HomeMy WebLinkAbout12/17/2018 City Council - Regular Meeting Agenda Packet
December 14, 2018 3:44 PM City Council Regular Meeting Agenda Page1 MAYOR
Mayor Roland Velasco
COUNCIL MEMBERS
Marie Blankley
Dion Bracco
Daniel Harney
Peter Leroe-Muñoz
Fred Tovar
Cat Tucker
CITY COUNCIL
AGENDA
CITY OF GILROY
CITY COUNCIL CHAMBERS, CITY HALL
7351 ROSANNA STREET
GILROY, CA 95020
REGULAR MEETING 6:00 P.M.
MONDAY, DECEMBER 17, 2018
CITY COUNCIL PACKET MATERIALS ARE AVAILABLE ONLINE AT www.cityofgilroy.org
AGENDA CLOSING TIME IS 5:00 P.M. THE TUESDAY PRIOR TO THE MEETING
COMMENTS BY THE PUBLIC WILL BE TAKEN ON AGENDA ITEMS BEFORE ACTION IS TAKEN BY
THE CITY COUNCIL. Persons wishing to address the Coun cil are requested, but not required, to
complete a Speaker’s Card located at the entrances. Public testimony is subject to reasonable
regulations, including but not limited to time restrictions for each individual speaker. A minimum
of 12 copies of materials should be provided to the City Clerk for distribution to the Council and
Staff. Please limit your comments to 3 minutes.
In compliance with the Americans with Disabilities Act, the City will make reasonable
arrangements to ensure accessibility to this meeting. If you need special assistance to participate
in this meeting, please contact the City Clerk a minimum of 72 hours prior to the meeting at (408)
846-0204. A sound enhancement system is also available for use in the City Council Chambers.
If you challenge any planning or land use decision made at this meeting in court, you may be
limited to raising only those issues you or someone else raised at the public hearing held at this
meeting, or in written correspondence delivered to the City Council at, or prior to, the public
hearing. Please take notice that the time within which to seek judicial review of any final
administrative determination reached at this meeting is governed by Section 1094.6 of the
California Code of Civil Procedure.
A Closed Session may be called during this meeting pursuant to Government Code Section
54956.9 (d)(2) if a point has been reached where, in the opinion of the legislative body of the City
on the advice of its legal counsel, based on existing facts and circumstanc es, there is a
significant exposure to litigation against the City.
Materials related to an item on this agenda submitted to the City Council after distribution of the
agenda packet are available for public inspection with the agenda packet in the lobby o f
Administration at City Hall, 7351 Rosanna Street during normal business hours. These materials
are also available with the agenda packet on the City website at www.cityofgilroy.org subject to
Staff’s ability to post the documents before the meeting.
The City Council meets regularly on the first and third Monday of each month, at 6:00 p.m. If a
holiday, the meeting will be rescheduled to the following Monday, with the exception of the single
meeting in July which lands on the first day of the month not a holiday, Friday, Saturday or
Sunday.
City Council Regular Meeting Agenda
12/17/2018 Page2 KNOW YOUR RIGHTS UNDER THE GILROY OPEN GOVERNMENT ORDINANCE
Government's duty is to serve the public, reaching its decisions in full view of the public.
Commissions, task forces, councils and other agencies of the City exist to conduct the
people's business. This ordinance assures that deliberations are conducted before the
people and that City operations are open to the people's review.
FOR MORE INFORMATION ON YOUR RIGHTS UNDER THE OPEN
GOVERNMENT ORDINANCE, TO RECEIVE A FREE COPY OF THE ORDINANCE
OR TO REPORT A VIOLATION OF THE ORDINANCE, CONTACT THE OPEN
GOVERNMENT COMMISSION STAFF AT (408) 846-0204 or
shawna.freels@cityofgilroy.org
I. OPENING
1. Call to Order
2. Invocation
3. Roll Call
4. City Clerk's Report on Posting of the Agenda
II. Public Comment on Items Not on the Agenda
Please limit your comments to 3 minutes. (This portion of the meeting is reserved for persons
desiring to address the Council on matters not on this agenda. The law does not permit
Council action or extended discussion of any item not on the agenda except under special
circumstances. If Council action is requested, the Council may place t he matter on a future
agenda. Written material provided by public members for Council agenda item “public
comment by Members of the Public on items not on the agenda” will be limited to 10 pages in
hard copy. An unlimited amount of material may be provided electronically. (report attached)
III. CEREMONIAL
A. Official Canvass of the November 6, 2018 Municipal Election Results
City Council Regular Meeting Agenda
12/17/2018 Page3 1. Staff Report: Shawna Freels, City Clerk
2. Public Comment
3. Possible Action:
Adoption of a Resolution of the City Council of the City of Gilroy Declaring the
Acceptance of the Statement of Vote and Certification of the November 6, 2018
Municipal Election.
4. Mayor’s Presentation of Plaque to Outgoing Council Member Daniel
Harney and Council Member Farewell Remarks
5. Swearing In of Council Member’s Elect and Presentation of Certificates
of Election
6. Adjourn Sine Die to Reception
7. Return to Open Session
8. City Council Roll Call
9. Incoming Council Member’s Remarks
INTERVIEWS
Interviews for Open Seats on Boards, Commissions and Committees with Terms
Expired or Vacant as of December 31, 2018
V. NEW BUSINESS
A. Presentation of Draft Gilroy Place-Based Economic Development Strategy
by Economic & Planning Systems (EPS)
1. Staff Report: Gabriel Gonzalez, City Administrator
2. Public Comment
3. Possible Action:
Receive report.
ADJOURNMENT
MEETINGS/EVENTS(*Meeting will be webstreamed and televised)
City of Gilroy
STAFF REPORT
Agenda Item Title: Official Canvass of the November 6, 2018 Municipal Election
Results
Meeting Date: December 17, 2018
From: Gabriel Gonzalez, City Administrator
Department: City Clerk
Submitted By: Shawna Freels
Prepared By: Shawna Freels
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Customer Service ☐ Enhanced Public
Safety
RECOMMENDATION
Adoption of a Resolution of the City Council of the City of Gilroy De claring the
Acceptance of the Statement of Vote and Certification of the November 6, 2018
Municipal Election.
EXECUTIVE SUMMARY
A general municipal election was held and conducted in the City of Gilroy on Tuesday,
November 6, 2018 for the election of four members to the City Council: three full four-
year terms and one partial two-year term, as required by law and the Charter of the City.
The election was consolidated with the County and the results of the election have been
canvassed by the Registrar of Voters, and certified by the City Clerk. The Council has
before it a Resolution to accept these elections results.
BACKGROUND
Three seats on the City Council expire in December of 2018, and one seat with a term
ending in December of 2020 was vacant, requiring an election of officers during the
November general municipal election. The City consolidated election services with the
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Santa Clara County Registrar of Voters in accordance with City Charter Sections 1400
and 1402, and following all provisions of the California Elections Code with regards to
the election of candidates and municipal initiative measures. The Registrar established
twenty-five (25) voting precincts on November 6, 2018 for the purpose of holding the
municipal election and provided all election services.
The Registrar of Voters has canvassed the returns of the election and has submitted
them to the City Clerk. As elections official the City Clerk has certified the canvass of
the results of the November 6, 2018 election. The governing body is now required to
adopt a resolution reciting the fact of the election and declaring elected the persons for
whom the highest number of votes was cast for each office.
The following three candidates had the highest number of votes cast in the
canvass of returns for the office of City Council for full four year terms:
MARIE BLANKLEY, DION BRACCO, and PETER LEROE-MUÑOZ
The following candidate had the highest number of votes cast in the canvass of
returns for the office of City Council for a partial two year term:
CAROL MARQUES
Elections Code Section 10263 (b) requires the governing body to meet at its usual place
of meeting no later than the next regularly scheduled meeting following presentation of
the 30-day canvass of the returns, or at a special meeting called for this purpose, to
declare the results and to install the newly elected officers.
CONCLUSION
Staff recommends the Council adopt a Resolution accepting the certification of the
November 6, 2018 election results.
Attachments:
1. Resolution 2018 Election Certification
2. CERT~ election results 2018
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1
RESOLUTION NO. 2018-XX
RESOLUTION NO. 2018-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GILROY APPROVING AND ADOPTING THE
CERTIFICATION OF THE CANVASS OF THE GENERAL
MUNICIPAL ELECTION AND DECLARING RESULTS OF
SAID ELECTION HELD IN THE CITY OF GILROY ON
NOVEMBER 6, 2018
BE IT RESOLVED, by the City Council of the City of Gilroy, California that;
WHEREAS, by order of this City Council a general municipal election was held and
conducted in the City of Gilroy on Tuesday, the 6th day of November, 2018 as required by law
and the Charter of said City as amended; and
WHEREAS, notice of said general election was duly and legally given; voting precincts
were properly established; election officers were appointed and election supplies furnished; and
in all respects the election was held and conducted, and the votes cast there at received and
canvassed, and the returns thereof made, determined and declared in time, form and manner as
required by the Charter of said City as amended and the general laws of the State providing for
and regulating municipal elections in said City; and
WHEREAS, the Registrar of Voters did conduct the canvass of the returns of said
municipal election and did count the vote by mail ballots cast thereat, pursuant to direction and
order of the City Council of the City; and
WHEREAS, said canvass was duly completed and the results thereof were certified by
the City Clerk and submitted to this Council.
NOW, THEREFORE, IT IS HEREBY RESOLVED AND ORDERED, as follows:
1. Said municipal election was held and conducted in the City of Gilroy, County of Santa
Clara, State of California on Tuesday, November 6, 2018 in the time and in the form and manner
as required by law.
2. That there were established twenty-five (25) voting precincts for the purpose of
3.A.a
Packet Pg. 6 Attachment: Resolution 2018 Election Certification (1941 : Certification of Election Results)
2
RESOLUTION NO. 2018-XX
holding said municipal election consisting of either regular election precincts established for
holding state or county elections, or a consolidation of some or all of such precincts, as follows:
CONSOLIDATED PRECINCT NO. 3951, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3952, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3953, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3954, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3955, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3956, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors
CONSOLIDATED PRECINCT NO. 3957, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors
CONSOLIDATED PRECINCT NO. 3958, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3959, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3960, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3962, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3964, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3965, comprising state and county precincts
3.A.a
Packet Pg. 7 Attachment: Resolution 2018 Election Certification (1941 : Certification of Election Results)
3
RESOLUTION NO. 2018-XX
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3968, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3971, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3972, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3973, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3974, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3976, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors
CONSOLIDATED PRECINCT NO. 3982, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3984, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3985, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3986, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3989, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
CONSOLIDATED PRECINCT NO. 3992, comprising state and county precincts
designated as established by the Santa Clara County Board of Supervisors.
3. The canvass of the returns of the votes cast and the counting of vote-by-mail ballots
cast in said City for the Office City Council Member was duly held by the Registrar of Voters in
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Packet Pg. 8 Attachment: Resolution 2018 Election Certification (1941 : Certification of Election Results)
4
RESOLUTION NO. 2018-XX
accordance with the order of the Council and in accordance with law, and the Registrar of Voters
has executed a certificate of the results of such canvass, which certificate is hereto attached, as
Exhibit "B" and by this reference is made a part hereof.
4. Per Elections Code Section 10262 (b), said certificate of results has been examined
by the City Clerk and has been certified by her to be complete, which certification is hereto
attached, as Exhibit "A" and by this reference is made a part hereof .
8. Said certificate has been examined and is hereby approved and adopted by this City
Council as the official canvass of said municipal election as required by Elections Code Section
10263.
9. The whole number of votes cast in the City of Gilroy at said municipal election,
including vote-by-mail votes was 17,033.
10. The names of the persons voted for, the offices for which they were voted, the
number of votes received by each of said persons in each of said precincts and by vote by mail
votes are shown on said Exhibit "B", attached hereto.
11. At said general municipal election held in the City of Gilroy held on November 6,
2018, the following persons were elected to the following offices:
Marie Blankley was elected as member of the City Council to hold office for a term of
four years, from and after Monday, December 17, 2018, and continuing until her respective
successor shall qualify.
Dion Bracco was elected as member of the City Council to hold office for a term of four
years, from and after Monday, December 17, 2018, and continuing until his respective successor
shall qualify.
Peter Leroe-Muñoz was elected as member of the City Council to hold office for a term
of four years, from and after Monday, December 17, 2018, and continuing until his respective
successor shall qualify.
Carol Marques was elected as member of the City Council to hold office for a term of two
years, from and after Monday, December 17, 2018, and continuing until her respective successor
3.A.a
Packet Pg. 9 Attachment: Resolution 2018 Election Certification (1941 : Certification of Election Results)
5
RESOLUTION NO. 2018-XX
shall qualify.
12. The City Clerk shall make out and deliver to each of the persons elected a certificate
of election, witnessed by her hand and duly authenticated. She shall also provide the
constitutional oath of office to each elected official, and ask them to subscribe thereto.
13. The City Clerk shall enter this resolution in full in the minutes of this City Council as
a statement of the result of said general municipal election.
PASSED AND ADOPTED this 17th day of December, 2018 by the following roll call
vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
APPROVED:
Roland Velasco, Mayor
ATTEST:
Shawna Freels, City Clerk
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Packet Pg. 10 Attachment: Resolution 2018 Election Certification (1941 : Certification of Election Results)
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Packet Pg. 11 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
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Packet Pg. 12 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
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Packet Pg. 13 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
3.A.b
Packet Pg. 14 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
3.A.b
Packet Pg. 15 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
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Packet Pg. 16 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
3.A.b
Packet Pg. 17 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
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Packet Pg. 18 Attachment: CERT~ election results 2018 (1941 : Certification of Election Results)
City of Gilroy
STAFF REPORT
Agenda Item Title: Interviews for Open Seats on Boards, Commissions and
Committees with Terms Expired or Vacant as of December 31,
2018
Meeting Date: December 17, 2018
From: Gabriel Gonzalez, City Administrator
Department: City Clerk
Submitted By: Shawna Freels
Prepared By: Shawna Freels
Suzanne Guzzetta
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Customer Service ☐ Enhanced Public
Safety
RECOMMENDATION
Interview candidates for open seats on Boards, Commissions and Committees with
terms expired or vacant as of December 31, 2018.
BACKGROUND
The City Council opened the annual recruitment period on October 1, 2018 for a 10-
week period ending December 4, 2018 to fill seats on 13 Boards, Commissions, and
Committees with member terms vacant or expiring as of December 31, 2018.
Additionally, seats on the Arts and Culture Commission, Community and Neighborhood
Revitalization Committee, Housing Advisory Committee, and Parks and Recreation
Commission were vacated by resignation during this time. T he City Council also
opened a recruitment for the position of City Historian on October 15, 2018.
Both recruitments were extended through December 6, 2018. At the close of the
application period, the following applications have been received:
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Packet Pg. 19
Board/Commission # of seats open # of applications
Arts & Culture Commission
1) Rev Wendy Sue Kissa
3 seats 1
Bicycle Pedestrian Commission
1) Patrick Flautt
1 seat 1
Building Board of Appeals
1 seat none
Community & Neighborhood Revitalization
Committee
1) Sally Armendariz *
5 seats 1
Historic Heritage Committee
1) Toby Echelberry
1 seat 1
Housing Advisory Committee
1) Reid Lerner *
2) Manny Singh
5 seats 2
Library Commission
1 seat none
Open Government Commission
1) Amanda Rudeen *
2) Diana Sanchez Bentz
3) Rebecca Scheel
2 seats 3
Parks & Recreation Commission
1) Marcos Gonzalez
2) Theresa Graham
3) Robert Miller
4) Manny Singh
5) Michelle Wexler
3 seats 5
Personnel Commission
1) Linda Wieck *
2 seats
1
Physically Challenged Board of Appeals
1 seat none
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Planning Commission
1) Toby Echelberry
2) Peter Fleming
3) Tim Renggli
4) Amanda Rudeen
2 seats 4
Public Art Committee
1) Federico Saldana
1 seat 1
City Historian
1 position
none
* Incumbent
CONCLUSION
For those seats without sufficient applications the recruitment efforts will remain open.
Interviews have been scheduled with the City Council at this evening’s meeting, and
appointments are scheduled to take place at the January 7, 2019 regular meeting.
Attachments:
1. Interview Applications
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Packet Pg. 21
Board/Commission # of seats
open
# of
applications
Arts & Culture Commission 3 seats 1
1) Rev Wendy Sue Kissa
Bicycle Pedestrian Commission 1 seat 1
1) Patrick Flautt
Building Board of Appeals 2 seats 0
n/a
Community & Neighborhood Revitalization
Committee
5 seats 1
1) Sally Armendariz *
Historic Heritage Committee 1 seat 1
1) Toby Echelberry
Housing Advisory Committee 5 seats 2
1) Reid Lerner *
2) Manny Singh
Library Commission 1 seat 0
n/a
Open Government Commission 2 seats 3
1) Amanda Rudeen *
2) Diana Sanchez Bentz
3) Rebecca Scheel
Parks & Recreation Commission 3 seats 5
1) Marcos Gonzalez
2) Theresa Graham
3) Robert Miller
4) Manny Singh
5) Michelle Wexler
Personnel Commission 2 seats 1
1) Linda Wieck *
Physically Challenged Board of Appeals 1 seat 0
n/a
Planning Commission 2 seats 4
1) Toby Echelberry
2) Peter Fleming
3) Tim Renggli
4) Amanda Rudeen
Public Art Committee 1 seat 1
1) Federico Saldana
4.A.a
Packet Pg. 22 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
Page 1 of 1 6/2/2018 8:00
City of Gilroy Application
for Board, Committee and Commission Appointment
Board /Committee /Commission of Interest: Arts & Culture Commission
Name: Rev Wendy Sue Kissa
Phone number(s): email address *:
Are you a registered voter within the City limits? Yes
Physical Address*
List your qualifications for this appointment:
Committee Member of Simsbury Celebrates
Girl Scout Troop Leader
Vice President & President of PEO with planning for Cultural and Educational events
There are more but these are the first things that come to mind.....
