complex dynamics
influencing the economic conditions of the building and development industry,
conclusions and recommended actions contained herein should not be relied upon
as sole input for final business decisions regarding current and future
development and planning.
Chula Vista Competitive Location Assessment August 2013
Page 43
4.3 Chula Vista Business Cluster Analysis – Project Team
Audrey Taylor, President & CEO, Chabin Concepts
Audrey founded Chabin after 10 years in the Economic Development field. Chabin
Concepts has been advising local communities, counties, regional economic
development organizations, and even states on their economic development programs
and policies since 1988.
Chabin uses a team approach to research a community’s competitiveness (strength,
weaknesses and opportunities), and then focusing on assets identifies “best fit targets”
and delivers a customized go-to-market strategy for the community.
Sarah Murley, Co-Founding Partner, Applied Economics
Sarah is a co-founding partner of Applied Economics. Sarah has conducted economic
base analyses, business climate assessments, target industry analyses, supplier
identification strategies, occupational assessments and labor market analyses, and
community improvement plans for numerous cities, counties, and economic development
agencies.
Frank Spano, Managing Director, Austin Consulting
Frank is responsible for managing and directing all operations of Austin Consulting.
Austin Consulting is the location strategy consulting division of The Austin Company, an
industry leader in assisting corporate client in developing national and global location
strategies, relating to community and site selection, incentive negotiations and property
due diligence for manufacturing plants, distribution facilities, R&D, services centers, data
centers and offices. Austin has completed over 1,700 consulting assignments.
Paul C. Marra, Senior Principal, Keyser Marston Associates, Inc.
Paul is a senior principal with Keyser Marston Associates, Inc. in the San Diego office.
He has over 25 years experience in real estate market and financial evaluation, fiscal and
economic impact assessments, and public/private partnerships.
Daniel Silverman, V.P., Business Development, Research on Investment
ROI, Research On Investment, is a specialized market research firm that produces
validated lead generation services based on originally sourced intelligence. ROI monitors
the trajectory of corporate investment by proactively gathering and analyzing market
intelligence on areas such as industry trends, investment trends, and specific businesses
across a multitude of geographic locations and industrial sectors. The ROI service is
unique because proprietary research methodologies are directly related to a fundamental
understanding of the corporate investment and site selection process.
Chula Vista Competitive Location Assessment August 2013
CLIENT
Chabin Concepts
2515 Ceanothus Ave, Ste 100
Chico, CA 95973
(530) 345-0364
www.chabinconcepts.com
Applied Economics
11209 N. Tatum Blvd, Ste 225
Phoenix, AZ 85028
(602) 765-2400
www.appliedeconomics.net
Austin Consulting
6095 Parkland Blvd
Cleveland, Ohio 44121-4186
(440) 544-2617
www.theaustinconsulting.com
Keyser Marston Associates, Inc.
1660 Hotel Circle North, Suite 716
San Diego, CA 92108
(619) 718-9500
www.keysermarston.com
Research On Investment (ROI)
6300 Du Parc Avenue, Suite 309
Montreal, Quebec H2V 4H8
(514) 495-5231
www.roivision.com