As discussed in the mobility section
above, a lack of high-paying jobs suitable for coastal residents has led to a
jobs-housing imbalance and increased congestion as workers commute to job sites
outside the subregion. The creation of an economic development strategy
promoting the development of businesses that can provide jobs for Coastside's
professional workers will address what may be the single greatest threat to the
sustainable development of the Coastside; the growing jobs-housing imbalance
and the congestion it creates.
REGIONAL ECONOMIC RECOVERY: CONSTRAINTS
AND OPPORTUNITIES
The strength of the regional economy and
the job growth it has created is driving the Bay Area population boom as the
strong recovery from the recession of the early 1990s continues to attract
businesses seeking the region's well-educated and entrepreneurial workforce.
Between 1990 and 1996 the Bay Area population grew by 355,000 residents making
it the ninth fastest growing metropolitan region in the country according to
recent U.S. Census figures. By the year 2000, total population in the
nine-county Bay Area region is estimated to reach nearly seven million
people.58 The impact of the region's continued economic recovery on the coast
subregion can be viewed in terms of both the constraints on the area's ability
to accommodate the growth as well as the potential opportunities such growth
presents.
For example, job growth in the services
and high tech manufacturing industries in San Mateo County and adjacent
counties translates to increased demands within the subregion for housing and
the infrastructure needed to accommodate it. Although existing land use plans
in the subregion allow for substantial residential development over the next 20
years, there are major constraints on the Coastside's ability to provide the
necessary infrastructure, including road capacity and water, to adequately
serve populations associated with this level of development.59
In addition to infrastructure constraints
such as adequate roads and utilities, the Coastside is characterized by a
number of unique environmental constraints which, if ignored, could lead to the
unnecessary destruction of the coastal resources that provide the very basis
for much of the subregion's economic vitality. For example, over 2,000 acres of
farmland in the subregion generated a combined average gross production value
estimated at $81.6 million in 1997.60 Converting farmland to non-agricultural
development would not only reduce the economic productivity of these
operations, but would also alter the rural character of the subregion, itself a
fundamental element of the Coastside economy. To ensure that future development
avoids significant adverse impacts on agriculture and other coastal resources,
an economic development strategy must consider the Coastside's carrying
capacity, or ability to accommodate growth and development within limits
defined by available infrastructure and natural resource capabilities.
At the same time, opportunities created by
the region's economic recovery and resulting job growth in the services and
high tech manufacturing industries are exemplified by proposed strategies to
develop businesses in these industries within the subregion. Creating quality
local jobs on the Coastside will foster a jobs-housing balance and enable
residents to work closer to where they live. Fewer commute trips outside the
subregion will reduce projected increases in the Coastside's growing traffic
congestion. With the economic impact in lost productivity and wasted resources
due to congestion estimated to be $3.5 billion annually within the nine-county
Bay Area region, any reduction in commuter traffic will translate into improved
economic productivity both locally and throughout the County.61
But how does the subregion take advantage
of the opportunities created by the regional economic recovery and develop an
economic development strategy to create jobs for its residents, reduce
congestion and stimulate the coastal economy? One approach is already being
pursued within the subregion through Half Moon Bay's recent Economic and
Business Development Strategy.
HALF MOON BAY'S ECOMOMIC AND BUSINESS
DEVELOPMENT STRATEGY
The recent Economic and Business
Development Strategy (Report) commissioned by the City of Half Moon Bay offers
an economic development strategy that is evaluated in this study for its
potential applications on a subregional level. Although it considers just one
of the three jurisdictions within the subregion, the Report's analysis of
opportunities created by the regional economy to develop a local job market in
Half Moon Bay can also be applied to the subregion as a whole. As with Half
Moon Bay, the creation of quality jobs for workers in Midcoast communities and
in Pacifica may be the most critical element of any long-range Coastside
economic development strategy.
The Half Moon Bay Report analyzes business
development opportunities in sectors of the economy that can provide high
paying jobs for Coastside residents. The Report's main conclusion is that Half
Moon Bay has significant opportunities to develop its coastal economy given the
substantial demand among small high tech firms in the region for highly skilled
workers and the need for medium sized office space and light manufacturing
facilities.62 The Report recommends promoting indigenous business development
and expansion by capitalizing on the considerable entrepreneurial talent of its
existing residents with more limited, strategic attraction of businesses from
outside the area.63
1990 U.S. Census data shows that
entrepreneurial talent for new business development is present throughout Half
Moon Bay's existing labor force. The data indicates the largest single category
of occupation for Half Moon Bay residents is managerial/executive (19.4%)
followed by the professional occupational category (13.4%). Together these two
categories comprise one third of Half Moon Bay's labor force. Further, the
Census data shows that of the various types of businesses that employ Half Moon
Bay residents, the services category is the major employer listed making up
nearly 30 percent of the employers named by local workers.