List any service to the community including any prior appointments:
Girl Scout Troop Leader (CA & CT)
Simsbury Celebrates Committee
PEO Involvement
Kiwanis
Gilroy Resident for past two years
What are your goals while serving on this Board /Commission /Committee ?:
Increase Gilroy's Involvement in the Arts
Help with the existing programing going on
Dream about the possibilities for Gilroy in the future
Why are you the most qualified to serve on this Board /Commission /Committee?
I have been involved in bringing arts to my own children and their classrooms for years. I want to see
Gilroy's involvement in the arts increase as the town continues to grow. Bringing some organization
and communication to the community.
We live on Cape Cod during the summer and I will not be available to be interviewed until after
August 7th. We live a couple of miles away from Broadway's summer home on the Cape and our
children have been involved with Broadway education classes at two of the local theaters in the area.
I am interested in helping in this area, I am wondering about the timing with our kids activities and
and family schedule but at would least like to talk about the possibility.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a-)-ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 23 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Bicycle Pedestrian Commission
Name: patrick flautt
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I have served on the board of my HOA for two years in a director capacity and have a history of
being involved with my community wherever I have lived. I'm currently employed with Facebook
and would bring a wealth of of ideas and modern approaches to the commission. I was referred
by Lionel Gonzalez for consideration of this role.
List any service to the community including any prior appointments:
This would be my first official role in city government.
What are your goals while serving on this Board/Commission/Committee?:
Goals:
1) Use social media and direct-to-citizen approaches for encouraging downtown activities aligned
with walking, biking, and other forms of general recreation.
2) Create a web portal for Gilroy as a bicycle-friendly/high walk-score downtown with the primary
goal as selling our downtown areas as bicycle/pedestrian friendly, with a side goal of encouraging
less vehicle traffic downtown.
3) Use my experiences traveling weekly along our sidewalks and thoroughfares to call out areas
needing attention and/or safety measures implemented to further align this commission's goals
with that of our infrastructure.
I would also like to continue the progress of this fine commission by weighing in on all open
considerations currently being discussed and provide my qualified opinion as someone who is
passionate about biking, scootering, and walking around our downtown areas.
Why are you the most qualified to serve on this Board/Commission/Committee?
My youth, intelligence, and commitment to outdoor extracurricular activities makes me a prime
candidate for this commission.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels@ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
11/18/2018 19:564.A.a
Packet Pg. 24 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/3/2018 15:56
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Communitv & Neighborhood Revitalization Committee
Name: AUGUSTINA Sallv ARMENDARIZ
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I HAVE BEEN ON THIS BOARD IN THE PAST. I BELIEVE IT IS VERY IMPORTANT THAT A
PERSON WHO HAS KNOWLEDGE OF THE COMMUNITY AND ITS NON PROFIT AGENCIES
BELONG TO THIS BOARD. FURTHER I BELIEVE THAT A PERSON THAT LIVES IN THE
EAST SIDE WHO CARES ABOUT ITS RESIDENCE BE THERE TO REPRESENT THEIR
INTEREST. i BELIEVE MY EXPERIENCE ALLOWS ME TO REPRESENT MY CITY IN THIS
COMMISSION
List any service to the community including any prior appointments:
CULTURAL COMMISSION, COMMISSION OF STATUS OF WOMEN, SANTA CLARA
COUNTY ELECTIONS COMMISSION, AND MANY OTHER COMMISSIONS, INCLUDING THIS
COMMISSION I AM APPLYING FOR.
What are your goals while serving on this Board/Commission/Committee?:
TO MAKE SURE THAT FUNDS ARE APPROPRIATELY DISTRIBUTED ACCORDING TO
SERVICES PROVIDED TO THE COMMUNITY IN NEED. [OR AT LEAST TRY TO].
Why are you the most qualified to serve on this Board/Commission/Committee?
AGE AND KNOWLEDGE OF THE CITY OF GILROY AND ITS RESIDENTS.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a)ci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 25 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Historic Heritage Committee
Name: Toby Echelberry
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
Prior member and Chair of the Historic Heritage Committee (2015-2017), prior history photo
journalist and researcher (mainly 1700s-early 1900s) for Southern California covering historical
reenactments, California Missions, museums, historical events and locations. A deep passion for
preserving our past for our future.
List any service to the community including any prior appointments:
prior member and Chair of the Historic Heritage Committee
current member and Chair for the Housing Advisory Committee
current Chair member of Gilroy Business and Education Committee
Vice Chair High Speed Rail Station Citizen Advisory Committee
Member of the Morgan Hill-Gilroy Community Working Group (CWG) for High Speed Rail
Member of the Gilroy-Los Banos Technical Working Group (TWG) for High Speed Rail
Member of the Gilroy Rotary Club (sit on the Scholarship Committee)
prior Finance Chair for Grant Committee for Green Mountain Coffee Roasters
prior volunteer coach for the YMCA
prior volunteer coach for Silicon Valley Flex Academy
Class of 2015 Gilroy Leadership Program
What are your goals while serving on this Board/Commission/Committee?:
To continue to preserve the history of our beloved city, to share and be a part of the creation and
documentation of our present for our future generations.
Why are you the most qualified to serve on this Board/Commission/Committee?
I am brining a continued passion of support for growth and development of our city. I have been
volunteering since 2011 and have more to give in order to build a better community not only for
our children but hopefully our children's children.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels@ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
11/11/2018 12:174.A.a
Packet Pg. 26 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/3/2018 14:52
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Reid Lerner
Phone number(s):
Housing Advisory Committee
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
Vice -Chair / Gilroy Housing Advisory Committee 2017-2018
Architect
Interior Designer
Experience working on this Committee
List any service to the community including any prior appointments:
Past President / Gilroy Downtown Business Association
Founding Board Member / Gilroy Arts Alliance
Founding Board Member / Gilroy Center for the Arts
What are your goals while serving on this Board/Commission/Committee?:
Improve the quality and safety of housing in Gilroy.
Preserve and enhance the quality and beauty of the natural environment.
Why are you the most qualified to serve on this Board/Commission/Committee?
Architect
Interior Designer
Experience working on this Committee
University degree in Architecture studying housing and planning.
AII Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a)ci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 27 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/6/2018 16:35
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: MANNY SINGH
Phone number(s):
Housing Advisory Committee
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
List your qualifications for this appointment: *Bachelors Degree; Business, Concentration in
Finance. San Jose State University 2008. *Small business owner (multiple businesses),
responsible for direct oversight of $35 million in revenue. *Direct management of over 110
employees.
List any service to the community including any prior appointments:
No prior appointments in city commissions. *1 am heavily involved through our Temple (Sikh
Temple San Jose CA) in direct community related services. Such as: Food drive, Blanket drive,
community relations, youth relations. One notable initiative that I personally spear headed was
the procurement of a truck load of goods (food, water, clothing, and daily living essentials)
donated through our community to help those of the 2017 Santa Rosa area fires. *Donating &
sponsoring of multiple community beneficial programs. Such as Relay for life, Autism Golf
Tournament, school based events where my children attend. *Multiple Wrestling Club
sponsorships. *Member of Elks Lodge Gilroy CA.
What are your goals while serving on this Board/Commission/Committee?:
My goal serving on this commission is to continue improving the already excellent job the prior
commissions have done for the community of Gilroy. I would like Gilroy to be the community in
which families can safely live & enjoy local there community for generations to come.
Why are you the most qualified to serve on this Board/Commission/Committee?
I am most qualified to serve on this board because of few key reasons. 1. 1 am directly affected
by the success of this commission as my children daily utilize the facilities this commission is in
charge of. 2. 1 successfully own & operate multiple small businesses. I have a great combination
of skills and experiences such as; personnel management, Fiscal Management, facilities
management, negotiations, and most importantly working as a TEAM. 3. My experiences with our
Sikh Temple in helping the Santa Clara County community will help me excel in this position with
community of Gilroy. 4. 1 genuinely want to make a difference in our community. One step at a
time.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a)ci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 28 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/3/2018 9:44
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Amanda Rudeen
Phone number(s):
Open Government Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I am currently a commissioner on the Open Government Commission.
List any service to the community including any prior appointments:
Along with Open Government, I am also a commissioner for the Arts and Culture Commission.
What are your goals while serving on this Board/Commission/Committee?:
My goal would be to continue learning about and staying current with the laws that impact public
records.
Why are you the most qualified to serve on this Board/Commission/Committee?
By being a current commissioner I have an understanding of what is required to be on this
commission.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(u)ci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 29 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
SENT VIA PDF
December 10, 2018
Shawna Freels, MMC
City Clerk of the City of Gilroy
CCAC Professional Development Director
7351 Rosanna Street
Gilroy, CA. 95020
408) 846-0204
shawna.freels@cityofgilroy.org
Dear Shawna:
I will be on vacation from December 16 through January 20, 2019 and as such will
be unavailable for the commission interviews now scheduled for December 17,
2018. If there is an alternate date or an alternate accommodation, I would
appreciate you letting me know.
Best regards,
Diana Sanchez Bentz
4.A.a
Packet Pg. 30 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Open Government Commission
Name: Diana Sanchez Bentz
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I've been a career paralegal for over 30 years in commercial financial transactions in addition to
real estate transactions and litigation. Over my career, I've had the task of responding to
discovery requests and I've had many continuing legal education hours covering a variety of
topics but in particular, FOIA and Brown Act requirements and rules. I've been trained in
document review and summarizing of same.
List any service to the community including any prior appointments:
I've been a long time Garlic Festival volunteer in a variety of positions, most recently with the
Gilroy Chamber of Commerce. Additionally, I've been on the parent clubs of each school my son
attended which included running several school fundraisers and the theater arts program. I was
a board member of the local Little League for many years and was a coach as well.
What are your goals while serving on this Board/Commission/Committee?:
I expect to fully participate as an efficient and engaged member of the commission in the
implementation of the goals of the commission. I look forward to working with other
commissioners in providing fellow citizens with greater access to information they seek with the
aim to provide transparency in the business of the City.
I am looking forward to giving back to the city in which I've grown up.
Why are you the most qualified to serve on this Board/Commission/Committee?
My career and volunteer experience will serve the commission well in providing fellow citizens
access to information and transparency. I believe I understand the goals of the Gilroy Open
Government Ordinance and am eager to implement the rules promulgated thereunder.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels@ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
12/10/2018 4:57:19 PM4.A.a
Packet Pg. 31 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
Open Government Commission – (2-year terms)
This five (5) member Commission is tasked with oversight in ensuring that citizens are provided with
greater access to information and provided with governmental transparency by advising the City
Council and staff in how to uphold Chapter 17A of the City Code, commonly known as the “Gilroy
Open Government Ordinance”. The Commission develops appropriate goals and proposes necessary
amendments, and acts as an appeal body for public records requests which are denied by staff.
Meetings are held quarterly in Chambers at City Hall.
Registered to vote in the City of Gilroy: YES
List your qualifications for this appointment:
I've been a long time Garlic Festival volunteer in a variety of positions, most recently with the Gilroy
Chamber of Commerce. Additionally, I've been on the parent clubs of each school my son attended
which included running several school fundraisers and the theater arts program. I was a board member
of the local Little League for many years and was a coach as well.
List any service to the community including any prior appointments:
I've been a long time Garlic Festival volunteer in a variety of positions, most recently with the Gilroy
Chamber of Commerce. Additionally, I've been on the parent clubs of each school my son attended
which included running several school fundraisers and the theater arts program. I was a board member
of the local Little League for many years and was a coach as well.
What are your goals while serving on this commission:
I expect to fully participate as an efficient and engaged member of the commission in the
implementation of the goals of the commission. I look forward to working with other commissioners in
providing fellow citizens with greater access to information they seek with the aim to provide
transparency in the business of the City.
I am looking forward to giving back to the city in which I've grown up.
Why are you the most qualified to serve on this commission:
My career and volunteer experience will serve the commission well in providing fellow citizens access to
information and transparency. I believe I understand the goals of the Gilroy Open Government
Ordinance and am eager to implement the rules promulgated thereunder.
4.A.a
Packet Pg. 32 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Commission and Committee App i merttl 0 2018
ay
Board /Commission/Committee of Interest: O pnj- 6:'04efOf1Ae1--1+ CO*.vv,,-r
Name: )2s-beccc•- -Sc Le- e- I
Phone numbers(s) / email address*:
Are you a registered voter within the City limits? Yes x No
Physical Address*:
List your qualifications for this appointment: Pezlk5 leecf&q be"n (C')f1.1 M sji/r oZDO016 aG
y/-'D e---i
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List
any service to the community including any prior appointments: Se&- 4bov-e j 4/.So l(.
ri /%zi&.K I/ /K c,CihGo/ CG(,l,b-s, C4 F-ic. j?/l l J ' G/c IS U
What
are your goals whine serving on this Board/Commission/Committee?: 1%
Cc/f/Gr0f}7G. c!/ a-5 1% 6;//vy/ C.r7 jC dri7iY/id $/GY7 / Gc'OdIC 60 ii/,CJ%rI G`7 iJr
H 7//OcJ (_.-oMmiSSrGY %T/lPiZ+./S U'/G9o(. ]U Tdi cc ¢ (//•eG 7OYi 0"/ //1` Why
are you the most qualified to serve on this Board/Commission/Committee?: Z / Q(,
C Xi rlt S dJ l/Y/S` L r S S tI)' CCfK s GiT9c SceCGe557' ,/ 5elt(
e i ( CL rsk/SS r l. e ' Z titicvty
Akow) he 7CrkJi/6 au 6G/eoe YQYtS /y /rJ ' e (TGr/r/'eJ{uv 7 9 TOBCP S v All
Board, Commission and Committee applications are a public record l
Mail
or email your application to: Shawna Freels, City Clerk City
of Gilroy 7351
Rosanna Street, Gilroy, CA 95020 shawna.
freels(@ci.gilrov.ca.us The
City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 33 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
11 /28/2018 16:36
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Marcos Gonzalez
Phone number(s):
Parks & Recreation Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I've worked for California Parks and Recreation
Worked for the City of Gilroy in the Parks and Recreation
At the present I work for Gilroy Unified School District as Groundskeeper/Irrigation technician for
23 years
I"ve sat on the Board of Director for the California School Employees Association (CSEA)
List any service to the community including any prior appointments:
What are your goals while serving on this Board/Commission/Committee?:
My goal is to see that all parks are safe and clean for everyone.
Why are you the most qualified to serve on this Board/Commission/Committee?
As, I mention being Board of Directors for CSEA, I know budgets, policies, and procedures.
AII Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(u)ci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 34 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
11 /28/2018 23:17
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Theresa Graham
Phone number(s):
Parks & Recreation Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I recently retired after 28 years of teaching children from elementary to middle school, in general
and special education, allowing me the opportunity to observe and listen to what interests them
and how they learn.
I would like to take what I know about children, both from teaching and from taking advantage of
my childrens and adult P & R programs since the mid 1980s and continue to keep our community
participating in activities that promote physical and social interaction with a variety of people.
List any service to the community including any prior appointments:
I volunteered in my children's schools and also coached girls softball and soccer when my girls
were younger. My entire family was also involved in the Garlic Festival.
My service was connected to the schools I taught in and involved participating and creating
student activities during the school day and after hours. For example: star gazing, teaching math
through cooking, supervising school dances and student council.
What are your goals while serving on this Board/Commission/Committee?:
I would like to see safe supervised activities for middle and high school teens as well as activities
for seniors promoting healthy, social and safe activities using our parks to meet up.
I would also like to introduce new ways to publicize these activities: using our schools to spread
the news and social media, in addition to the "Activity Guide."
Why are you the most qualified to serve on this Board/Commission/Committee?
As I move into retirement, I am also transitioning into activities that keep me active, physically
and mentally while investing in my community. I also have the time and energy to invest in
creating them.
I'm a team player and keep an open mind and actively listen to others ideas and will use these
attributes to further the Parks and Recreations agenda.
AII Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
4.A.a
Packet Pg. 35 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a)ci.ailrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 36 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/4/2018 16:22
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Robert Miller
Phone number(s):
Parks & Recreation Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I have lived in Gilroy for more than 26 years and, along with my daughter who grew up and went
through the public school system here, have extensively used City parks and taken part in
recreation programs.
My background includes extensive participation in individual and group sports and physical
fitness activities, including as a basketball and tennis player on high school and college teams, a
long-distance runner (completed 20 marathons), and a hiker.
I was a tennis instructor for three years in the County Parks and Recreation program where I
grew up in Maryland and also worked as a basketball referee in a CYO program.
I am a professor of geology at San Jose State University where I teach field classes and have
been a department chair, which has given me experience in dealing with a diverse group of
students, faculty, and administrators, and in managing budgets.
