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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/16/2008 - ECONOMIC HEALTH/FINANCIAL ISSUES UPDATE DATE: December 16, 2008 WORK SESSION ITEM STAFF: Mike Freeman FORT COLLINS CITY COUNCIL SUBJECT FOR DISCUSSION Economic Health/Financial Issues Update. EXECUTIVE SUMMARY The overall economic goal for the City is to balance high quality economic development with quality community and environmental goals. 2008 has been successful on this front due to proactive economic policies and actions. The City has strong partnerships with diverse organizations, strategic marketing, and is focused on business retention, expansion and recruitment for new businesses that fit with Fort Collins' values and continues to focus on quality technology and retail developments. Sales tax collections are on track for 2008 with strong showings in restaurant sales and food store sales. Use tax revenue is also on track to meet the 2008 budgeted amount of$8.2 million. Due to the failing bank and investment industry nation-wide, the City's investments are lower than projected. In 2009, the City faces challenges such as broad economic slowdown, decrease in sales tax collections, decrease in use tax collections, and potential financing difficulties for developers. Fort Collins is not immune to the global economic climate,yet has unique economic strengths. We have a highly educated workforce,an innovative and globally-focused university,supportive culture for entrepreneurs, and diverse industries. 2009 will also bring economic opportunities to Fort Collins. Colorado State University's focus on research and development and commercialization of research will nurture and expand start-ups that most likely will stay in Fort Collins. The City's collaboration with the Downtown Development Authority will result in new projects that benefit the whole community and differentiate it from other regional communities. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff will discuss economic and financial highlights from 2008 and discuss 2009 challenges and opportunities and will answer questions and discussion suggestions from City Council. December 16, 2008 Page 2 BACKGROUND In 2004, City Council appointed a group of community representatives to develop a set of recommendations intended to address the economic vitality and sustainability of Fort Collins. Members of the Economic Vitality and Sustainablity Action Group(EVSAG)met for two years and created an economic strategy map for the City to follow in order to achieve economic success and longevity. A major outcome of EVSAG was the Economic Action Plan. The Action Plan consists of four key strategies for economic health: • Diversify the economy • Build partnerships • Support business expansion and attraction • Be proactive on economic issues. City Council is given periodic updates on the implementation of the Economic Action Plan. Financial updates are also provided to give an overall picture of economic health,in the community and the City's organization. ATTACHMENTS 1. Powerpoint presentation. ATTACHMENT 1 CITY COUNCIL ECONOMIC AND FINANCIAL UPDATE December 16 , 2008 Mike Freeman , Chief Financial Officer City of lob t Collins f� At PRESENTATION GOALS • Economic and financial highlights from 2008 • 2009 challenges and opportunities • City Council questions and suggestions Fort Collins 1 2008 BUSINESS AWARDS • Ranked 10th Best- Educated City in America , Forbes magazine , November 2008 • 2nd Best Place to Live , Money magazine , August 2008 • Named 3rd Best Place for Business and Career ; Forbes magazine , March 2008 • Ranked 39th Best Place to Live and Launch a Business ; CNN/Money, March 2008 F�t` o ins bit ECONOMIC ACTION PLAN STRATEGIES • Four key strategies : - Business incubation, retention, expansion and attraction - Be proactive on economic