The demographic data on employment growth
in the labor force in Half Moon Bay is consistent with data for all of San
Mateo County where the occupation of nearly one third of all residents is also
in the managerial/executive (16.8%) or professional categories (14.7%). Census
data on employment growth in the labor force for the Pacifica is also similar
to the data for all of San Mateo County. The percent of Midcoast residents in
the managerial/executive and professional occupations is assumed to be similar,
and possibly higher, compared to other areas in the subregion.64 Given the
similarities in the percentage of residents throughout subregion employed in
the managerial/executive and professional occupations, the business development
strategies suggested in the Half Moon Bay Report should be valid when applied
on a subregional level.
BUSINESS DEVELOPMENT
Based on findings in the Half Moon Bay
Report, two possible targets for business development in the subregion would be
residents now commuting outside the area and non-residents living elsewhere in
the region that are positioned to launch a new business and might select the
Coastside to do so. Analysis of the economic base of San Mateo County and
surrounding counties can help locate where the individuals in these two target
groups can be found.
The economy of San Mateo County and
adjacent counties (San Francisco, Santa Clara, Santa Cruz) is heavily populated
with fast growing high-tech manufacturing and service firms, where high levels
of employment concentration in the region and high net increases in employment
are found in both industries. Employment growth in these industries is higher
in the region compared to other areas of the state. Spin off businesses in the
high-tech manufacturing and service industries are potential targets for
location within the subregion. Because both industries provide goods and
services that can be produced anywhere, firms in these industries could locate
on the Coastside, unless they have requirements unique to their firm that could
not be met by the subregion.65
These industries also match the
entrepreneurial profile of many of the residents in and visitors to the
subregion and thus represent a pool of prospects for new enterprise development
on the Coastside. To encourage new enterprise development in the high-tech
manufacturing and service industries, existing businesses with products or
services that could meet the needs of either industry could be encouraged to
expand their operations. In addition, the Coastside could actively recruit San
Mateo County businesses that are seeking expansion locations elsewhere in the
County and also recruit suppliers to these same industries.
According to the Report, another possible
strategy for attracting new business development on the coast entails the
creation of a new enterprise development program. If implemented on a
subregional scale, such a program could encourage coastal residents from
Pacifica to Half Moon Bay to start new businesses, particularly those that are
commuting to jobs outside the subregion, and attract individuals residing
outside the area to move to the Coastside and start a new business.
San Mateo County's Economic Development
Association (SAMCEDA) could integrate elements of a Coastside business
development program into future Countywide economic development strategies.
With active support from SAMCEDA staff and its membership, the program could
stimulate business development on the Coastside, and promote a better balance
between jobs and housing both within the subregion and throughout the County.
BALANCING NEW BUSINESS DEVELOPMENT WITH
OTHER SECTORS OF THE ECONOMY
With limited amounts of developable land,
water, and transportation capacity, communities within the subregion will need
to evaluate the revenue generating potential of various land use scenarios to
identify the most desirable mix of commercial, industrial, and visitor-serving
development.
Half Moon Bay
At the same time Half Moon Bay considers
the business development strategy outlined above, commercial visitor serving
development remains a high priority as demonstrated by the 500-plus units of
proposed hotel development already approved, under construction or in various
stages of the approval process. Today, Half Moon Bay enjoys a vibrant
visitor-serving economy that generates a substantial revenue stream from
Transit Occupancy Taxes and sales taxes. While the planned expansion of the
visitor-serving sector will generate additional revenue, concerns with
increasing levels of congestion have motivated the City to also consider the
research, entertainment, and communication sectors of the regional economy for
future job-creating land uses.
Pacifica
The City of Pacifica recently adopted an
economic development plan and strategy that identifies the visitor serving
economy as the sector with the highest potential for growth.66 In partnership
with the Pacifica Chamber of Commerce and local environmental groups, the City
has created an economic development strategy based on protection and use of the
natural assets to attract visitors to the area. The plan and strategy is based
in the belief that the natural environment is Pacifica's greatest asset for
attracting visitors to the City and that the potential for increased revenue
from Transit Occupancy Taxes and sales taxes is very high. Applying
"Sustainable Development Principles" to economic development,
Pacifica is using the theme "Our ecology is our economy." This is
based on the notion that providing visitors with a wilderness experience will
be the cornerstone of an economy that relies on revenues generated from
lodging, dining, shopping and entertainment.
While commercial business growth and the
creation of high quality local jobs is desirable, Pacifica must be assured that
there will be a net gain in local revenue given the costs associated with
providing required services to those businesses. In addition to concern for the
revenue capacity of job/business development, there is a limit to the total
amount of commercial development that can be constructed in the City. Limits on
the amount of developable land and transportation capacity will require
Pacifica to carefully weigh the economic benefits of future commercial business
development.