I am currently a board member for a local running club (South Valley Running Club) and
volunteer for the Mt. Madonna Challenge and other local races.
List any service to the community including any prior appointments:
Santa Teresa Soundwall Committee
Jordan Elementary School Parent Advisory Committee (1997-1998)
2020 General Plan Update Committee
Hecker Pass Corridor Specific Plan
Garlic Festival
South Valley Running Club - Board member
What are your goals while serving on this Board/Commission/Committee?:
I have a strong interest in promoting City Parks and Recreation classes. From my perspective,
the City does a good job in these areas, but it is important that we increase participation by
residents of all ages and parts of our community, and make residents more aware of recreational
opportunities. In addition to encouraging youth after -school activities, a significant goal is to
increase physical activity of adults, which is important for public health. We should also be aware
of changing recreational interests of our residents, and have the flexibility to react to these
changes. My hope is that I can help the commission meet these goals.
Why are you the most qualified to serve on this Board/Commission/Committee?
I believe that my broad background and perspective, collegiality, and sincere desire to promote
the mission of the Parks and Recreation Commission make me well qualified for this position.
All Commission, Board and Committee applications are a public record
4.A.a
Packet Pg. 37 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a)ci.ailrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 38 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/2/2018 12:54
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: MANNY SINGH
Phone number(s):
Parks & Recreation Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
Bachelors Degree; Business, Concentration in Finance. San Jose State University 2008.
Small business owner (multiple businesses), responsible for direct oversight of $35 million in
revenue.
Direct management of over 110 employees.
List any service to the community including any prior appointments:
No prior appointments in city commissions.
1 am heavily involved through our Temple (Sikh Temple San Jose CA) in direct community
related services. Such as: Food drive, Blanket drive, community relations, youth relations. One
notable initiative that I personally spear headed was the procurement of a truck load of goods
food, water, clothing, and daily living essentials) donated through ouir community to help those of
the 2017 Santa Rosa area fires.
Donating & sponsoring of multiple community beneficial programs. Such as Relay for life,
Autism Golf Tournament, school based events where my children attend.
Multiple Wrestling Club sponsorships.
Member of Elks Lodge Gilroy CA.
What are your goals while serving on this Board/Commission/Committee?:
My goal serving on this commission is to continue improving the already excellent job the prior
commissions have done for the community of Gilroy. I have 3 children that utilize local parks and
recreation activities daily, I would like to not only improve there quality of use but also improve
quality for all citizens of our community that use these facilities. I would like Gilroy to be the
community in which families can safely live & enjoy local there community for generations to
come.
Why are you the most qualified to serve on this Board/Commission/Committee?
I am most qualified to serve on this board because of few key reasons.
1. 1 am directly affected by the success of this commission as my children daily utilize the facilities
this commission is in charge of.
2. 1 successfully own & operate multiple small businesses. I have a great combination of skills
and experiences such as; personnel management, Fiscal Management, facilities management,
negotiations, and most importantly working as a TEAM.
3. My experiences with our Sikh Temple in helping the Santa Clara County community will help
me excel in this position with community of Gilroy.
4. 1 genuinely want to make a difference in our community. One step at a time.
4.A.a
Packet Pg. 39 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels d( ci.ailrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 40 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/3/2018 13:39
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Michelle Wexler
Phone number(s):
Parks & Recreation Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I am very interested in being a member of the Gilroy Parks and Recreation Commission. I
have extensive experience researching, implementing and evaluating best practice park and
recreation programming in Santa Clara County. In my current position with Santa Clara County
Public Health, I developed Santa Clara County's first Park Prescription Program and successfully
implemented a South County "Let's All go to the Park" Initiative. I am excited about the
opportunity to share my knowledge and experience if selected to be a member of the Parks and
Recreation Commission.
In addition to my experience with parks and recreational programming, I have over 25 years of
non-profit/government project management experience including strategic planning, budget
development, community engagement and program development. My expertise includes contract
management, grant writing, program evaluation and staff development and management. I have
a passion for problem solving with outstanding dedication and determination to provide the
highest quality solutions. My strong communication skills and ability to develop strong
collaborative relationships with key stakeholders and partners would make me a strong candidate
for this position.
List any service to the community including any prior appointments:
Past Santa Clara County Collaborative Board Member
In this role I coordinated the South County Binational Health Conference 3 years (2015 thru
2018) and I coordinated the South County "Let's All go to the Park" Initiative the past 2 years
2017, 2018).
Chair of the South County Nutrition and Health Committee (2014- present)
Parent volunteer with Oakwood School and the BBYO Youth Group
Participant on the City of San Jose Green Print Planning Update
What are your goals while serving on this Board/Commission/Committee?:
My goal if appointed as a Parks and Recreation Commissioner would be to ensure high quality
park and recreational opportunities for all Gilroy residents. This would entail looking at qualitative
and quantitative data; and talking with city staff, other Gilroy commissions, community groups, the
Gilroy Unified School District, Gilroy residents and the Gilroy City Council to get feedback to
make appropriate recommendations and understand priorities.
4.A.a
Packet Pg. 41 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
One of my specific interest is to enhance the relationship between health clinics in South
County and the physical activity opportunities provided by the Parks and Recreation Department
to help address Gilroy's growing rate of diabetes and chronic disease. Another interest I have is
to ensure residents are made aware of the many Gilroy parks and trails by ensuring appropriate
wayfinding signage and working with the Bicycle and Pedestrian Commission to ensure there are
safe routes for families to walk and bike to Gilroy parks.
Why are you the most qualified to serve on this Board/Commission/Committee?
As a newcomer to Gilroy, I feel I would bring a fresh perspective and new ideas to the
Commission. My extensive experience implementing park and recreation initiatives, my strong
analytical skills, experience developing and implementing community plans, and knowledge of
government operations would make me an ideal candidate for the Parks and Recreation
Commission. I am very familiar with park and recreation trends and resources which I feel would
be beneficial to the City of Gilroy. I am excited for the opportunity to serve as a Parks and
Recreation Commissioner and to use my skills and talents in the community I now call home.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(cDci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 42 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Personnel Commission
Name: Linda Wieck
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
Have worked in the Human Resources field for over 30 years.
List any service to the community including any prior appointments:
Current Personnel Commissioner
Founder of the Gilroy Police Foundation and Board Vice President
Community Foundation of Morgan Hill (prior board member)
What are your goals while serving on this Board/Commission/Committee?:
To lend my expertise to the HR needs of the City.
Why are you the most qualified to serve on this Board/Commission/Committee?
Current commissioner
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels@ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
11/13/2018 12:124.A.a
Packet Pg. 43 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Planning Commission
Name: Toby Echelberry
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
11 years of volunteering in our community to include being not only a member but Chair or Vice-
Chair for the Housing Advisory Committee, Historic Heritage Committee, and the High Speed Rail
Station Advisory Committee. I am also a member of the Class of 2015 Gilroy Leadership
Program. My career background is mainly finance for over 20 years, but have been placed in
charge of supply chain operations, manufacturing plant operations, inventory management
systems, warehouse and logistics.
List any service to the community including any prior appointments:
prior member and Chair of the Historic Heritage Committee
current member and Chair for the Housing Advisory Committee
current Chair member of Gilroy Business and Education Committee
Vice Chair High Speed Rail Station Citizen Advisory Committee
Member of the Morgan Hill-Gilroy Community Working Group (CWG) for High Speed Rail
Member of the Gilroy-Los Banos Technical Working Group (TWG) for High Speed Rail
Member of the Gilroy Rotary Club (sit on the Scholarship Committee)
prior Finance Chair for Grant Committee for Green Mountain Coffee Roasters
prior volunteer coach for the YMCA
prior volunteer coach for Silicon Valley Flex Academy
Class of 2015 Gilroy Leadership Program
What are your goals while serving on this Board/Commission/Committee?:
To be a part of building a better and stringer community. I have served on the HAC for many
years involved with the low income housing as well as homeless issues. I also have served on
the HHC and feel the experiences I have incurred will only increase the overall goal of a smart
growth for our community.
Why are you the most qualified to serve on this Board/Commission/Committee?
I am brining a continued passion of support for growth and development of our city. I have been
volunteering since 2011 and have more to give in order to build a better community not only for
our children but hopefully our children's children.
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels@ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
11/11/2018 12:264.A.a
Packet Pg. 44 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest: Planning Commission
Name: Peter Fleming
Phone number(s): email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I have a great understanding of community issues. Being a local business person I have the
ability to speak well with others and listen open mindedly.
List any service to the community including any prior appointments:
Gilroy Exchange Club
Gilroy Chamber of Commerce
Downtown Economic Veasibilty commitee
What are your goals while serving on this Board/Commission/Committee?:
To aid in the regulation and growth planning for the city of Gilroy. To review and advice the
council in the highest and best decisions for our city.
Make decisions openly and honestly Walk today
Why are you the most qualified to serve on this Board/Commission/Committee?
Local and top realtor with knowledge and understanding of the growth and needs of our
community. I will work hard to advise for the good of our city
All Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels@ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
8/10/2018 12:144.A.a
Packet Pg. 45 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
12/3/2018 14:34
City of Gilroy Application
for Board, Committee and Commission Appointment
Board/Committee/Commission of Interest
Name: Tim Renqqli
Phone number(s):
Planning Commission
email address*:
Are you a registered voter within the City limits? Yes
Physical Address*:
List your qualifications for this appointment:
I very am interested in the direction that future developments are headed in the City of Gilroy and
I want to be part of the process. I was a general contractor for 5 years so I feel that I have an eye
for what a good development should look like.
List any service to the community including any prior appointments:
The closest I have come to community service so far in Gilroy has been my unsuccessful run for
City Council. That being said we all need to start somewhere and I am hoping that I am qualified
enough to serve on the Planning Commission.
What are your goals while serving on this Board/Commission/Committee?:
My goals while serving the planning commission are.
1. To serve my community and the City of Gilroy.
2. To help give direction to the City Council and Mayor to make decisions on planning in the City
of Gilroy.
3. To be part of the process in regards to development in the City.
4. To help continue the re -development of the historic downtown, as this was my main platform
for my City Council campaign.
Why are you the most qualified to serve on this Board/Commission/Committee?
What I did learn from my failed City Council campaign is that I still want to be part of the process
and not just stand on the sidelines. I feel that the next logical step for me is to sign up for the city
planning commission and serve my city in that capacity. Firstly, I am passionate about the
continued re -development of the historic Downtown and want to do all that I can to help facilitate
that process. I also know that future development in the city is inevitable so I believe that if we all
work together as a team we can make sure that the future is bright for the community with area
specific developments and designs.
AII Commission, Board and Committee applications are a public record
Mail or email your application to: Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a)ci.gilrov.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 46 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
Page 1 of 1 6/19/2018 1:53
City of Gilroy Application
for Board, Committee and Commission Appointment
Board /Committee /Commission of Interest: Planning Commission
Name: Amanda Rudeen
Phone number(s): email address *:
Are you a registered voter within the City limits? Yes
Physical Address *:
List your qualifications for this appointment:
I am a resident of Gilroy who has a interest in growing Gilroy's economic development. Although I do
not have any experience in planning, I have attend every City Council meeting since the end of 2017
and feel I understand what the goals of the Council are in regards to growth and trying to create
economic viability through commerce.
List any service to the community including any prior appointments:
I am currently the Chair of the Arts and Culture Commission, as well as a commissioner on the Open
Government Commission.
I believe I would be able to fulfill the responsibilities of the Planning Commission as well as my
responsibilities with the other commissions, however if I had to make a choice I really would like to
be part of the Planning Commission.
What are your goals while serving on this Board /Commission /Committee ?:
My goal is being a part of Gilroy's growth, and working with developers on what is best for Gilroy.
Gilroy is in an interesting position of being close to Silicon Valley as well as sill being part of a rural
community. I believe it's important for Gilroy to grow, but also embrace it's rural, as well as
viticultural environment. The proposed agritourist development in the Hecker Pass Specific Plan area
is something that could make Gilroy stand out, and I think it has the potential of helping economic
development as well as expanding Gilroy's image beyond just garlic.
Why are you the most qualified to serve on this Board /Commission /Committee?
I feel I am most qualified for the position because I have a genuine interest in Gilroy's future.
All Commission, Board and Committee applications are a public record
Mail or email your application to Shawna Freels, City Clerk
City of Gilroy
7351 Rosanna Street, Gilroy, CA 95020
shawna.freels(a-)-ci.gilroy.ca.us
The City of Gilroy accepts applications at any time and will keep them on file for one year.
4.A.a
Packet Pg. 47 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
C'N City of Gilroy Application
1Wfor Public Art Committee Appointment
note: applicants will be interviewed by the Arts and Culture Commission, with
recommendation to the City Council for final interview and appointment)
Name* ' A t G o C- Cc i a
Phone number(s)1 email address`
Are you a registered voter within the City limits? Yes No
Phvsical Address *:
List your qualifications for this appointment: e k2c.1 . 1/!216 ?
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What are your goals while serving on this committee and how would you contribute to
enhance the visual environment within the city and provide our residents with the
opportunity to live with Public Art? T ('V O (, k 6 1 L< e 4-0. C re,-,-f-e
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Why are you the most qualified to serve on this committee? tv (11
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All Committee applications are a public record.
Mail or email your application to: Shawna Freels, City Cleric
City of Gilroy
7351 Rosanna Street, Gilrov, CA 95020
shawna.freels((bci.ailroy.ca.us
S
The Citiy of Gilroy accepts applications at any time and will keep them on file for one year
4.A.a
Packet Pg. 48 Attachment: Interview Applications [Revision 1] (1934 : Board and Commission Interviews)
City of Gilroy
STAFF REPORT
Agenda Item Title: Presentation of Draft Gilroy Place-Based Economic Development
Strategy by Economic & Planning Systems (EPS)
Meeting Date: December 17, 2018
From: Gabriel Gonzalez, City Administrator
Department: Administration
Submitted By: Gabriel Gonzalez
Prepared By: Gabriel Gonzalez
Trevin Barber
Strategic Plan Goals
Fiscal Stability
Downtown
Revitalization
Economic
Development
Customer Service ☐ Enhanced Public
Safety
RECOMMENDATION
Receive report.
EXECUTIVE SUMMARY
The Gilroy Economic Development Corporation (GEDC) and the City of Gilroy (City)
retained Economic & Planning Systems, Inc. (EPS) to take stock of past economic
development and current general plan analysis to bring addition al perspective to the
City of Gilroy approach toward improving its competitive position for growth and
development, with an overarching goal of improving economic growth and diversity
while building its revenue base for both the short and long term.
In the analysis the consultant introduces concepts and ideas which are intended to
stimulate discussion and look at new opportunities from a non -traditional perspective.
Monday’s presentation will be an initiate high level review and there will be follow up
study sessions for further discussion.
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Packet Pg. 49
BACKGROUND
EPS has analyzed local and regional economic conditions and prevailing trends with an
eye toward formulating incentives facilitating improved capture of various economic
development opportunities, and to render guidance to the City as it approaches critical
junctures in the form of its ongoing General Plan Update.
The key purpose of the study is to evaluate available land parcels suitable for
development, specifically to prepare the sites to be “shovel ready”. To that end, EPS
has also analyzed prevailing market, property, and legislative conditions, with ensuing
recommendations taking the form of policy and technical actions that may facilitate
beneficial and sustainable development in the City over the next decade. In most cases,
it should be recognized that additional evaluation and feasibility testing is imperative
prior to adoption of recommended actions.
In addition to evaluation of land parcels, the City had EPS prepare a separate analysis
for that calls out certain sites throughout the City and considers opportunities for
facilitating highest-and-best-use development. The City identified three of the City’s
main commercial corridors: Monterey Street, First Street and Tenth Street. Highlights of
commercial opportunities include sites within the Monterey Street, First Street and
Tenth Street corridors.
NEXT STEPS
To reiterate the initial presentation is a high-level overview of the study and is not
intended to involve significant discussion. Rather, subsequent study session with
Council will be scheduled to allow Council an opportunity to discuss specifics of the
report.