issues - Build partnerships - Diversify the economy • Overall goal - high quality economic development, balancing growth with environmental and quality community goals Fort Collins 2 BUSINESS INCUBATION , RETENTION , EXPANSION & ATTRACTION • Primary focus is on business retention , expansion • Mayor and City Manager visits to primary employers • Chief Financial Officer retention visits • Participation in the NCEDC retention program — 50 primary employers interviewed in 2008 Fort` Collins BUSINESS INCUBATION , RETENTION , EXPANSION & ATTRACTION • Create positive relations with existing businesses • Buildable lands inventory • Site selection tool enhancements • Business attraction — Continued interest from employers outside region • Harmony Road — Harmony Technology Park • Mason Corridor — Capstone cityof Fort Collins 3 BUSINESS INCUBATION , RETENTION , EXPANSION & ATTRACTION • Diverse work . . . — $ 1 million to CSU ' s SmartGrid Integration Lab — New Belgium Brewing—best place to work — Pelco expands their Fort Collins office — Butter Cream Cupcakery , first & only cupcake shop in the city — Clean Air Lawn Care , Entrepreneur magazine ' s top green franchise -�. City of Fort Collins ❑T 17 0 r"p Par Map Satellite Hybrid d41 Layers ❑y 1a - Q ❑ Major Employers ❑* © ❑ Business Support +❑ 0 q = H.a,k l eu.ry s� OO ❑Targeted Industries Mountain 9 .innm Vie"' - Andersonvnie 0� ❑ Bioselence are � Slntuttl _- _-_ 0© ❑ Clean Energy 9A, mo oe ❑ Ir Hardware 0, kUb' ry St 1a EMueerry St Anowhend 14 1a ENiwny Sti Coloiado State a ® ❑ IF software r state norsetooth University 87 OO ® ❑ Uniquely Fort Coins Fmk State Park ❑ Q Available Properties rties � - av �rspct lea Fort Collins EV�2wa t pa ❑* C] El Developable Land o ao aabatl o pwwyyr va,!x ._ar,. �� ❑ incentive Areas 19 Drakes OLJ ❑Zoning 2a7 ➢mmt Besern ® ❑Traffic counts Horseman 1Svi0ix i 0� ❑ Demographics akuntian Part CommurM Perk - '^ ,v eorsetaor w, u ® ❑O ❑Transit Routes n t,i, HI/ ❑ Bills Trais El Natural Areas + N , =n ® EHarmuav Rd Harmony ® Tlmn ❑+ath^ ,r 1] ' O [-I Other Layers row o 87 Map data@2008 Telarlidialk - =ry - Update Map Clear Map ( 1 Nestled against Me foothills of the Rocky Mountains, arengsCe the banks of the Cache La Poud re River, ies the City of Fort Collins. With a population of 136, Overview L^ people, Fort Collins as home to Colorado State University and is the retail, ban en and healthcare center for Northern Colorado. Campus West )l The Campus West area, an aging commercial step located netdto Colorado State University, as ripe for redevelopment. The area is surrounded by the lighters (_ concentration of housing anywhere m the city, particularly for students, university staff and faculty. Downtown Downtown, a National Historic District and a model for Dsneysnd's Man Street, a a unique and vibrant place unlike any other. Attractive buildings, active st life, and a wonderful atmosphere merge with a variety of boutique/entertainlnenVtlining businesses that attract visitors from around the country. East Mulberry The East Mulberry Corridor is a primary entryway into the Community and a ripe for redevelopment. The area, located close to the scenic downtown area, Corridor L contains a met of commercial, industrial and residential uses. Foothills Mall The Foothills Mall is located in the geographic center of Fort Collins along CD" Avenue, Fort Collins' primary transportation artery. Tha area covers app ro 70 acres and is the focus of an extensive private redevelopment effort with significant City support. Harmony Corridor y The Harmony Corridor is an attractive primary gateway into the community. The area has experienced significant private investment, resulting in expensive n L employment, retail and housing, over the Lost 10 years. 4 --- A e dig . • - '. • 1 • t. t ` pop . 4 - - - It All Jb ,! ' ( , 1 : • a: ! 