CED Committee:  8/27/07 Item:  b

COMMUNITY & ECONOMIC  HARRY S. MAVROGENES DEVELOPMENT COMMITTEE  EXECUTIVE DIRECTOR 

SEE BELOW  AUGUST 10, 2007

SUBJECT:  DOWNTOWN BUSINESS STRATEGY: PRESENTATION OVERVIEW 

Retail and office developments are key components of Downtown’s revitalization. At the Committee’s meeting on August 27, 2007, Redevelopment Agency staff will make a presentation on how the Agency is working to increase Downtown business vitality through specific recruitment and retention efforts.

Topics to be addressed include:

• Overview of Downtown Retail Strategy • Update on Downtown Office Recruitment Program • Overview of the new Merchant Retention and Sustainability Program • Update on Sign Grant Program • Overview of Sidewalk Café Program 

HARRY S. MAVROGENES Executive Director

Downtown San Jose Office And

Retail Strategy Update

Total Square Footage 8,206,918 Total Occupied 6,929,922

Class B&C Vacancy 774,805 Class A Vacancy : 502,191

Remaining Class A spaces are small suites Primary opportunity to impact vacancy rate is to support the occupancy of B and C space

Profile of Prospective Tenant -.-.--

Located in the region Growing company Seeking more amenities and prestige Parking is the perceived issue deterring location Downtown

s-

used to encourage location

Parking incentive packages Start Up &Tech 10 free spaces program New Start Up &Tech 50% discount program Bulk Purchase 25% discount program

Enterprise Zone

Equipment Credits

STI (Special Tenant Improvement Program) Facilitating permits for Tenant Improvements

Incentives used to encourage location

First example is Xactly Corp Look for amendment coming soon

Knowledgeable support to tenant and brokerage community

SQ Feet # Employees Projected To Grow To

McGrath/Power

Hood and Strong

McClatchy Interactive 14,650

--

Complete Sitefinder website and support materials Promote Downtown directly to the target tenant Continued broker outreach

Close to 52,000 sf of newly activated retail space since 3anuary 2007 to date Over 200 new jobs created

BEAUIY SUPPLI'

14 new retailers coming soon - newly signed leases or under construction Close to 60,000 sf of future new and activated retail Qver 300 new jobs expected

I>AY ii'A X SALr)N

owntown Retail Strategy Goals

Create a vibrant retail district with a broad tenant mix Focus on underrepresented tenants

n San Jose Trade Area

Broker and landlord outreach Participate in retail oriented events (i.e. ICSC, ULI, CDA & others) Economic Development Systems consulting services Retail stakeholder events (San Jose Retail Round Up) Data research (i.e. Buxton) Targeted mailings

Residents' feedback

rove Existing Inventory

Many retailers seek quality, new retail space A number of Downtown sites require extensive improvements to meet the needs of these retailers

CIM Tower 88 at Central Place - 32,000 sf (Phase I)and 25,000-tsf (Phase 11) Unreinforced Masonry Projects (Wilcox Block, Porter Stock, Fountain Alley, Bassler-Hayes) - 26,000 sf combined 360 Residences - 11,000 sf City Front Square (Block 8) - 28,000 sf

Mixed-Use Developments

Purpose: To ensure that maximum opportunity and flexibility exists for retail uses that can act~vate the base of new m~xed-use

Guidelines include recommendations for: - Ceiling Heights - Floor Structure

- ServicingITrash

- Sidewalks

Collaborative, multi-department Take retail - ready from concept to results Remove, reduce, shorten time, streamline and facilitate

Temporary Use,

Bl PubliclPrivate

gency, 9,950,4%

Future Retail

= General Plan

Design Guidelines = Building Code

Traffic Planning Grading, drainage Off-site improvements Historic Preservation Guidelines

= State Historic Preservation Code Alcoholic Beverage Code

= Sewer regulations, grease interceptors Health Code Elevator inspections

d ---Visioning Documents

a City Economic Development Strategy Downtown Vision 2000

First 500 Days a Downtown Retail Strategy

Downtown Working Group Small Wonders

Small Business Ambassador Project Advocate

Study: Morton's (circa 1970's Building)

Headquarters' and Architect were out-of-state All project coordinator by projec Change of use Seismic upgrade Elevator inspection failed Alternate exiting plans CUP for Alcohol sales Valet Parking

ant Downtown

Sign Grant Program Sidewalk Cafes Street Vendors Filling the Gaps

11facades completed since June 2006 46 businesses currently in the process of receiving facades An average of up to 20% increase in business reported

Historic Meat Market Building - 142 E. Santa Clara Street

23 New signs added to Downtown and Redevelopment project areas since inception of this program in May 2005 6 New signs to be installed in the next 60 days

Grant Program Survey Results

Survey feed back indicated business increased from 10- 20% for most businesses:

Don Pedro's -Dinner clientele increased 10% Family Life Chiropractic - Walk-in traffic increased Farenheit - LunchIDinner improved 10°/~-150/~ Peggy Sue's - Improved visibility @ evening from CC Park which increased business 10% Pita Pit - Evening clientele increased 10-20%

15 permits approved in FY06-07 3 permits currently pending and outreach planned to over 20 businesses

Street Vendors

5 permits currently approved Over 30 different locations under consideration as future

Phantom Galleries "Who's on First, What's on Second?"

and Private Funding Clean and Safe

Enhancements Accountability

ear PBID Budget (Proposed)

$635,000 in additional City funds

Downtown San Jose Office and

Retail Strategy Update