Attachments:
1. Gilroy Placed-Based Economic Development Strategy
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Packet Pg. 51 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Table of Contents
1. EXECUTIVE SUMMARY ............................................................................................ 1
Purpose of Report ..................................................................................................... 1
Introduction and Overview ......................................................................................... 1
Summary of Findings ................................................................................................ 4
2. PLACED-BASED ECONOMIC DEVELOPMENT STRATEGY CONTEXT AND DISCUSSION ....................... 9
3. REGIONAL MARKET CONTEXT .................................................................................. 20
Regional and Local Real Estate Economic Attributes .................................................... 20
Summary of Market Conditions: Practical Implications for Gilroy and
Opportunity Sites .................................................................................................... 36
4. OPPORTUNITY SITES AND CORRIDORS: OPPORTUNITIES, CONSTRAINTS, AND
SUGGESTED ACTIONS .......................................................................................... 40
Overview ............................................................................................................... 40
Opportunity Sites .................................................................................................... 40
Corridors ............................................................................................................... 55
Planned Land Use Alternatives Implications ................................................................ 67
Land Needs Evaluation ............................................................................................ 78
5. RECOMMENDED INCENTIVES AND NEXT STEPS .............................................................. 80
Activate East Side Commercial/Mixed-Use Districts ..................................................... 81
Maximize Appeal of Opportunity Zone ........................................................................ 90
Pursue High Priority P3 Opportunities ........................................................................ 93
Refine and Expand Capabilities and Responsibilities of the GEDC................................... 95
Next Steps ........................................................................................................... 102
Appendices:
Appendix A: Gilroy Resident Worker and Industry Analysis
Appendix B: Gilroy Additional Market Analytics
Appendix C: Gilroy Planning Documents
Appendix D: Financial Mechanisms Detail
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Packet Pg. 52 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
List of Tables
Table 2-1 Comparison of Resident Workers and Earning by Industry ............................... 11
Table 2-2 Residual Land Value Analysis Comparison ..................................................... 14
Table 2-3 State of California Governor’s Office of Business and Economic
Development Request for Information Summary ............................................ 17
Table 3-1 Summary of Key Industrial Market Indicators ................................................ 23
Table 3-2 Industrial Vacancy ..................................................................................... 24
Table 3-3 Industrial Average Asking Lease Rate ........................................................... 25
Table 3-4 Industrial and Commercial Asking Land Sales Prices (2 pages) ........................ 27
Table 3-5 Summary of Key Office Market Indicators ..................................................... 29
Table 3-6 Office Average Asking Lease Rate ................................................................ 30
Table 3-7 Office Vacancy ........................................................................................... 31
Table 3-8 Summary of Key Retail Market Indicators ..................................................... 33
Table 3-9 Summary of Gilroy Visitation Data ............................................................... 37
Table 4-1 Opportunity Sites Summary (2 pages) .......................................................... 41
Table 4-2 Corridor Site Summary (2 pages) ................................................................ 56
Table 4-3 Illustrative Example of Net Present Value Dynamics ....................................... 76
Table 4-4 Estimated Land Needs for Employment Uses ................................................. 79
Table 5-1 Industrial Traffic Impact Fee Comparison ...................................................... 83
Table 5-2 Future Infrastructure Investments ............................................................... 86
List of Figures
Figure 3-1 Annual Sales Tax Generated by Major Group ................................................. 34
Figure 3-2 Annual Percentage of Sales Tax Revenue by Major Group ............................... 35
Figure 3-3 Gilroy Hotel Visitation Analysis .................................................................... 38
Figure 5-1 Gilroy Opportunity Zones ............................................................................ 91
Figure 5-2 Potential Gilroy Revolving Loan Fund Structure .............................................. 99
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Economic & Planning Systems, Inc. (EPS) 1 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
1. EXECUTIVE SUMMARY
Purpose of Report
The Gilroy Economic Development Corporation (GEDC) and the City of Gilroy (City) retained
Economic & Planning Systems, Inc. (EPS) to take stock of evolving market conditions, past
economic development and current General Plan analysis, and industry best practices to improve
Gilroy’s competitive position for growth and development, catalyze economic growth and
diversification, and build its revenue base.
EPS has analyzed local and regional economic conditions and prevailing trends with an eye
toward formulating incentives facilitating improved capture of various economic development
opportunities and to render guidance to the City as it approaches critical junctures in the form of
its ongoing General Plan Update (GPU). Prevailing market, property, and legislative conditions
are evaluated, with ensuing recommendations taking the form of policy and technical actions
that may facilitate beneficial and sustainable development in the City over the next decade.
Additional evaluation and feasibility testing is imperative before adoption of recommended
actions, which are intended for consideration and discussion as the City and the GEDC weigh
options going forward.
Introduction and Overview
Gilroy finds itself at a critical juncture in its growth and development. With a strategic location
between the Silicon Valley and Salinas, the City is in a good position to capture a diverse mix of
employers and development typologies.
Gilroy has an opportunity to capture select industries being pushed out of the greater San Jose
and other peripheral markets. Future opportunities in this regard will be brought about by high
speed rail (HSR), fuller development of the City’s tourism sector, the potential capture of
research and development (R&D) and advanced manufacturing in agricultural technology and
other clusters, and protection and support for the City’s coveted outlet malls. The City’s reverse
commute relative to Silicon Valley relieves the pressure to offset all new jobs with additional
housing, allowing Gilroy to leverage the San Jose-area labor force to a certain degree. While
market preferences and the “fit” of various industries with identified site zoning, size, access,
and configuration will determine the ultimate outcome, the City has the opportunity to put its
“thumb on the scale” to tip the balance in its favor where circumstances dictate.
This report evaluates how the City may more quickly attract investment to key areas with a
range of tools, techniques, and incentives. It provides a wide-ranging assessment of factors
under local control that come into play in evaluating the current trajectory of the City’s
commercial land assets and key corridors. The GEDC identified 10 major sites for study, with the
City adding the Monterey Street, First Street, and Tenth Street corridors for consideration. Two
publicly owned sites are included: the City’s undeveloped portion of the Sports Park and the
35-acre portion of Gilroy Gardens owned by the City. This initial analysis sets the context for
more detailed evaluations of development potential, development economics, and
disposition/development strategies.
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Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 2 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Previous evaluations of Gilroy’s economic development potential, including earlier analysis of
downtown dynamics produced by EPS in 2006, indicate the importance of establishing the
Downtown Core, as well as more peripheral development areas, as viable mixed-use nodes
benefitting from the inclusion of housing where appropriate. Creating a viable sense of place has
become a prevailing underpinning in terms of attracting jobs and labor force.
Recent trends in innovation park and other commercial development efforts indicate that housing
is an increasingly strategic use in economic development strategies. In the recent past, much
press has been dedicated to the diversification of single-use business parks and other
employment centers toward more dynamic mixed-use projects that reflect the preferences of
today’s labor force for work environments.1 2 3 Major business parks in California have
employed this strategy, including Hacienda Business Park in Pleasanton and Bishop Ranch in
San Ramon.4 5 Indeed, the emerging concepts behind knowledge-driven innovation centers are
now integrating residential space and amenities to achieve the placemaking attributes preferred
by today’s labor force, consumers, and residents. In addition, this mix of uses improves the
internal balance of trips to improve local circulation patterns and should be considered as part of
a solution to overcome traffic level-of-service (LOS) deficiencies constraining future development
on many vacant properties in the City.
Furthermore, prevailing development economics of housing prototypes can sometimes “carry”
job-generating uses in both horizontal (peripheral areas) and vertical (downtown) mixed-use
formats, providing additional economic horsepower to projects and thereby facilitating the
potential integration of job-generating uses.
Simultaneously, stand-alone owner-user opportunities in export-based sectors such as advanced
manufacturing (e.g., ag-tech) should continue to be pursued where more appropriate, as well as
industrial/R&D speculative development, including industrial service providers, in combination
with improved delivery of small-scale user options. By targeting and prioritizing the
accommodation of export-oriented industry, bringing outside dollars into Gilroy’s local economy,
fiscal benefits will accrue, particularly when employee wages and related spending are accounted
for, sustaining and improving service levels in the City and providing good jobs and livable
wages.
Gilroy has a protective populace opposing both outward expansion and often (like many
communities) infill intensification. The benefits of civic interest and participation
notwithstanding, these counter-veiling philosophies present a local challenge, placing significant
1 Brass, Kevin. “Outdoor Space, Modern Food Offerings Help Energize Aging Corporate Campuses.”
Urban Land. November 16, 2016. http://urbanland.uli.org/economy-markets-trends/outdoor-space-
modern-food-offerings-help-energize-aging-corporate-campuses/.
2 Fitzgerald, Jay. “Developers take steps to reinvent suburban office parks.” Boston Globe. July 27,
2014. http://www.nytimes.com/2008/05/11/realestate/11wczo.html.
3 Brenner, Elsa. “Parking Space as Living Space?” New York Times. May 11, 2008.
http://www.bostonglobe.com/business/2014/07/26/suburban-office-parks-turning-live-work-play-
development-compete-with-cities/kYJHwumXiLKU2bFvCvhBeM/story.html.
4 http://www.bishopranch.com/about/history/.
5 http://haciendabusinesspark.com/.
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Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
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emphasis on the adaptive reuse of older districts in the quest to meet GPU jobs and housing
targets. Inherent inertia must be confronted as it is difficult for property owners to sacrifice low
risk, stable cash flow from operations to reposition a site, even when potential revenues from
redevelopment are projected to be much higher. Depending on property owner appetite for risk,
façade and streetscape improvements may be more likely than substantial increases in density in
the short to medium term. This inertia may be overcome when policy, practice, and related risk
factors are effectively established; with appropriate community outreach and education, it may
be possible to see more acceptance of increased density in specific areas, which could help
achieve GPU projections and contribute to improved economic and fiscal sustainability.
Organizing for Success
Gilroy has a strong long-term competitive position on the U.S. Highway (US) 101 corridor,
providing continued opportunities to capture select industries being pushed out of the greater
San Jose and other peripheral markets.6 Future opportunities in this regard may be brought
about by HSR, fuller development of the City’s tourism sector, the potential capture of R&D and
advanced manufacturing in agricultural technology and other clusters, and in particular, the
protection and support of the City’s coveted outlet malls, an asset that relates strongly to the
City’s opportunity sites and overall prospects for weathering the shift to online sales.
Actions and policies should be enacted that move the City toward faster reaction to opportunities
involving business-to-business (B2B)/point-of-sale opportunities. This should be pursued as part
of the overarching strategy of improving medium- to long-term fiscal prospects through the
development of business parks and innovation centers. Highly sought-after firms/operations are
likely to involve owner-user transactions as opposed to leases or purchases of space from
speculative developers. Owner-users tend to place certainty of time-to-market as a leading
criterion over simple cost savings.
While market preferences and the “fit” of various industries with identified site zoning, size,
access, and configuration will determine the outcome, the City must be competitive with
neighbors such as Morgan Hill who are actively implementing a full suite of incentives and
policies. Gilroy must take an equally assertive approach to competing for new investment
through a variety of means, as discussed in Chapter 5.
Overall the most powerful incentives are those which reduce front-end cost burdens confronting
developers, including transportation-related mitigation measures. Addressing such issues, as
well as other regulatory/policy recommendations, will establish a path toward improving public-
and private-sector outcomes by reducing the real and perceived risks of development. By
rooting specific incentives in the fundamentals of real estate economics, the City has some
options in terms of taking tangible steps toward the realization of jobs and tax revenue in the
next decade.
6 Example export-based industries the City may be able to capture include high-tech manufacturing;
distribution and warehousing; information, professional, scientific, and technical services; creative
professional service; and super-regional retail.
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Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 4 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Adapting to Headwinds
As viable land remaining within the City’s Urban Growth Boundary (UGB) dwindles, proposals to
pursue development and intensification of infill areas are sometimes met with resistance.
Historically active uses such as transportation, logistics, and warehousing are increasingly
scrutinized out of concern that valuable land would be consumed for little public return in the
form of jobs and tax revenue. The City enjoys an important position in the future HSP network,
though the project is easily a decade or two from operation. In the meantime, the City is
rightfully concerned regarding mounting fiscal pressures such as looming pension obligations.
The reality of real estate fundamentals must be balanced with fiscal imperatives and a diversity
of viewpoints among its citizens.
This backdrop argues strongly for a multifaceted economic development strategy that reflects
the local economic context and embraces the sense of “place” needed to attract key labor force
segments. By doing so, the City has an opportunity to leverage its regionally advantageous
location and reputation as an amenity-rich area with a high quality of life to create an example of
sustainable development capable of attracting targeted investment and setting the context for
fiscal sustainability.
Summary of Findings
1. Gilroy enjoys strong market fundamentals but has limited options because of
inefficient land assemblies.
Both owner-user and speculative projects are moving forward. Space is tight, and lease
rates are improving, enabling investors to justify making a bet on Gilroy. Despite positive
economic metrics, the City finds itself in a difficult market position as it is often too expensive
for relatively low-technology machine shops and other small businesses, and it has yet to
capture the attention of coveted high-tech operations in the recent past. Policy incentives
that reduce risk or cost in the early phases of development have a good chance to catalyze
beneficial development. However, as discussed below, the City’s land supply is likely not
sufficient in magnitude to meet demand through the 2040 GPU horizon and is poorly
organized, making it difficult to stitch together remaining transportation improvements in a
cost-effective manner.
2. The Silicon Valley industrial base is being priced out and looking for relocation
opportunities.
Several large campus and adaptive reuse efforts occurring throughout the Silicon Valley are
changing the character and composition of legacy industrial districts, effectively pricing out a
large swath of smaller, locally owned operations, such as machine shops, metal working,
sales-service, and other activities largely in the small business realm. These cost-sensitive
users can rarely afford to pay leases tied to new construction if land values are too high, as
developer returns are not sufficient to warrant inherent risk under these conditions. The
local lack of supply in the form of built space is a factor that tends to push land prices higher.
However, Gilroy is beginning to see new speculative multitenant investment; the lease-up
performance of said projects will be a good indicator regarding the depth of this type of
demand.
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Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 5 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
3. The City is well positioned to accommodate a variety of high-value, export-oriented
industries.
Agricultural technology users may have particularly good fit in Gilroy, based on the City’s
mid-point location between the Silicon Valley and Salinas. Although a location between these
markets would seem to be an obvious advantage, this is a fast-changing emerging cluster
with many different manifestations “on the ground.” As ag-tech is a diverse sector, specific
types of operations most appropriate for and offering the most benefits to the City should be
targeted through the offering of City policy incentives, leaving operations requiring isolation,
large amounts of lay down yard, or agricultural uses to larger development opportunities
elsewhere in the greater market area.
In addition, Gilroy appears to be attractive to a range of industry support firms. Like retail
outlets, certain types of industry support firms also seek to locate on the periphery of major
metros in locations such as Gilroy. Recently a hospital services firm leased a 100,000-plus-
square-foot building in Gilroy. Other candidates include logistics and agriculture-related
service providers.
4. Housing needs to be considered on the east side of US 101.
There are a multitude of reasons to consider housing on a case-by-case basis to the east of
US 101. Beyond diversifying options for younger workers who may not be able to afford
commute costs from San Jose and other points to the north, housing provides developers
with the economic strength allowing a project to “carry” other job-producing units. Policy will
need to ensure that as a condition of allowing some housing where appropriate, related job-
generating commercial space should be encouraged to move forward simultaneously.
Past and ongoing EPS research for the State of California (State)’s Strategic Growth Council
and other entities has pointed to successful mixed-use intensification strategies using leading
infill housing and mixed-use projects as the key to unlocking job growth by attracting both
millennials and boomers. The augmentation of local housing on the east side may relieve
congestion by better balancing internal trips. Pricing would need to be sensitive to ability to
pay among key wage categories.
5. Functional commercial land supply with efficient interconnections is in short
supply.
As discussed above, there is a dearth of viable land supply for commercial (and supporting
residential) development. In the commercial realm, much of the land identified in the GPU to
accommodate employment falls into the category of “underutilized” property sometimes
having existing operations. While transformative infill development is critical to Gilroy’s
future, it is difficult to rely on such areas as a major source of capacity because of the
painstaking processes and related economics of redevelopment. In this regard, employment
density assumptions in the GPU reflect typical industry assumptions but may not be
appropriate, given the isolation of opportunity sites and the related difficulty associated with
mitigation requirements and other factors. Additional land supply filling in the gaps between
parcels should be considered with reference to transportation patterns, separation and
integration of uses is specific areas to the east of US 101, and the now-known alignment of
the HSR. A well-configured land supply with a revamped roster of use combinations is an
important goal relative to the direction of future GPU efforts.
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Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 6 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
6. A citywide effort to reduce the marginal costs of transportation improvements and
related policy (LOS) is warranted, even if planned realignment of State Route
(SR) 152 proceeds as planned.
In the case of SR 152 and Leavesley Road, new approaches to evaluating congestion are
needed. The City of Mountain View was reportedly successful in working with the Santa
Clara Valley Transportation Authority (VTA) to reduce allowable congestion levels at critical
intersections—a similar effort needs to be made in Gilroy, at least on an interim basis, while
land supply and transportation system projects are worked out over the next decade.
A significant project is in the pipeline to improve SR 152 between US 101 and SR 156. The
project is intended to include improvements to the US 101/SR 25 interchange south of
Gilroy, the SR 152/SR 156 interchange east of Gilroy, and segments of SR 152 through the
Pacheco Pass. The intent of the project is to divert regional traffic away from the severely
impacted segments of SR 152 to Gilroy. These improvements should be considered in
ongoing City traffic models to consider future off-site traffic improvements on the east side of
US 101.
7. While the First and Tenth Street corridors recommended for intensification in the
GPU are good long-term prospects, reality dictates that transformation will take
time and focus should be applied to very specific nodes.
As pertains to the intensification of corridors, as with other underutilized infill sites, the
economics of redevelopment dictate that it is very difficult for property owners to sacrifice
low risk, stable cash flow from operations to reposition a site, even when potential revenues
are relatively higher. Depending on property owner appetite for risk, facade and streetscape
improvements may be more likely than substantial reuse and redevelopment efforts, bringing
substantial density increases in the short- to medium-term, particularly on First Street to the
east of Miller Drive/Wayland Lane.
8. HSR represents a major “change agent,” influencing the planning of Monterey
Street and the Tenth Street corridor.
The existing Union Pacific (UP) alignment is the likely alignment for HSR. Now is the time to
initiate significant rethinking of Monterey Street and related laterals to position Downtown
Gilroy to capitalize on this massive future public investment.