10 f� .:. Access Areas s Current (Triad ) l � Future Water Valley Area �� '� Future Water Valley Area {`�� � � ��.�• ♦ -�✓/ ��J.d Mt. {1 f ' l BE PROACTIVE ON ECONOMIC ISSUES International Council of Shopping Centers Conference Business communications strategy and I I • . I I Soapbox f Economic - " Staying Focused in Tough Fort Collins ior BE PROACTIVE ON ECONOMIC ISSUES • Economic Enewsletter and Business page articles — 500 Enewsletter subscribers — 3 , 000 hits/month on fcgov. com/business • Shop Fort Collins First holiday campaign — Multiple partners , multi -faceted promotion — Support for Be Local Campaign • Community Branding — Marketing folders complete in early 2008 — Community gateway site F�t` Collins FtC • • , online guide MOIL . . information about Fort Co'.Jiris has never been easier' NEW www. ftcollins. com of 'MEMO Fort�iiS 7 BUILD PARTNERSHIPS • Sustain/grow State/ Federal employment 2 • Colorado State University — Office of Economic Development — Research Foundation — Ventures — Superclusters • Rocky Mountain Innovation Initiative C0104o strategic plan • NCEDC site selection inquiries • UniverCity Connections UnivCrsit)- Fort` Collins �� BUILD PARTNERSHIPS • Tour de Mason • Boxelder Stormwater agreement • Financial agreement for downtown hotel/ mixed - use development • FortZED Implementation FORT — Department of Energy grant — Department of Local Affairs grant — Green Dining Week promotion City of Fort Collins 8 BUILD PARTNERSHIPS Rocky Mountain Innovation Initiative ( RMIZ ) Mission • Accelerate the success of high impact innovation - based startups • Promote a regional entrepreneurial culture and ecosystem • Support science/technology industry clusters F�t` o ins BUILD PARTNERSHIPS RMI1 successes • $ 63M equity raised since 1998 • 162 jobs since 1998 • Average salary $ 73 , 000 — Larimer County average wage is $ 36 , 000 • 2008 : held 15 events , 1200 attendees City of Fort�ins 9 DIVERSIFY THE ECONOMY Develop industry clusters — Clean Energy — Biotechnology — Software • RMF • GIS — Uniquely Fort Collins F�t` Collins DIVERSIFY THE ECONOMY GIS Cluster • 25 businesses , 3 cities , 3 NTAIN CSU affiliates , NCEDC , \"" -kQ uTgcmNL qy Q6u VTER State GIS coordinator, National Parks- Dept . of Interior • Strategic Plan written • Research of GIS legacy and industry completed • www . gisalley . com • 2 GIS Tradeshows � . Fort Collins 10 DIVERSIFY THE ECONOMY • Arts and Culture initiatives �D strict — Discovery Science Center — DDA Amphitheatre — Bohemian Music Venue — CSU Center for the Arts — Arts Alliance concept Cityot F�t` ns bill 8000 Employment Sector E 906 7000 6000 5000 ,saa 4000 3000 13 0 ❑ ❑ ° 2000 ° L . . [ 1 L 1000 0 2001 2002 2003 2004 2005 2006 2007 (LC) Brewing Employment Bioscience Employment Chip/Hardware Employment Software Employment 11 400 Total Businesses ° 350 ° 300 250 200 150 100 50 30 4 1. se 0 3 I 11 2001 2002 2003 2004 2005 2006 2007 (LC ) Brewing Employment Bioscience Employment Chip/Hardware Employment Software Employment WHAT ' S IT MEAN ? • While employment in chip design is down , wages are up dramatically — Wages in this cluster are significantly higher • Software companies are seeing the fastest rate of growth in establishments , but wages are now growing at the same proportion • Craft brewing industry is growing jobs , but wages are not growing at the same rate City 0f Fort Collins big 12 RETAIL PRIORITIES • Foothills Mall redevelopment • Front Range Village lease up • North College Redevelopment — King Soopers Marketplace • Mason Corridor Related Redevelopment — Wal - Mart/Toys- R- Us/Wild Oats/Whole Foods Center — Choice Center/Capstone City f -- rF�t Collins 2008 REVENUE UPDATE Fort�i1s 13 SALES TAX REVENUE • Increased 0 . 7 % through October 2008 compared to 2007 • Factors contributing to the growth in 2008 : • Restaurant Sales ( + 5 . 6 % ) • Food Stores ( +4 . 