Midcoast
The Midcoast faces challenges similar to
Half Moon Bay and Pacifica including increasing congestion and a lack of
commercial development that could provide suitable jobs for its professional
residents. However, like other areas in the subregion, the Midcoast has
significant natural assets that will continue to be an attraction for visitors.
Further development of the visitor serving economy has the potential to
generate significant new revenue in the area.67
To determine the feasibility of
incorporating or annexing to Half Moon Bay, San Mateo County planners have
recently completed a study for the Midcoast that includes an analysis
identifying the most likely land uses with revenue generating potential. The
study also evaluates possible options for locating those uses in the Midcoast.
Data from the study will be useful as the Midcoast reviews its land use and
zoning ordinances to determine the feasibility and desirability of locating
additional visitor serving, commercial, and industrial facilities in the area.
CONSTRAINTS ON COASTSIDE NEW BUSINESS
DEVELOPMENT
Land
One of the potential constraints on the
comprehensive implementation of the new business development strategy on the
Coastside is the possible lack of sites at which new or expanding office and
light manufacturing businesses could locate. For example, within Half Moon Bay,
current land use designations on much of the available vacant land are highly
restrictive and only allow for commercial visitor-serving or residential uses.
With much of the City's future development capacity located west of Highway 1
at North Wavecrest, very few sites are currently zoned to allow for non-coastal
dependent commercial uses.
Similar constraints may also exist along
the Midcoast and in Pacifica where limited amounts of vacant land are presently
zoned for non-coastal dependent commercial and industrial uses. As in Half Moon
Bay, obtaining required coastal development permit approval for a non-coastal
dependent business development in the Midcoast or Pacifica may require
amendments to their respective land use and/or zoning ordinances.
Nonetheless, in the Midcoast potential
sites for development of commercial office and industrial facilities can be
found in the Princeton Harbor area and west of the Half Moon Bay Airport where
land zoned for general industrial uses is located. Additional areas currently
designated for neighborhood commercial or commercial recreation uses might
accommodate commercial office development as well.
In Pacifica, in addition to existing areas
currently designated for commercial and industrial uses, other potential
opportunities for locating major new commercial or light industrial facilities
can be found at the Rockaway Quarry Redevelopment Area, at Mori Point and at
Gypsy Hill where a major high tech research and development facility is
currently being considered. Several vacant commercial sites in Pacifica
including Pedro Point, Pacific Manor, Palmetto Avenue and elsewhere, could also
be evaluated for their potential viability as future sites for job-creating
land uses.
Transportation Capacity
Between 1995 and 1996, San Mateo County
experienced a 125 percent increase in congestion, a rate more than double any
other county in the Bay Area.68 Segments of Highways 1 and 92-the only two
highways providing access into and out of the subregion-are currently operating
at the lowest level of service during peak commute times. Levels of congestion
on the Coastside are projected to get even worse over the next 20 year period
regardless of planned investments in county highway and transit systems.69
Based on Coastside housing data from the
County's draft Congestion Management Plan, under local coastal programs, the
subregion contains a surplus of nearly 4,800 potential housing units above the
number of units that would be needed to accommodate projected job growth
through the year 2010.70 If every one of these potential housing units is built
in the subregion, the limited amount of road capacity available for commercial
office and visitor-serving development will be reduced even further.
Water and Sewer Utilities
The subregion's lack of adequate water and
sewer utilities to serve growing populations has placed a major constraint on
residential and commercial development, particularly in Half Moon Bay and the
Midcoast, and may continue to slow rates of growth in the future.
In Half Moon Bay a lack of sewer capacity
beginning in early 1990s necessitated the implementation of a moratorium on
additional sewer hookups to serve new commercial and residential development
until additional capacity became available. However, in anticipation of
additional capacity becoming available with the scheduled completion of a
expanded water treatment plant later this year, applications for residential
and commercial projects are currently being accepted for processing and
possible approval once the plant is operating. Nonetheless, the uncertain
availability of future water supplies necessary to serve projected levels of
development may place additional constraints on future growth.
In the Midcoast, lack of adequate water
supplies necessary to serve new residential development in Moss Beach and
Montara has slowed housing construction and forced homebuilders to obtain water
through on-site water wells. Currently, no water capacity is available for new
commercial or industrial development in the area. In the El Granada and
Princeton areas, adequate water capacity is available to serve the level of
development planned for the area and supplies to serve priority commercial and
industrial development have been held in reserve and are currently available.71
Limited sewer capacity in the Midcoast has also slowed development although the
planned expansion of the water treatment plant serving the area is expected to
provide the capacity needed to serve future development.
In Pacifica, the current construction of a
new wastewater treatment plant scheduled to be complete by 1999 will provide
the necessary sewer capacity to accommodate future demand. Together with an
adequate water supply, Pacifica will not have to confront the kinds of
uncertainties with their water and sewer services that may continue to plague
other communities in the subregion.