The City should open a dialogue with the HSR Authority and UP to understand status of
undeveloped station area land. It should leverage the prospect of HSR to maximize the
intensity and density of the surrounding district, but these efforts should be accompanied by
a community education process.
9. Diversify and expand hotel and entertainment offerings, with one or more additions
to Downtown being a priority, combined with key amenities.
While the supply of business-oriented limited-service hotels is expanding, the Monterey
Street corridor and nearby cross-streets provide candidates for a diversification of the hotel
base, potentially including boutique concepts fitting well with the area’s expanding restaurant
and (potentially) entertainment base. Significant large sites on the Tenth Street corridor
may offer major opportunities for mixed-use housing/entertainment nodes with visitor
accommodation potential, as well as other sites such as the Sports Park and Gilroy Gardens.
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10. Protect and enhance the Gilroy Premium Outlets.
Gilroy has a unique and important source of sales tax geared to visitors, making this an
important component of the overall “export” economy, which also includes advanced
manufacturing, major recreational amenities, and ultimately HSR. As discussed in
Chapter 4, sites adjacent to the Gilroy Premium Outlets (Outlets) may be useful in
expanding and diversifying the visitor experience. Importantly, the retail sales tax generated
by the Outlets is a critical component of the City’s sales tax portfolio, albeit a declining one.
It is important that this trend be stabilized and reversed, as the increasingly important
distribution of online sales throughout the County of Santa Clara (County) is based on a pro-
rata formula accounting for each city’s percentage of total County receipts. The bottom line
is that any improvement in Outlet performance has a powerful compound benefit to the City’s
General Fund.
11. The City has a major opportunity to capitalize on new “Opportunity Zone”
legislation offering tax deferrals to investors.
Opportunity Zones (OZs) are a new community development program established by
Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-
income urban and rural communities nationwide. It is recommended that Gilroy “layer-in” a
broad range of supporting land uses and financing policies in its Downtown OZ in particular
to attract investment funds geared toward this opportunity. Gilroy’s strategic position and
known quality of life, combined with its relatively nascent stage in overall Downtown growth
and development offer excellent upside for these investors.
12. Up-front cost and time reductions accruing to developers are critical to improving
the development climate, assuming land markets can be stabilized.
High fees and other costs of doing business should be reduced to the extent they are under
the City’s control and the recipients offer needed community benefits. Any disadvantage in
this regard to competing jurisdictions peripheral to Silicon Valley, such as Morgan Hill, will
result in lost market share based on reduced development feasibility among owner-users and
speculative developers alike. Some key elements of this strategy are listed below:
Allocate infrastructure and public facility costs across a greater land base.
(Re)consider fee waivers and deferrals for qualifying projects.
Restore Ag mitigation in-lieu fee option.
Diversify and expand funds to augment the Transportation Impact Fund (i.e., use various
mechanisms such as tax-increment financing to fund land-secured financing districts, or
as a reimbursement mechanism for developer-constructed facilities).
Leverage existing tax streams as incentives with reimbursement from development
impact fees.
Use available tax increment as a long-term take-out source and as a source for fee
waivers/deferrals.
Use Certificates of Participation (COPs) to shorten the payback period and overall cost of
financing.
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13. A community education process is recommended to review and discuss industry
best practices.
It is difficult for the City to realize needed investment when it is constrained both in terms of
outward expansion and interior intensification. The City of Livermore recently engaged in a
series of workshops designed to educate and provide a forum for community and policy
maker discussion related to the intensification of the city’s Downtown. It is recommended
that the City embark on a similar process to provide examples of best practices in integrating
uses, creating improved land value and fiscal returns, while improving Gilroy’s economic
performance and appearance.
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this report, any action that reduces risk results in a reduced return requirement, making it easier
to afford often-overpriced land.
This strategic approach allows the stronger housing economics to carry other uses in mixed-use
format such as technical/innovation space, medical/other office space, industrial condos,
restaurants/entertainment, retail, and other uses.
A long-term sustainable economy depends on meeting several objectives simultaneously. EPS
has identified several interrelated metrics in this regard:
1. Downtown core strength. The downtown core is critical as an indicator of Gilroy’s quality
of place. It is an indicator of civic health, and we are seeing the regeneration of downtowns
in large and small towns alike. The coming HSR station cements Gilroy’s emerging role as a
regional hub as opposed to a quiet suburb. These factors support the development of
housing and urban uses. The practical limits of density and the placement of key uses such
as hotels, parking, and retail/restaurants need to be worked out through a carefully
orchestrated community process.
2. Viable labor force. Having a viable labor force is fundamental to industry growth.
Fortunately, Gilroy has a very strong asset in its well-trained workforce. Gavilan College’s
Science, Technology, Engineering, and Math (STEM) programs continue to play a key role in
this regard. However, occupational/wage analysis indicates that Gilroy’s workers are poorly
paid compared to the Silicon Valley, as shown in Table 2-1 below.7 This may indicate
participation in support/service aspects of various Silicon Valley operations, as evidenced by
the presence of several such firms in Gilroy.
As efforts to attract more employment-intensive and high-wage industries to Gilroy, major
questions arise, such as whether millennials and boomers and other cohorts will accept Gilroy
as an option to more energetic and vibrant cities to the north. Recent evidence indicates that
younger cohorts are increasingly willing to move to more suburban locations for reasons of
housing and other living expenses. Research from John Burns Real Estate Consulting
indicates that a majority of residential growth in the 2020s and 2030s will occur in suburban
cities that are able to offer urban amenities, such as plentiful restaurant, recreation, and
entertainment options, walkability, public transit, school quality, and proximity to
employment.8 A strong effort to revitalize downtown and policies intended to facilitate small-
and medium-sized business relocation and formation are key considerations in this regard.
3. Business/customer circulation and site access. A basic element of “cluster” dynamics is
businesses operate in interchangeable webs of activity related to their input and outputs.
Gilroy has an opportunity to attract elements of the ag-tech cluster, which is composed of
industries in clean energy, life sciences, production technology, information, and advanced
manufacturing. For Gilroy to compete regionally for both R&D and administrative/support
7 See Table A-1 and Table A-2 in Appendix A for additional Gilroy workforce and industry analysis.
8 Demographic Strategies for Real Estate, 2016. John Burns Real Estate Consulting.
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DRAFTTable 2-1City of GilroyPlace-Based Economic Development StrategyComparison of Resident Workers and Earnings by IndustryIndustryAmountPercent of TotalMedian Earnings AmountPercent of TotalMedian Earnings AmountPercent of TotalMedian EarningsAgriculture, forestry, fishing and hunting 1,235 4.8% $21,305 5,141 0.5% $21,810 382,801 2.2% $20,221Mining, quarrying, and oil and gas extraction 0 0.0% - 316 0.0% $72,819 32,196 0.2% $64,390Construction 2,210 8.7% $45,000 48,037 5.1% $40,901 1,055,791 6.0% $36,249Manufacturing 3,154 12.4% $49,907 167,776 17.9% $90,705 1,697,080 9.7% $44,933Wholesale trade 738 2.9% $46,739 20,051 2.1% $60,610 530,690 3.0% $40,275Retail trade 3,336 13.1% $19,123 86,488 9.2% $25,998 1,927,782 11.0% $23,066Transportation and warehousing 460 1.8% $56,806 21,297 2.3% $40,593 708,127 4.0% $37,951Utilities 292 1.1% $77,574 4,447 0.5% $86,869 136,884 0.8% $80,485Information 404 1.6% $38,457 44,062 4.7% $110,762 513,204 2.9% $62,282Finance and insurance 478 1.9% $74,853 26,646 2.8% $67,992 686,112 3.9% $57,376Real estate and rental and leasing 578 2.3% $40,975 19,061 2.0% $50,743 402,973 2.3% $40,345Professional, scientific, and technical services 1,465 5.8% $82,580 140,823 15.0% $100,963 1,436,433 8.2% $67,530Management of companies and enterprises 10 0.0% - 783 0.1% $94,440 12,759 0.1% $65,164Administrative and support and waste management services 1,170 4.6% $25,175 41,183 4.4% $27,498 848,770 4.8% $24,326Educational services 2,089 8.2% $44,250 73,379 7.8% $45,668 1,482,695 8.4% $40,481Health care and social assistance 2,979 11.7% $45,063 101,211 10.8% $44,587 2,192,193 12.5% $37,252Arts, entertainment, and recreation 459 1.8% $11,534 16,986 1.8% $22,085 470,330 2.7% $24,640Accommodation and food services 2,156 8.5% $14,424 58,803 6.3% $17,760 1,346,825 7.7% $16,946Other services, except public administration 1,121 4.4% $23,085 39,196 4.2% $24,393 938,247 5.3% $21,936Public administration 1,142 4.5% $83,935 22,859 2.4% $68,945 775,250 4.4% $61,853Total 25,476 100.0% $35,835 938,545 100.0% $51,693 17,577,142 100.0% $35,451industrySource: US Census Bureau, 2012-2016 ACS; EPS.CaliforniaSanta Clara CountyCity of GilroyPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2115.A.aPacket Pg. 64Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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functions related to the high-tech economy of the Silicon Valley, it needs a well-organized,
well-designed, easily accessible land supply. These conditions do not exist in Gilroy in its
major employment zones on the east side. Indeed, land use patterns in the area are
confusing and disorderly and constitute a major disadvantage leading to recent poor
performance even in a hot economy, as indicated by data in Chapter 3 and elsewhere in this
report. Transportation connections are missing and are not feasibly constructed because of a
lack of orderly and predictable subsequent development opportunities because of the current
irregular configuration.
Truck intensive uses need direct freeway access, while retail tenants seek safe, attractive,
and logical patterns of development with good visibility to major arterials. Visitors look for a
positive entry experience, as first impressions are critical. Connections between key sites
(e.g., from the Outlets to Downtown to Gilroy Gardens) need to be more appealing to solidify
the visitor experience. As areas such as Downtown continue to evolve and intensify, long-
term parking strategies, potentially involving public-private partnerships (P3), will become
critically important.
4. Competitive position in the region. Overall potentials are driven by the health of the
region. Fortunately, Gilroy resides on the periphery of one of the most innovative regional
economies in the world, virtually assuring that the City will always enjoy long-term structural
competitive advantages relative to other cities in California. As these issues together put a
“squeeze” on certain industries, based on increasing lease rates and insufficient expansion
opportunities, Gilroy has an opportunity to capture major market share if it can effectively
position itself. Of importance, Gilroy must simultaneously establish itself as a high quality-
of-life community, while also sending signals it is open to business innovation and willing to
offer incentives for projects delivering economic benefits.
5. Regulatory framework and local cost factors. To the extent a community is interested
in improving its competitive position, land use policies will be updated and calibrated to
accommodate market and economic conditions. This can refer both to the actual regulations
and the spirit by which the rules are carried out. Gilroy should offer a flexible and agreeable
disposition to the outside world, while taking steps to create a complete community,
anchored by the Downtown. High fees and other costs of doing business should be reduced
to the extent they are under the City’s control and the recipients offer needed community
investment. Any disadvantage in this regard to competing jurisdictions peripheral to the
Silicon Valley will result in lost market share based on reduced development feasibility among
owner-users and speculative developers alike. To the extent possible, infrastructure costs
should be distributed on a larger base than is currently possible, given the City’s land
inventory. Fee waivers and deferrals should be considered for projects that offer specific
benefits. There is an opportunity to put a relatively assertive incentive package together
relating to the OZ designation, particularly in the Downtown area, as discussed in Chapter 5.
All of the considerations cited above should be evaluated in terms of the overall risk/reward
dynamic confronting developers in Gilroy. In other words, prospects for revenue generation
need to be strong, while costs (especially those occurring at the early stages of a project) must
be contained. While there is always a degree of risk inherent in any project, the City and the
GEDC have an opportunity to lend additional certainty to the development process to improve
economic development outcomes.
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Three discussion items are provided below that inform prospects for opportunity sites and
potential incentives. Subsequently, an updated market evaluation is provided, key sites and
corridors are assessed, and suggested incentives are discussed.
Discussion: The Fiscal Aspects of Housing
California has lagged below needed production thresholds for all types of housing. Preferences
for complete communities are becoming stronger, and the regional health of the State’s local
economies depends on establishing strong urban cores. Providing both market-rate and
affordable housing in the Downtown and infill context is a major challenge that has increased in
difficulty for California cities since Redevelopment was abolished (never a tool used in Gilroy).
Moreover, cost escalation and prospects for rising interest rates, community attitudes, and other
factors continue to challenge the emergence of a variety of infill housing prototypes. Various
tools and techniques can be applied to “chip away” at the difficulty of increasing infill housing
production to improve quality of life and drive improved economic development outcomes.
While commonly seen as a fiscal drain on cities and counties, housing and mixed-use projects
serve a vital role in fiscally positive jurisdictions. Under favorable conditions, such as high value
prototypes and low municipal service requirements, housing developments can generate a net
fiscal surplus. Absent these conditions, housing remains a critical part of any city place-making
efforts. Housing units in isolation may appear to result in a net fiscal deficit, but developing said
housing in conjunction with a larger economic strategy can produce overall positive outcomes to
the extent an industry or jurisdiction becomes more economically competitiveness as a result.
Employers make location decisions based on labor force characteristics, as well as the desirability
of a community for its workforce. Fiscally positive manufacturing industries support well-paying
jobs with low barriers to entry. To attract these uses, the City must prove it can provide
desirable living conditions and draw in high-quality employees. Employee housing has an
additional benefit to the City in terms of infrastructure demand and maintenance expenditures.
Local employee housing results in shorter commute times and reduces the impact of extended
commuter trips on roadway infrastructure.
A large portion of retail sales in Gilroy result from the City’s ability to capture retail sales from
outside the City, including commuters and day and overnight travelers. New area residents will
enter into a retail market that is primed and readily capable of capturing the disposable income
of the new employed residents. Supported by trends in retail development, a strong housing
market is crucial for fiscally positive retail land uses. Combined with other proposed place-
making efforts, including improvements to key Downtown corridors, housing development could
offer significant improvements to citywide taxable sales collections.
In addition, from the standpoint of a developer, the availability of desirable housing nearby will
greatly increase the financial feasibility of a project containing other high-value uses. In the case
of a 40-acre industrial development project, replacing 10 acres of industrial development with
single-family residential uses results in a major increase in residential land values, as shown in
Table 2-2 below. This higher residual land value results in higher profit potential for developers,
greatly increasing the likelihood of B2B sales–generating land uses developing as a mixed-use
concept as opposed to a standalone development.
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DRAFTTable 2-2City of GilroyPlace-Based Economic Development StrategyResidual Land Value Analysis ComparisonItemTotal SFR MFR IndustrialAssumptionResidual Land Value per Acre [1] - $2,400,000 $700,000 $200,000Density (DU/Acre or FAR) 14.0 du/ac 65.0 du/ac 0.40 FARScenario 1: Industrial OnlyPercent Mix100%0.0% 0.0% 100.0%Acres40.00.0 0.0 40.0Residual Land Value$8,000,000$0 $0 $8,000,000Scenario 2: Mixed-Use APercent Mix100%25.0% 0.0% 75.0%Acres40.010.0 0.0 30.0Residual Land Value$30,000,000$24,000,000 $0 $6,000,000Scenario 3: Mixed-Use BPercent Mix100%12.5% 12.5% 75.0%Acres40.05.0 5.0 30.0Residual Land Value$21,500,000$12,000,000 $3,500,000 $6,000,000rlv summ[1] Product residual land values based on information from various sources, including product and land sales comparisons in the South Bay and East Bay areas.Proposed Land UsePrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2145.A.aPacket Pg. 67Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Discussion: Export-Based “Driver” Industry Job Strategy
A common strategy among communities is to seek to attract “export” industries that bring
outside wealth into the community, providing for improved per capita incomes, higher spending
levels, and other related benefits such as improved municipal revenues. However, most
communities do not enjoy strong prospects in this regard. In contrast, Gilroy finds itself in a
very strong competitive position to capture significant growth and investment in this regard
based on several unique circumstances:
HSR and Downtown. Gilroy has major strategic importance within the HSR network,
serving as a collector from the Monterey Bay Area and the Salinas Valley, major tourist and
ag-tech markets, connecting them to Silicon Valley and the Bay Area. The Downtown station
area will become the gateway to attracting statewide and regional business, related labor
force, and leisure travelers to its Downtown. Every effort should be made to finalize and set
in motion transit-oriented development (TOD) concepts in a variety of incomes and housing
prototypes throughout the Downtown to begin activating the market and the ancillary uses
(e.g., Downtown grocery, hotel, etc.) that come with a viable mixed-use package. As TOD in
Downtown matures, office development could be pursued, as a critical mass of skilled
workers resides in high-density residential developments near the HSR station, creating a
place to live, work, and play. Gilroy has an opportunity to capture professional service
industries that may be priced out of the Silicon Valley (e.g., accounting firms, engineering
firms) as tech giants (e.g., Facebook, Google, Adobe) are pushing plans to develop mega
campuses and office projects in core Silicon Valley cities.
Tourism. Gilroy has the above-referenced opportunity to build on the Monterey Region to
offer a closer-in option or component of the regional travel package. The “Gardens” area and
surrounding valley have the character needed to offer a major amenity/resort geared toward
accommodating a range of leisure- and recreationally oriented visitors, but both the project
and the surrounding area need to be programmed carefully and strategically. The area also
has the natural amenities to be a major recreational mecca (e.g., road and mountain biking,
as well as other potential activities).