6 % ) • Retail categories challenging growth in 2008 : • General Merchandise Stores (-8 . 6 % ) • Home Furnishings & Consumer Electronics ( + 0 . 7 % vs . + 16 . 0 % in 2007 ) F�t` Collins USE TAX REVENUE • On track to meet the 2008 budgeted amount of $ 8 . 2M • Decreased 17 . 4 % through October 2008 when compared to the same period in 2007 • Due to one-time audit revenue in 2007 City of Fort Collins 14 INVESTMENTS Investment Earnings ( in millions ) : Total General Fund Average Interest Rate 2005 actual = 9 . 8 1 .0 3 . 34% 2006 actual = 13 . 7 1 . 8 4 . 34% 2007 actual = 15 . 6 2 . 3 4 . 91 % 2008 budgeted = 15. 2 2 . 0 4 . 75% 2008 projected = 13 . 1 1 . 8 4 .09% 2008 YTD = 12 .2 1 .4 3 .99% 2009 budgeted = 14 . 0 1 . 9 4 . 50% 2009 projected = 11 . 5 1 . 5 3 .25% Worths 2009 OUTLOOK CRY 0111ins 15 CHALLENGES • Broader economic slowdown — Interest rate environment — Sales tax collections • Local economic slowdown — Use tax collections — Project financing difficulties — Slower than planned Front Range Village lease up — General Growth financial condition/possible bankruptcy — Development review — associated revenues decline bil of Fort � STRENGTHS • Quality community — Parks & open space — Schools — Environment • Colorado State University — Engines lab , Superclusters , CSU Ventures • Support for entrepreneurs and start up companies — RM12 — Colorado State University — NCEDC innovation economy initiative City of Fort�ins 16 STRENGTHS • Alignment of City staff economic health goals — One stop shop for development — Development Lead Team • Retail projects — Front Range Village opening — North College Marketplace • FortZed implementation • Target Industry implementation • Urban Renewal Authority/ Downtown Development Authority F�t` Collins ift M OPPORTUNITIES • Collaboration and Partnerships — CSU ' s continued focus on research and development and commercialization of research — Downtown Development Authority/City collaboration — Arts Alliance proposal — Community Marketplace — Engines lab expansion Fortes 17 OPPORTUNITIES • Further leverage Urban Renewal powers where appropriate • Foothills Mall Redevelopment • Amphitheatre/Music Venue projects • Continued targeted industry initiatives • RMIZ building F�t` Collins SUMMARY • 2008 continued successes in Economic Health • 2009 challenging year for the community & economy • Staff' s recommendation is to continue to implement the economic programs and strategies begun in 2006/2007 City of Fort Collins 18 ECONOMIC HEALTH WEBSITES • Fcgov . com/business • Fortcollinsinnovation . com • Ftcollins . com/working aty of � tf� Pyrt suppor in or _o in;, (._o ora o rM a �- r. Maybe the best place to start a new business is where the people have no shortage of initiative. BUSINESS 110 llins Entrepreneurs thrive in Fort Collins. CALENDAR Fort Collins stands out nationally as one of the best places to have a business and Colorado office of career, one of the best places to live and ' Economic launch a business, and we have the highest Rocky Mountain Development and Innovation Initiative International Trade number of patents per capita in the U.S. (RMI') (according to Fast Company, July 2007). Colorado State Colorado State University's Use this site to connect to local, regional and university Competitive Edge national entrepreneurial resources. Colorado State When you look around Fort Collins, you'll City Economic University Matters notice the businesses are independent, but Development the passion is mass produced. Lorimer County Northern Colorado Workforce - Economic Development Biking in Old Town Corporation Rocky Mountain . popInnovation Initiative Small Business Development Center Small Business Administration, Chamber of multiple choices Commerce Larmer County Business and Enterprise Whla(e We aro Inglis 11 `—^ L Fort Collim MINI 111011 Colorado fi0 Mills Nolth 19 Questions from City Council ? - MLto,q t�t`s 20