Remote/Satellite Office Development
Based on interviews with facility
directors and transportation program managers at several large Bayside firms,
the feasibility of luring a large high tech firm to invest in a Coastside
satellite office or telecommuting facility appears to be very limited for the
foreseeable future.72 However, the Half Moon Bay Report does confirm the
potential for attracting small to medium-sized start-up firms to the area.
California Coastal Act
The California Coastal Act poses a
potentially significant constraint on an economic development strategy that
requires changes to existing land use policies to achieve a better balance
between land zoned for visitor-serving and residential uses and commercial
office development. Coastal Act policies do not give non-coastal dependent
commercial or industrial land uses in the Coastal Zone priority over
coastal-dependent visitor-serving commercial and industrial uses. Because the
entire City of Half Moon Bay, the Midcoast and all land west of Highway 1 in
Pacifica falls within the Coastal Zone, any attempts to replace land currently
designated for priority coastal-dependent uses with non-priority commercial or
industrial uses must be carefully considered for consistency with state Coastal
Act and local coastal program policies.
Market Demand
The lack of market demand for
commercial office space within the subregion has historically been a deterrent
to business development on the Coastside and may pose another significant
obstacle to the successful implementation of the economic development strategy
suggested in the Half Moon Bay Report. However, the abundance of businesses in
San Mateo County and adjacent counties (San Francisco, Santa Clara, Santa Cruz)
that could be located on the Coastside might provide the basis for a successful
new enterprise development program. Establishing such a program could encourage
local residents to start new businesses or expand existing ones and attract
individuals residing outside the area to move to the coast and start a new
business.
REVIEW OF COMMERCIAL LAND USE AND
ZONING REGULATIONS
In response to the current land use and
zoning constraints in Half Moon Bay, the Report recommends a review of the
City's land use policies in an effort to achieve a better balance between land
zoned for commercial visitor-serving and residential uses and basic-sector
business development opportunities. In making preparations for the upcoming
review of their general/coastal plan, elected officials, planners and community
leaders are currently in the process of reviewing the City's land use plan,
zoning ordinances and associated maps to identify potential areas where
commercial and industrial facilities could be located. If the Midcoast and
Pacifica determine that facilitating the development of additional commercial
and industrial facilities is desired, then a review of their respective land
use policies, zoning ordinances and maps may also be needed.
CONCLUSION
The Half Moon Bay Economic and Business
Development Strategy Report provides the Coastside subregion with a starting
point from which to pursue future economic development strategies. Although the
Half Moon Bay strategy focuses specifically on opportunities and constraints
within its own economy, similar opportunities and constraints emerge when the
strategy is applied to the Midcoast and Pacifica.
The creation of a new enterprise
development program implemented on a subregional level could attract
individuals residing outside the area to move to the Coastside and start a new
business and encourage coastal residents to start new businesses, particularly
those that are commuting to jobs outside the subregion. San Mateo County's
Economic Development Association (SAMCEDA) could integrate elements of a
Coastside business development program into future Countywide economic
development strategies.
Careful analysis of an economic
development strategy that relies upon increased commercial business expansion
and job creation will need to be performed to insure the goal of increased
revenues for Coastside cities can be achieved. Consideration must also be made
for the Coastside's carrying capacity, or ability to accommodate growth and
development within limits defined by the subregion's natural resource
capabilities. While the indirect impacts of job development can be beneficial
to local government through increased property taxes and local spending,
improving the jobs-housing balance of the subregion would also have a positive
impact on traffic congestion.
At the same time, businesses attracted to
the subregion may or may not have a significant impact on local revenue.
Businesses that do not generate sales tax revenue or that fail to appreciably
increase local spending may not create a net increase in local revenue.
Property tax increases will result from business development, but they may be
offset by increased costs for services provided by local government.
Ultimately, a detailed analysis of the revenue generating capacity of the
proposed business development strategy outlined in the Half Moon Bay Report may
be a necessary as the subregion considers future economic development
strategies.
Information from the
Incorporation/Annexation Fiscal Study will be useful as the Midcoast evaluates
potential options for gaining control of future land use decisions. If the
amount of housing currently allowed by the County's coastal plan is eventually
built in the Midcoast, options to pursue the economic development strategy
proposed in the Half Moon Bay Report may be eliminated due to inadequate
infrastructure.
Future residential development planned for
the subregion is projected to increase congestion and will reduce the amount of
road capacity available for other land uses. Half Moon Bay's current General
Plan review and update process might provide an appropriate model for
application on a subregional level. Changing land use policies to balance job
and housing growth and foster a mix of commercial, industrial, and visitor
serving development has the potential to stimulate the local economy, reduce
commuter traffic, and allow the Coastside to grow into a healthy and
sustainable community.
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