Export-based manufacturing. Using the Oregon City of Hillsboro as an example, it is
possible to combine regional rail, major manufacturing, and a higher density and higher
value mix of uses as an integrated package. Quality-of-life considerations are very important
to Hillsboro’s major employers such as Nike and Intel. Similarly, Gilroy has the regional
location and small-town charm to create high-amenity/high-value districts and corridors over
time, anchored by property tax and B2B sales tax paid by certain basic export manufacturing
entities. Sectors such as farming technology may be an excellent match with local job needs
and may have good fit with certain large opportunity sites.
Basic (otherwise known as “driving” or “export”) industries include several industry clusters,
including high-tech and miscellaneous manufacturing, software and informational services,
technical professional services, creative professional services, and visitor services. These driving
industries are critical to a regional economic base because they generate product sales revenue
for a range of clients, including large-scale B2B transactions; and on the technical services side,
exports valuable technical services to public and private entities.
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In other communities EPS examined, these are often found in B2B sales transactions where a
manufacturer is also a point of sale to another business. This has specifically been found to be a
major source of municipal revenue for cities such as Davis, which have had the good fortune to
capture such entities, partly based on the city’s quality of life and the labor force advantages
related to an easy counter commute from several adjoining cities, because Davis, like Gilroy, is
very growth-adverse.
In Gilroy, large sites of land will be necessary to accommodate these types of industries.
As evidenced by major project inquiries received from the Governor’s Office of Business and
Economic Development (GO-Biz), typical size requirements are from 25 acres to more than
200 acres, as shown in Table 2-3. Economic development programs from other states promote
a Certified Sites Program, which provides statewide inventories of industrial sites that have
undergone rigorous prequalification processes to ensure sites are shovel-ready for immediate
development. While California does not have great numbers of these programs, it is worth noting
the criteria listed by the Tulare County Economic Development Corporation in this regard:
1. Ten or more developable acres.
2. Property boundary survey.
3. Willing seller with set asking price.
4. All utilities (water, sewer, electric power, telecommunication) at the site (or within 500ft).
5. Proven alignment with a local city, town, or county and letter or commitment from this body.
6. Topographic maps (5’ contours minimum).
7. No environmental liabilities (documentation regarding Phase I ESA; Clean Water Act;
100-year assured water supply: endangered species reviews; geotechnical report; air quality
designation).
8. Outside known flood-prone areas or remediation complete.
9. Permitting process, timeline, and fees clearly documented.
10. Public, dedicated road access.
11. Industrial/office (no retail) zoning or expedited rezoning plan.9
12. Site physically toured and reviewed and report of comprehensive site information.
9 It should be noted the zoning aspect of this criterion may not be relevant or desirable because of
evolving user preferences and local context.
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DRAFTTable 2-3City of GilroyPlace-Based Economic Development StrategyState of California Governor's Office of Business and Economic Development Request for Information (RFI) SummaryItemDescriptionManufac. Warehouse Office TotalProject 1Phase I250 380,000 100,000 20,000500,000375 $250,000,000- - - - - Phase II150 845,000 110,000 45,000 1,000,000 1,625 $300,000,000- - - - - TotalAdvanced manufacturing400 1,225,000 210,000 65,0001,500,000 2,000 $550,000,00045 miles Adjacent N/A Yes 30 ft. N/A Project 2Consumer paper product designer/distributorN/A 0 27,000 3,00030,00031 $6,000,000 20 miles 10 miles 200 miles No 24 ft. N/A Project 3Manufacturer20 N/A N/A N/A 385,000115 $30,000,000N/A 20 miles N/A N/A 30 ft. 450Project 4Min13 662,000 33,000 55,000750,000920 $25,000,000 20 miles 5 miles 30 miles N/A 27 ft. 400Max Solar panel manufacturer24 1,312,000 33,000 55,0001,400,0001,266 $280,000,000 20 miles 5 miles 30 miles N/A 27 ft. 1,000Project 5Electric vehicle sales/distribution50 5,000 3,0008,00010N/A 20 miles 5 miles 10-20 miles No 20 ft. 50Project 6Phase 1N/A 0 75,000 25,000 100,000100N/A - - - - - Phase 2N/A 0 75,000 25,000 100,000100N/A - - - - - TotalElectric truck/bus manufacturerN/A 0 150,000 50,000 200,000200N/A 50 miles 50 miles N/A No 19 ft. N/A Project 7Solar panel manufacturerN/A 0 265,000 0265,000600 $120,000,000N/A N/A "Close" N/A 22 ft. N/A Project 8Scenario 1 Solar panel manufacturer150 N/A N/A N/A N/A 2,100 $1,300,000,000- - - - - - Scenario 2 Solar ingot and solar wafer manfac.250 N/A N/A N/A N/A 3,500 $1,900,000,000- - - - - - CombinedCombined400N/A N/A N/A N/A 5,600 $3,200,000,000N/A Adjacent N/A N/A N/A N/A Project 9Distribution facility5 125,0000 0125,000150N/A N/A N/A N/A N/A 30 ft. 120gobizSource: California Governor's Office of Business and Economic Development; Cushman & Wakefield.[1] Project 4 manufacturing consists of the following components: Minimum: 442,000 square feet production and 220,000 square feet clean room. In addition, requires approximately 6,500 square feet for a laboratory. Maximum: 822,000 square feet production and 490,000 square feet clean room. In addition, requires approximately 6,500 square feet for a laboratory.ParkingSpacesFacility Size (Sq. Ft.)Minimum Site AcreageEstimatedNo. ofEmployeesEstimatedInvestmentOther RequirementsDistance toCom'l AirportDistance toInterstateDistance toDeep WaterPortFreight RailServiceMini. Bldg.CeilingHeightPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2175.A.aPacket Pg. 70Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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These criteria provide a good overall summary of attractive attributes from an investor
standpoint.
Creation of Non-Retail Sales and Use Tax through Export-Based Development
Industrial manufacturing businesses can result in significant taxable sales generation for a city.
B2B sales, including sales such as those involving a manufacturer and wholesaler or a wholesaler
and a retailer, are a largely untapped source of taxable sales generation in the City. The City is
uniquely positioned to capitalize on this market because of their readily available labor force and
proximity to San Jose and the greater Silicon Valley. Across the State, only 70 percent of all
taxable sales are made up of retail sales, with 30 percent composed of B2B and other taxable
sales categories. For Gilroy, the percentage of taxable sales resulting from non-retail purchases
drops to 10 percent.10 This is a result of high retail capture rates in the City and a lack of
manufacturing uses. Increasing the amount of manufacturing uses in the City could generate
significant additional B2B taxable sales without impeding the existing retail sales dynamic. While
the City has some existing food manufacturing uses, there is great potential to increase B2B
sales through the development of technical and other manufacturing uses. Based on EPS
research, manufacturing industrial uses could generate between $50 and $200 per square foot of
taxable sales annually. By comparison, existing industrial uses in the City generate far less,
based on evaluations of other cities such as Davis.11
The City is conveniently located near many high-tech companies in the Silicon Valley and could
capture machinery and instrument manufacturing companies looking to service the high-tech
companies in the surrounding area while capitalizing on the available space and lower rents of
Gilroy. Further, Gilroy has a readily available labor force that could, with some initial technical
training, support the expansion of manufacturing industries. Industry best practices in
manufacturing companies have been shifting over the past several years. In recent years, the
gap between manufacturing and service companies has been shrinking, with many
manufacturing companies opting to expand away from traditional manufacturing-only models
and include an element of service and maintenance to their clients. This combined service and
manufacturing model is conducive to increased B2B sales potential and provides stability to an
industry that often sees a sizable decline in uncertain economic times.12 It is worth noting that
average annual wages in the City for manufacturing uses are significantly lower than the
countywide average and average wages experienced in the City of San Jose. On average, wages
for a Gilroy-based employee are 56 percent of the countywide average. With the availability of
an affordable and strong labor force and the proximity of many potential clients, the City is in
excellent position to attract high-value manufacturing assets if land development issues can be
resolved.
10 Based on Applied Development Economics, Inc. (ADE)’s retail market outlook.
11 Based on actual 2014 sales tax generation data compiled on the Second Street Corridor and
Interland University Research Park located in the City of Davis.
12 Based on the article, “Creating Value for Machinery Companies Through Services” by the Boston
Consulting Group, dated May 2014.
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If land development costs and risks can be addressed, there is evidence that the City can
continue attracting major investment. The share of taxable sales in the City generated by
export-driven industries has been growing. Analyzing taxable sales generated in the 4th quarter,
the strongest performing quarter for retail sales generation, industrial uses made up of heavy
and light industrial and food processing equipment have increased their share of all sales in the
City. In 2017, these uses generated more than $516,000 in sales tax. With the City’s high
potential for success in export-driven industries, this critical revenue source has remarkable
growth potential.
The following chapter builds on this context to provide an updated market evaluation, facilitating
evaluation of development opportunities and related incentives in ensuing chapters.
City of Gilroy City of San Jose Santa Clara County
Average Wage Per Employee $51,075 $78,514 $90,801
County Wage Location Quotient 0.56 0.86 N/A
Average Value per Establishment $9,238,056 $16,862,848 $17,379,710
Manufacturing Industry Snapshot
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3. REGIONAL MARKET CONTEXT
The Silicon Valley and the greater Bay Area remain a hotbed of innovation and entrepreneurism.
In 2016, nearly half of all patent registrations in California originated in the Silicon Valley. The
Silicon Valley’s share of California patent registrations has been between 45 and 50 percent
every year since 2000.
The greatest share of Silicon Valley patent registrations has been attributed to the following
technology areas: computers, data processing, and information storage; communications;
electricity and heating/cooling; and health. Furthermore, the Silicon Valley and San Francisco
hold a majority share of California’s venture capital investment, boasting a 78.3-percent share in
2017. However, a snapshot of Silicon Valley initial public offerings (IPO) may indicate a non-
diverse atmosphere as 89 percent of IPOs were in the technology industry and the balance was
held in the health care industry. A look at all IPOs entering the US Stock Exchange in 2017
reflects a more diverse set of industries, including health care, technology, financials, energy,
consumer discretionary, and industrials.13
Research prepared by Joint Venture Silicon Valley indicates that overall employment in the
Silicon Valley has increased 27 percent from 2010 to 2017. Key growth has occurred in what is
reported in the 2018 Silicon Valley Index in Innovation and Information Products & Services.14
However, growth in Other Manufacturing15 has remained stagnant during the same period.
The Silicon Valley’s overall unemployment rate was 2.5 percent in November 2017, which is
significantly lower than prerecession levels, whereas between 2006 and 2007, unemployment
rates for the Silicon Valley were approximately 4 percent. In contrast, Silicon Valley
unemployment levels topped 10 percent between 2009 and 2010. In comparison, the United
States unemployment rate as of November 2017 was 3.9 percent, and the California
unemployment rate was 3.9 percent.
Regional and Local Real Estate Economic Attributes
The Silicon Valley’s workforce success is beginning to play a significant role on commercial real
estate in the region for the next few years. As mentioned earlier, Silicon Valley unemployment
rates are below 3 percent. Jobs-serving real estate, especially in the office, R&D, industrial, and
warehouse markets, is becoming extremely limited in supply and is experiencing skyrocketing
asking lease rates over the past couple years. The real estate market is finally reacting to this
13 2018 Silicon Valley Index, Joint Venture Silicon Valley.
14 Innovation and Information Products & Services includes the following subindustries: computer
hardware design and manufacturing, semiconductors and related equipment manufacturing, internet
and information services, technical R&D (includes life sciences), software, and telecommunications
manufacturing and services.
15 Other Manufacturing includes the following subindustries: primary and fabricated metal
manufacturing, machinery and related equipment manufacturing, other manufacturing, and
transportation manufacturing including aerospace and defense.
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pent-up demand, and as of 2018 Q1, there is a total of 6.1 million square feet of commercial
uses under construction in the Silicon Valley, as reported by Colliers International.16
Of note, tech giants including Facebook, Amazon, and Adobe are committing to the Silicon Valley
with commitments to build or lease new construction projects in core San Jose submarkets.
In early 2018, the 1.8-million-square-foot Moffett Towers II project in Sunnyvale was completely
leased. Facebook comprised 1.1 million square feet, and Amazon closed the remaining 700,000
square feet. In addition, Adobe has purchased a 2.5-acre property near the Diridon Station to
complete a 700,000-square-foot office building.
The effects of excessive real estate demand are not limited to office users. R&D, industrial, and
warehouse uses are equally experiencing the crunch of the Silicon Valley’s economic successes,
affecting manufacturers, back end users, and distributors. The sections below further detail the
current conditions and recent real estate activity among jobs-generating sectors in the region
and in Gilroy.
Industrial/Warehouse/R&D
The industrial, warehouse, and R&D markets are thriving in the Silicon Valley. The real estate
3 pillars of export production—manufacturing, warehousing/distribution, and design—are all
experiencing effects created by rapid absorption over the past few years. Vacancy rates among
these sectors are at historical lows; meanwhile, lease rates are exceeding historical highs.
Cushman & Wakefield report that the remaining leasable industrial space in the Silicon Valley is
functionally obsolete to handle the power demands and space configurations of today’s high-tech
manufacturing.17 The need for new space to continue the Silicon Valley’s high level of production
is materializing as 2.4 million square feet of new industrial space (inclusive of manufacturing,
warehousing, and R&D) is under construction. New speculative development is concentrated in
Milpitas and Fremont in the form of new manufacturing and warehousing space.
The state of the industrial market in Gilroy, as interpreted by conversations with real estate
professionals with experience in Gilroy and review of real estate market analytics is further
described below.
Costar reports on industrial and flex leasing
activity from September 2016 through
September 2018 indicates a tremendous lease
deal with the Compass Group, a support services
company that delivers foodservice management to
academic, healthcare, sports and entertainment,
and vending sectors. As of September 2018, job
search company Indeed indicates Gilroy Compass
Group vacancies for machine and equipment mechanics, laundry plant workers, dishwashers,
and Class A drivers. Other lease transactions demonstrate a healthy environment for production,
manufacturing, and support service users as indicated by newly executed leases for an
16 Research & Forecast Report: San Jose | Silicon Valley, Q1 2018, Colliers International.
17 Silicon Valley Industrial Q1 2018 Marketbeat, Cushman & Wakefield.
Reported Number of Leases 29
Low Square Footage 600
High Square Footage 102,466
Mean Square Footage (Rounded) 10,400
Average Months on Market 3
Average Months Vacant 4
September 1, 2016 - September 1, 2018
Gilroy Industrial and Flex Leasing Activity
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architectural metal fabricator and wholesaler, a wholesale bakery, an industrial blade producer,
and a food processor and producer.
Furthermore, Gilroy is experiencing multitenant speculative development, as well as significant
owner-user development. These are healthy indicators for the City. In contrast, owner-user–
driven development tends to focus almost exclusively on Gilroy’s industry position among key
inputs, such as labor force, land supply, adjacency to buyers/suppliers, and other such critical
inputs and outputs. Examples include UNFI, opened in 2016, and Performance Foods,
anticipated to operate by 2020.
Speculative development is conducted by developers willing to “bet” that market conditions
among relevant industries are strong enough to support the development of vertical space
accommodating a wide range of users, medium and small, that are looking to lease in Gilroy.
Typical users are those being squeezed out of more expensive adjoining markets such as
San Jose and Fremont.
EPS evaluated the market indicators for the industrial real estate sector for Gilroy, Gilroy and
Morgan Hill combined, the San Jose industrial market,18 and the Salinas industrial market.19
Table 3-1 indicates that the industrial market in Gilroy and the greater San Jose market is
becoming increasingly thin, evidenced by extremely low vacancy rates and average asking lease
rates that are at a 10-year high, as of 2018 Q1. The reported low vacancy rates and climbing
asking lease rates would indicate desirability for new development. As mentioned above, Gilroy
has landed 2 high profile industrial projects, with UNFI opening a 450,000-square-foot
warehouse in 2016, and Performance Foods anticipated to open a 195,000-square-foot facility in
2019. Further evaluation of industrial market indicators is provided below.
Trends among industrial vacancy and lease rates for all areas indicate potential need for new
space. Vacancies for Gilroy, Gilroy/Morgan Hill, and the San Jose industrial market are all below
2 percent, and vacancy rates for the Salinas industrial market are below 5 percent, as shown in
Table 3-2. Meanwhile, average asking lease rates are increasing at startling rates in Gilroy,
Gilroy/Morgan Hill, and the San Jose market, having more than doubled in Gilroy since 2008.
As shown in Table 3-3, there has been a dramatic increase in industrial lease rates for the
aforementioned areas since 2014. This evidence suggests that industrial expansion in these
market areas is in trouble as viable space is becoming extremely limited. However, these market
influences may catalyze new speculative development for producers and distributors who need
technically adequate space.
18 Consists of the County and San Benito County.
19 Comprises Monterey County.
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DRAFTTable 3-1City of GilroyPlace-Based Economic Development StrategySummary of Key Industrial Market IndicatorsMarket2008 Q1 2018 Q1 Difference 2018 Q1Average (2008-2018) 2008 Q1 2018 Q1 DifferencePercent Change (2008-2018)Avg. Annual % Change (2008-2018)2008-2012 2013-2017 2008-2017 2008-2012 2013-2017 2008-2017Gilroy5,140,475 5,174,975 34,500 0.7% 6.2% $5.13 $11.42 $6.29 122.6% 8.3% (15,688) 56,024 20,168 13,714 90,000 51,857Gilroy/Morgan Hill8,328,975 8,371,694 42,719 1.1% 4.9% $6.08 $11.94 $5.86 96.4% 7.0% 26,264 58,708 42,486 20,383 90,600 55,492San Jose Market96,324,915 94,071,792 (2,253,123) 1.4% 4.2% $7.73 $12.58 $4.85 62.7% 5.0% (1,437,594) 32,519 (702,537) 88,654 273,789 181,222Salinas Market 20,251,995 20,453,238 201,243 4.5% 6.4% $11.18 $5.08 ($6.10) (54.6%) 0.0% (56,569) 149,535 46,483 17,845 19,704 18,774ind summSource: CoStar, data retrieved May 15, 2018; EPS.Inventory Vacancy PercentageAverage AnnualNet AbsorptionAverage AnnualDelivered Sq. Ft.Industrial —SummaryAverage Annual Lease RatesPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2235.A.aPacket Pg. 76Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable 3-2City of GilroyPlace-Based Economic Development StrategyIndustrial VacancyMarketAmount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount PercentGilroy328,028 6.4% 383,478 7.4% 370,4697.2% 395,266 7.6% 315,550 6.1% 428,635 8.3% 587,528 11.4% 353,879 6.8% 306,096 5.9% 45,261 0.9% 35,818 0.7% 322,7286.2%Gilroy/Morgan Hill585,620 7.0% 435,748 5.2% 426,464 5.1% 551,555 6.6% 366,435 4.4%521,795 6.2% 768,378 9.2% 408,572 4.9% 315,096 3.8% 55,9410.7% 93,896 1.1% 411,773 4.9%San Jose Market4,014,583 4.2% 5,449,403 5.7% 6,627,932 6.9% 5,334,614 5.6% 4,214,651 4.4% 4,540,564 4.8% 4,037,014 4.3% 3,615,234 3.9% 2,210,446 2.4% 2,037,643 2.2% 1,359,392 1.4% 3,949,225 4.2%Salinas Market 1,239,507 6.1% 1,159,5045.7% 2,093,219 10.3% 1,762,531 8.7% 1,809,150 8.9% 1,510,451 7.4% 1,139,692 5.6% 1,065,903 5.2%828,695 4.1% 753,072 3.7%919,561 4.5% 1,298,299 6.4%ind vacSource: CoStar, data retrieved May 15, 2018; EPS.Industrial —Vacancy2008 Q1 2009 Q1 2010 Q1Average (2008-2018)2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q10.0%2.0%4.0%6.0%8.0%10.0%12.0%2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Industrial Vacancy RateGilroyGilroy/Morgan HillSan Jose MarketSalinas MarketPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2245.A.aPacket Pg. 77Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable 3-3City of GilroyPlace-Based Economic Development StrategyIndustrial Average Asking Lease Rate (Per Leaseable Sq. Ft.) [1]Avg. AnnualMarket 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Amount Percent% ChangeGilroyAnnual$5.13 $5.06 $4.92 $5.78 $5.77 $4.81 $5.22$5.09 $8.17 $7.50 $11.42 $6.29 122.6%8.3%Monthly$0.43 $0.42 $0.41 $0.48 $0.48 $0.40 $0.44 $0.42 $0.68 $0.63 $0.95 $0.52 - - Gilroy/Morgan HillAnnual$6.08 $6.62 $6.43 $5.81 $6.38 $5.16 $5.66 $5.66 $8.80 $8.44 $11.94 $5.86 96.4%7.0%Monthly$0.51 $0.55 $0.54 $0.48 $0.53 $0.43 $0.47 $0.47 $0.73 $0.70 $1.00 $0.49 - - San Jose MarketAnnual$7.73 $7.58 $7.08 $6.95 $7.27 $7.34 $7.67 $8.95 $10.31 $12.67 $12.58 $4.85 62.7%5.0%Monthly$0.64 $0.63 $0.59 $0.58 $0.61 $0.61 $0.64 $0.75 $0.86 $1.06 $1.05 $0.40 - - Salinas Market Annual$11.18 $9.20 $4.81 $4.65 $4.33 $4.53 $4.49 $5.36 $3.90 $3.64 $5.08 ($6.10) (54.6%) (7.6%)Monthly$0.93 $0.77 $0.40 $0.39 $0.36 $0.38$0.37 $0.45 $0.33 $0.30 $0.42 ($0.51) - - ind ls rtSource: CoStar, data retrieved May 15, 2018; EPS.[1] Lease rates reflect Triple Net Rent for the identified market.Industrial —Average AskingLease RateChange (2008-2018)$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.002008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Average Annual Lease Rate per Sq. Ft.GilroyGilroy/Morgan HillSan Jose MarketSalinas MarketPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2255.A.aPacket Pg. 78Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Gilroy’s position on the periphery of the Silicon
Valley is a fundamental asset for spec
developers or owner-users intending to
construct a large facility or industrial condo
project. Asking sales prices for raw
commercially or industrially zoned land is
significantly less than areas to the north.
Table 3-4 shows in detail that average asking
sales prices for raw land in Gilroy are approximately $9 per square foot, which is almost half of
that in Morgan Hill, and about 25 percent of the asking land sales prices in San Jose. These
savings in land costs may be critical to pro forma performance for spec developers interested in
the Silicon Valley.
Table B-1 through Table B-3 in Appendix B provide additional industrial market analytics,
including leasable square feet, annual net absorption, and annual square footage constructed.
Office
The Silicon Valley’s high concentration of workers in the professional, scientific, and technical
services; information; and health care and social assistance industries support a strong office
real estate market in the region. As discussed earlier in this chapter, tech giants are staying
committed to the Silicon Valley and are absorbing vast office spaces in San Jose and Sunnyvale,
where the region’s office sector is clustered. Despite the high costs of building and conducting
business in San Jose and surrounding areas, the value of knowledge and idea sharing in these
industries outweighs identified constraints; therefore, the region’s office market will continue to
cluster and intensify in these areas.
Gilroy’s role in the region’s office real estate market is peripheral, as evidenced by a summary of
key office market indicators in Table 3-5. At approximately 740,000 square feet, the Gilroy
office market comprises less than 1 percent of the leasable office in the San Jose market. Gilroy
office vacancy is approximately 5 percent; however, average lease rates have remained fairly
unchanged over the past 10 years. Additional details about key office market metrics are
described below.
Despite Gilroy’s minor office market share relative to the region, Gilroy may be able to benefit
from professional service employers that may need to withdraw from core Silicon Valley
communities as the cost to lease space dramatically increases. As shown in Table 3-6, current
lease rates in the San Jose office market are more than double the office lease rates in Gilroy
and in Gilroy/Morgan Hill combined. However, office space is hard to find in Gilroy and in
Gilroy/Morgan Hill, as shown in Table 3-7, which limits the sector’s ability to expand. Based on
conversations with commercial brokers and representatives with experience in Gilroy, there has
been little to no interest in office development in Gilroy for several years.
Table B-4 through Table B-6 in Appendix B provide additional office market analytics,
including leasable square feet, annual net absorption, and annual square footage constructed.
City
Price per
Acre
Price per
Sq. Ft.
Gilroy $407,876 $9.36
Morgan Hill $769,351 $17.66
San Jose $1,385,900 $31.82
Industrial and Commercial Raw Land
Average Asking Sales Price
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DRAFTPage 1 of 2Table 3-4City of GilroyPlace-Based Economic Development StrategyIndustrial and Commercial Asking Land Sales PricesItemProposedLand Use [1]Current ZoningAcresAmount Per AcrePer LandSq. Ft.GilroyBuena Vista and Hwy 101 [3] Commercial/Industrial A-1 Agriculture 10.00 $2,450,000 $245,000 $5.629090-9096 San Ysidro Avenue Industrial M-1 Limited Industrial 3.69 $1,990,000 $539,441 $12.38221 Yamane Drive [4] Commercial M-1 Limited Industrial 8.85 $3,855,000 $435,593 $10.008805 Forest Street Industrial M-2 General Industrial/Murray Ave. Spec. Use Dist. 3.98 $2,050,000 $515,075 $11.821 Camino Arroyo Commercial M-2 General Industrial — Regency/Newman Center PUD 1.32 $560,617 $424,711 $9.751 Camino Arroyo Commercial M-2 General Industrial — Regency/Newman Center PUD 5.31 $2,255,210 $424,709 $9.75951-981 Renz Lane Commercial/Retail M-2 General Industrial — Regency/Newman Center PUD 12.84 $10,067,580 $784,079 $18.00Rancho San Ysidro Commercial M-2 General Industrial & PO Professional Office 60.00 $26,000,000 $433,333 $9.95Silacci Way and Hwy 152 Commercial HC Highway Commercial 4.42 $5,300,000 $1,199,096 $27.536801 Silacci Way Commercial M-2 General Industrial 3.00 $1,500,000 $500,000 $11.486970 Camino Arroyo Commercial Regency/Newman Center PUD 10.18 $3,000,000 $294,695 $6.77Hwy 101 and E 10th Street (TVT Site) Commercial C-M Commercial Industrial 6.50 $8,400,000 $1,292,308 $29.676805 Automall Parkway Commercial C-M Commercial Industrial 2.75 $2,400,000 $872,727 $20.045980 Travel Park Circle Commercial C-M Commercial Industrial 1.87 $1,800,000 $962,569 $22.10Monterey Road Commercial/Industrial M-1 Limited Industrial 82.13 $16,815,000 $204,736 $4.70Weighted Average14.46 $5,896,227 $407,876 $9.36Morgan Hill18635 Madrone Parkway Industrial ML Light Industrial District 5.03 $3,505,708 $696,959 $16.00Cochrane Road and Butterfield Road [5] Commercial PUD Commercial 20.20 $21,997,800 $1,089,000 $25.00225 Cochrane Road Industrial ML Light Industrial District 10.05 $3,475,000 $345,771 $7.9418110 Monterey Highway Industrial ML Light Industrial District 6.69 $5,245,488 $784,080 $18.00Digital Drive Industrial ML Light Industrial District 1.30 $900,000 $692,308 $15.89965 San Pedro Avenue Commercial MO Office Industrial District 5.92 $3,868,128 $653,401 $15.0016270 Church Street Industrial ML Light Industrial District 3.04 $1,456,646 $479,161 $11.00240-260 Vineyard Court Industrial N/A 1.45 $850,000 $586,207 $13.46Weighted Average6.71 $5,162,346 $769,351 $17.66Asking Sales Price [2]Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2275.A.aPacket Pg. 80Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 2 of 2Table 3-4City of GilroyPlace-Based Economic Development StrategyIndustrial and Commercial Asking Land Sales PricesItemProposedLand Use [1]Current ZoningAcresAmount Per AcrePer LandSq. Ft.Asking Sales Price [2]San Jose2220 Tully Road Industrial Park IP Industrial Park 5.00 $10,000,000 $2,000,000 $45.912905 S King Road Industrial Park LI Light Industrial 4.81 $9,428,562 $1,960,196 $45.002829 Monterey Highway Industrial Park HI Heavy Industrial 4.32 $6,600,000 $1,529,226 $35.11459 Piercy Road Industrial Park IP Industrial Park 2.02 $1,949,000 $964,854 $22.15469 Piercy Road Industrial Park IP Industrial Park 3.60 $3,500,000 $972,222 $22.32644 Piercy Road Industrial Park IP Industrial Park 9.10 $8,500,000 $934,066 $21.44Weighted Average4.81 $6,662,927 $1,385,900 $31.82land priceSource: CoStar; City of Gilroy Zoning Map, December 2012; EPS.[1] Proposed land use as reported by CoStar.[2] Note that property values in Gilroy may be skewed lower as there are more large, unimproved sites compared to Morgan Hill and San Jose.[2] Property is located outside of the City boundaries, but is located within the Urban Growth Boundary. Property does not currently have a City zoning designation.[3] Property is currently used for utility purposes. Sale requires CPUC confirmation.[4] Property is listed as a for sale-ground lease or build-to-suit. Property is offered starting at $25 per square foot plus off-site improvements.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2285.A.aPacket Pg. 81Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable 3-5City of GilroyPlace-Based Economic Development StrategySummary of Key Office Market IndicatorsMarket2008 Q1 2018 Q1 Difference 2018 Q1Average (2008-2018) 2008 Q1 2018 Q1 DifferencePercent Change (2008-2018)Avg. Annual % Change (2008-2018)2008-2012 2013-2017 2008-2017 2008-2012 2013-2017 2008-2017Gilroy744,826 738,214 (6,612) 5.1% 8.1% $17.20 $17.84 $0.64 3.7% 0.4%(315) 5,120 2,4030 0 0Gilroy/Morgan Hill1,903,544 1,896,932 (6,612) 2.9% 6.9% $20.65 $18.80 ($1.85) (9.0%) (0.9%) 5,130 12,845 8,9880 0 0San Jose Market101,189,225 127,266,547 26,077,322 8.5% 10.5% $29.39 $42.54 $13.15 44.7% 3.8% 538,206 3,558,205 2,048,206 1,259,324 3,872,774 2,566,049Salinas Market 8,348,304 8,656,934 308,630 6.1% 6.3% $20.10 $20.71 $0.61 3.0% 0.0% (19,083) 58,841 19,879 18,260 45,728 31,994off summSource: CoStar, data retrieved May 15, 2018; EPS.Inventory Vacancy PercentageAverage AnnualNet AbsorptionAverage AnnualDelivered Sq. Ft.Office —SummaryAverage Annual Lease RatesPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2295.A.aPacket Pg. 82Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable 3-6City of GilroyPlace-Based Economic Development StrategyOffice Average Asking Lease Rate (Per Leasable Sq. Ft.) [1]Avg.AnnualMarket 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Amount Percent% ChangeGilroyAnnual $17.20 $18.10 $18.75 $18.83 $17.78 $17.00 $16.33 $15.51 $17.38$15.78 $17.84 $0.64 3.7% 0.4%Monthly$1.43 $1.51 $1.56$1.57 $1.48 $1.42 $1.36 $1.29$1.45 $1.32 $1.49 $0.05 - - Gilroy/Morgan HillAnnual$20.65 $18.82 $18.06 $17.86 $17.47 $16.68 $16.33 $15.81 $17.14 $16.73$18.80 ($1.85) (9.0%) (0.9%)Monthly$1.72 $1.57 $1.51 $1.49 $1.46 $1.39 $1.36 $1.32 $1.43 $1.39 $1.57 ($0.15) - - San Jose MarketAnnual$29.39 $27.59 $23.56 $23.91 $24.96 $26.99 $28.39 $32.55 $36.14 $39.79 $42.54 $13.15 44.7% 3.8%Monthly$2.45 $2.30 $1.96$1.99 $2.08 $2.25 $2.37 $2.71$3.01 $3.32 $3.55 $1.10 - - Salinas Market Annual$20.10 $20.50 $19.63 $18.77 $18.98 $19.30 $19.07 $18.71 $19.44$19.76 $20.71 $0.61 3.0% 0.3%Monthly$1.68 $1.71 $1.64$1.56 $1.58 $1.61 $1.59 $1.56$1.62 $1.65 $1.73 $0.05 - - off ls rtSource: CoStar, data retrieved May 15, 2018; EPS.[1] Lease rates reflect Overall Gross Rent for the identified market.Office —Average AskingLease RateChange(2008-2018)$0.00$5.00$10.00$15.00$20.00$25.00$30.00$35.00$40.00$45.002008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Average Annual Lease Rate per Sq. Ft.GilroyGilroy/Morgan HillSan Jose MarketSalinas MarketPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2305.A.aPacket Pg. 83Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable 3-7City of GilroyPlace-Based Economic Development StrategyOffice VacancyMarketAmount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount PercentGilroy72,649 9.8% 73,119 9.8% 70,026 9.4% 73,867 9.9% 69,419 9.3% 67,860 9.1% 73,097 9.8% 43,347 5.8% 42,179 5.7% 39,025 5.3% 37,583 5.1% 60,197 8.1%Gilroy/Morgan Hill156,568 8.2% 179,534 9.4% 192,874 10.1% 196,476 10.3% 123,630 6.5% 119,255 6.3% 125,958 6.6% 127,358 6.7% 99,551 5.2% 61,759 3.3% 55,870 2.9% 130,803 6.9%San Jose Market12,008,356 11.9% 15,253,925 14.7% 16,984,265 16.2% 15,411,361 14.6% 11,511,933 10.9% 10,738,349 10.0% 9,947,391 9.1% 8,713,275 7.9% 7,438,984 6.5% 8,410,626 7.2% 10,819,456 8.5% 11,567,084 10.5%Salinas Market [1]311,258 3.7% 425,574 5.1% 617,343 7.3% 621,865 7.4% 577,908 6.9% 542,542 6.4% 660,569 7.8% 521,292 6.2% 622,466 7.4% 451,483 5.2% 525,782 6.1% 534,3716.3%off vacSource: CoStar, data retrieved May 15, 2018; EPS.[1] Information not available for Salinas Market for 2006 Q1 and 2007 Q1.2008 Q12018 Q12017 Q12016 Q12015 Q12014 Q12013 Q1Office —Vacancy2012 Q12011 Q12010 Q12009 Q1Average (2008-2018)0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Office Vacancy RateGilroyGilroy/Morgan HillSan Jose MarketSalinas MarketPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2315.A.aPacket Pg. 84Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Retail
An evaluation of key market performance indicators demonstrates that Gilroy’s retail sector has
been relatively stable over the past 10 years, as shown in Table 3-8. Gilroy has experienced
modest increases in retail space, though no significant deliveries have occurred since 2012.
Nonetheless, retail vacancies in Gilroy are below 3 percent, and increases in average lease rates
have been modest.20
ADE’s 2014 report indicates Gilroy attracted regional retail sales, with few retail categories
experiencing sales leakage. The Outlets comprise approximately a quarter of the City’s retail
inventory and is a major source of regional retail sales. The Outlets host a bevy of apparel, home
décor, and lifestyle retail outlet stores that attract a variety of market consumers. While many
brick-and-mortar retail spaces are experiencing reduced sales and consumers are shifting to
online sources, with appropriate place-making efforts, the Outlets have the potential to weather
the online shift. While the Outlets consistently perform as a key driver of retail sales in the City,
they have been losing market share. Since 2013, annual sales tax revenue generated by the
Outlets has decreased by approximately $250,000, while overall sales tax revenue to the City
has increased by approximately $4.3 million. As a result, the share of citywide sales tax
revenues generated in the Outlets has decreased from 20 percent in 2013 to 14 percent in 2017.
Figure 3-1 shows the annual sales tax revenue generated by major retail groups, and
Figure 3-2 indicates the share of citywide annual sales tax revenue generated by each group.
The City’s Downtown core currently represents a small share of citywide sales tax revenues with
significant room for growth and development. Before revitalization efforts, the Downtown core
has increased in annual sales tax revenues by more than $100,000 since 2013. With well-
thought-out revitalization efforts including key placement of sales tax-generating uses developed
through a community-oriented program to reach full potential and keep up with current retail
place-making trends.
Despite the City’s retail success in the region, commercial real estate research publications
indicate that brick-and-mortar retail trends are experiencing a dramatic shift. Consumer
spending habits are increasingly shifting toward online shopping, and consumers are spending
more time and money on experience- or service-related retail. Department stores and traditional
consumer goods stores are undergoing significant contraction and, in some cases, complete
dissolution; whereas restaurants, bars, fitness franchises, taprooms, and other service- or
experience-related stores are experiencing strong growth.
New retail development will need to reflect changing consumer preferences and will need to be
clustered together so various market segment preferences are met in corridor or village settings.
Opportunities to supplement retail experiences in existing clusters such as the Outlets or
Monterey Street may be viable. However, because of decades of retail over-supply, more
residential development, effectively increasing the number of consumers in Gilroy, will be
necessary to ensure brick-and-mortar sales keep pace ensuring future success.
20 Retail performance indicators from 2008 Q1 to 2018 Q1, including inventory, vacancy, annual net
absorption, average asking lease rates, and developed square footage, is provided in Table B-7
through Table B-11 in Appendix B.
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DRAFTTable 3-8City of GilroyPlace-Based Economic Development StrategySummary of Key Retail Market IndicatorsMarket2008 Q1 2018 Q1 Difference 2018 Q1Average (2008-2018) 2008 Q1 2018 Q1 DifferencePercent Change (2008-2018)Avg. Annual % Change (2008-2018)2008-2012 2013-2017 2008-2017 2008-2012 2013-2017 2008-2017Gilroy4,557,431 4,778,013 220,582 2.7% 6.4% $15.63 $18.54 $2.91 18.6% 1.7% 78,093 34,443 56,268 52,998 0 26,499Gilroy/Morgan Hill6,905,172 7,251,084 345,912 3.1% 6.8% $17.54 $21.48 $3.94 22.5% 2.0% 95,385 61,249 78,317 93,569 600 47,085San Jose Market76,278,241 80,611,202 4,332,961 3.7% 4.5% $28.69 $32.81 $4.12 14.4% 1.4% (74,704) 452,660 188,978 599,053 574,207 586,630Salinas Market17,834,866 18,101,713 266,847 1.8% 3.6% $17.47 $19.24 $1.77 10.1% 0.0% (36,597) 100,845 32,124 34,231 30,337 32,284ret summSource: CoStar, data retrieved May 15, 2018; EPS.Retail —SummaryInventory [1]VacancyPercentage [2]Average AnnualNet AbsorptionAverage AnnualDelivered Sq. Ft.Average Annual Lease RatesPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2335.A.aPacket Pg. 86Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
$2,845,771$2,587,854$281,776$392,956$1,366,549$3,600,061$2,213,866$2,645,367$935,414$972,390$0$500,000$1,000,000$1,500,000$2,000,000$2,500,000$3,000,000$3,500,000$4,000,0002013 2014 2015 2016 2017Figure 3-1City of GilroyPlace-Based Economic StrategyAnnual Sales Tax Generated by Major GroupOutlet CenterDowntown CoreAuto DealersNewman DevelopmentRegency CenterDRAFT345.A.aPacket Pg. 87Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
12%14%14%16%14%34%32%31%30%30%7%6%6%6%5%16%15%14%14%14%2%2%2%2%2%10%12%15%16%20%20%19%17%16%14%0%10%20%30%40%50%60%70%80%90%100%2013 2014 2015 2016 2017Figure 3-2City of GilroyPlace-Based Economic StrategyAnnual Percentage of Sales Tax Revenue by Major Group State and County AllocationOther GroupsRegency CenterNewman DevelopmentDowntown CoreAuto DealersOutlet Center$18,451,921$17,317,940$16,406,382$15,564,677$14,201,856DRAFT355.A.aPacket Pg. 88Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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2013 $1,730,467
2014 $2,224,965
2015 $2,364,243
2016 $2,688,537
2017 $2,661,055
Annual Allocation of State
and County Sales Tax
Enhancing existing spaces and developing attractive new retail uses is critical to ensure that the
City continues to receive significant sales tax generated through online sales. Gilroy receives a
portion of all online sales tax generated in the County based on the percentage of all countywide
sales tax generated in the City. Historically, Gilroy has received approximately 4 percent of all
online generated sales tax in the County. Current retail trends indicate that online sales will
continue to grow, and maintaining or increasing the City’s
share of County retail activity will result in significant
online sales tax revenue each year. Since 2013, sales tax
revenue allocated to the City from County and State
sources accounted for 12 to 16 percent of citywide sales
tax revenue growing from $1.7 million to $2.7 million.
While this figure includes multiple sources, the vast
majority of these funds are generated through online sales
tax.
Hotel
Gilroy demonstrates a stable local accommodations market, indicating sustained strength in the
economy class and midscale class hotel market. However, new and diverse types of supply are
needed for Gilroy to realize significant tourism benefits. Namely, one or more downtown venues
are needed in conjunction with walkable destinations and amenities to provide an appealing
option for both business and tourism multiple segments. Complementary uses would include one
or more entertainment venues, realization of planned restaurant/pub proposals, and additional
boutique retail. The advent of HSR will bring an improved relationship to the Monterey Bay Area
resort economy and will boost business travel through Gilroy. Relative to other stops, such as
San Jose’s Diridon Station, Gilroy’s small-town ambiance could provide a viable option from the
perspective of many travelers.
Generally, excess demand and market acceptance of new hotel development is considered when
a hotel market is able to sustain above 70 percent annual occupancy. As demonstrated in
Table 3-9, annual occupancy rates have remained steady around 70 percent, demonstrating the
hotel market is sufficient to accommodate existing demand. Introduction of new products may
weaken this performance metric without increased visitation. However, a detailed evaluation of
Gilroy hotel performance metrics demonstrates strong summer seasonal months and low-
performing winter months, as shown in Figure 3-3. Increasing fall and winter tourism activity
will help sustain hotel performance in the City.
Summary of Market Conditions: Practical
Implications for Gilroy and Opportunity Sites
In review of the Gilroy real estate performance metrics, the City appears to be in a position to
capitalize on industrial growth in the near future. Industrial vacancy rates are reportedly below
1 percent and lease rates have experienced substantial gains. The analysis provided in this
chapter and in Appendix B shows that the industrial real estate market is the only sector in
Gilroy that has kept pace with the greater San Jose market, in respect to occupancy and asking
lease rates. The industrial market in the Silicon Valley has tightened to the extent that available
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Table 3-9
City of Gilroy
Place-Based Economic Development Strategy
Summary of Gilroy Visitation Data
Item 2014 [1] 2015 2016 2017 2018 [2]
Average Annual Data Indicator
Occupancy Rate 67.6% 74.4% 73.4% 69.6% 68.7%
Avg. Daily Rate $96 $99 $104 $108 $102
summ visit
Source: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.
[1] Data reflects July through December.
[2] Data reflects January through May.
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DRAFTFigure 3-3City of GilroyPlace-Based Economic Development StrategyGilroy Hotel Visitation Analysis [1]visitor chartSource: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.[1] See Table B-12 in Appendix B for detailed Gilroy hotel visitation data.0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%100.0%$0.00$20.00$40.00$60.00$80.00$100.00$120.00$140.00Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct NovDec Jan Feb Mar Apr May2014 2015 2016 2017 2018Gilroy Hotels Average Occupancy RateGilroy Hotels Average Daily RateAvg. Daily RateOccupancy RatePrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2385.A.aPacket Pg. 91Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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leasable space is likely obsolete for modern high-tech industrial users; therefore, industrial users
planning to expand or enter the market are faced with the option of spending excessively to
modernize antiquated spaces or to develop new facilities. In this case, Gilroy is at a great
advantage because Gilroy land values are much lower than core Silicon Valley cities. The average
asking sales price for raw industrial and commercial land in Gilroy is approximately 50 percent of
Morgan Hill and 30 percent of San Jose. This is already playing out in the distribution and
warehousing subindustry, as demonstrated by the 2016 delivery of the UNFI center and
proposed Performance Foods Group facility, anticipated to open in 2020.
The above analysis indicates a different case in respect to office real estate interest in Gilroy.
Office development trends are moving away from single-use business parks and instead are
incorporating other uses to cater to the lifestyle of the office employee. Office developments are
increasingly shifting toward urban centers where employees are closer to retail activities, such as
dining, eating and drinking establishments, and fitness centers. In cases where business centers
are developed on raw land, business parks are incorporating the mentioned uses, in addition to
residential components. Mentioned earlier in this report, not only does adding residential to a
mixed-use business park foster a sense of place desired by today’s workers, but adding
residential in a mixed-use employment district can improve project development economics.
The following chapter evaluates the development potential for key sites in the City with
consideration of the market analysis described in this chapter. The site evaluations detail existing
conditions, adjacencies, planned uses, and an assessment of potential development opportunities
that may be viable for the site, considering prevalent market conditions and existing and future
industry trends.
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4. OPPORTUNITY SITES AND CORRIDORS: OPPORTUNITIES,
CONSTRAINTS, AND SUGGESTED ACTIONS
Overview
In 2016, resident voters approved Measure H, which established an Urban Growth Boundary
(UGB) that restricts new development outside of that boundary through 2040. This measure
implicates the City’s capability of absorbing new residents and employees by limiting new growth
to select greenfield sites or through the intensification of underutilized development. Working
cooperatively with the GEDC and the City, EPS has evaluated several Opportunity Sites in various
City areas—in addition to infill opportunities along portions of the First Street, Tenth Street, and
Monterey Street corridors—where there is potential for new development/redevelopment of uses
that will achieve the City’s goals of attracting jobs- and tax revenue-producing uses, in addition
to fostering the community’s high quality of life. While each identified site has certain positive
attributes, in many cases, there are substantial financial or physical constraints that are
hindering prospects of development. In such cases, the City may need to implement policy
actions or infrastructure cost burden assistance to encourage prospective development. EPS
identifies such incentives the City may implement in the following chapter.
The sections below identify the Opportunity Sites and corridor infill sites (Corridor Site) evaluated
in this analysis and details EPS’s assessment of each location’s key attributes, constraints, and
opportunities for development or repositioning. EPS’s assessments were determined based on
evaluation of industry performance metrics described in Chapter 3, discussions regarding the
commercial and industrial real estate market in Gilroy with commercial real estate and industry
professionals with direct experience in Gilroy, existing planning and environmental documents
and input from the City and GEDC, and EPS’s recent work reviewing commercial and industrial
real estate trends in the Silicon Valley/San Francisco Region, the State, and nation. Potential
development opportunities expressed in this analysis reflect high-level assessments based on
historical market conditions and existing industry trends. The City and GEDC should pursue
comprehensive market studies for select sites that may provide significant economic impact.
Opportunity Sites
The GEDC initially identified 10 Opportunity Sites to evaluate, but through the course of
conducting research on each site and engaging discussions with Gilroy real estate professionals,
EPS conducted detailed analyses of 8 Opportunity Sites that possess key locational attributes to
attract development types the City desires for long-term fiscal performance. Table 4-1
summarizes basic information about each Opportunity Site, including location, area, and existing
uses, in addition to providing a summary of EPS’s assessment of development potential aligned
with the City’s economic development goals. EPS’s assessment of each Opportunity Site is
provided below.
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DRAFTPage 1 of 2Table 4-1City of GilroyPlace-Based Economic Development StrategySummary of Opportunity Sites Key Attributes Opportunity Site Site Area Existing Use(s) Current Zoning City Plan Alternatives [1] [2]EPS AssessmentAg. Mitigation#1: Las AnimasN Gilroy - Monterey Road± 50 Acres Primarily vacant M1 - Limited Industrial2040 General Plan Alternatives Report Focus Area 5Alt. 1: Industrial ParkAlt. 2: Neighborhood District HighAlt. 3: Employment CenterEmployment uses aligning with the City's Employment Center alternative to improve the City's jobs/housing balance, and benefit from City's existing workforce. Alternatively, medium-density housing is a certain market opportunity to provide housing relief to moderate and workforce households in the Silicon Valley.No#2: San YsidroLas Animas Avenue & San Ysidro Avenue± 11 Acres VacantC3 - Shopping Center Commercial2040 General Plan Alternatives Report Focus Area 5All Alternatives: General Services CommercialExperiential retail concepts that can add value to the adjacent Premium Outlets, increasing day-time visitors and visitor hours at the established outlet center.No#3: Southpoint Business ParkArroyo Circle & Camino Arroyo± 66 Acres Agricultural fields M2 - General Industrial2040 General Plan Alternatives Report (Non Focus Area)General IndustrialSite is adjacent to office and medical office uses. ADE's 2014 Economic Development Strategic Plan indicates the City should target professional, scientific and technical services, and health services industries. This site is a logical expansion for business or medical office uses.This site, in addition to other areas east of US 101, should be considered for mixed-use innovation districts combining residential, office, and R&D uses.Yes#4: TVT Site10th Street & US 101± 7 acres Retail strip center, trucking and logistics yardC3 - Shopping Center Commercial;CM - Commercial IndustrialDowntown Station Area PlanAlt. 1: Retail and long-term HSR parkingAlt. 2: RetailAlt. 3: HotelSite has strong highway visibility and is positioned at crosshairs of the City's two major thoroughfares. Site will also be positioned one-half mile away from the future HSR station. Therefore, based on these attributes, a hotel use may be well positioned on this site. However, this site may be constrained by ingress/egress challenges and adjacency to a City fire department station.No#5: Rancho San YsidroSR 152 & Camino Arroyo± 60 acres Agricultural fields C3 - Shopping Center Commercial;M2 - General Industrial2040 General Plan Alternatives Report (Non Focus Area)General IndustrialMassive opportunity for a creative development opportunity. The site is zoned for light industrial uses with a mixed use overlay to allow retail commercial and R&D uses on the site. However, the owner indicates there has been little to no interest in these uses on the site, but developers see potential for residential development.The site may be a great opportunity for a horizontal mixed-use development with residential and employment uses. The site is located one-half mile from US 101 and is 1.5 miles from the HSR station. Development feasibility may be constrained by required off-site traffic improvements and Ag. Mitigation Policy.Yes#6: Gilroy Crossing/Regency Phase IISR 152 & Camino Arroyo± 10 acres VacantRegency/Newman Center PUD:C3 - Shopping Center Commercial;M2 - General Industrial;HC - Highway Commercial2040 General Plan Alternatives Report (Non Focus Area)General IndustrialThe site is situated near big box retail stores and large industrial and warehouse projects. The site is not large enough to accommodate a large distribution or warehouse use, but could accommodate a smaller scale manufacturing use or industrial condo project. ADE's analysis indicates Gilroy should target various metal manufacturers/fabricators, machine shops, and communications or electrical equipment manufacturing.NoPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2415.A.aPacket Pg. 94Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 2 of 2Table 4-1City of GilroyPlace-Based Economic Development StrategySummary of Opportunity Sites Key Attributes Opportunity Site Site Area Existing Use(s) Current Zoning City Plan Alternatives [1] [2]EPS AssessmentAg. Mitigation#7: McCarthy Business Park - Removed from evaluation#8: Gilroy Gardens (City Owned Portion)Hecker Pass Hwy± 35 acres Nursery, vacant lands, parking lotsHC - Highway Commercial2040 General Plan Alternatives Report (Non Focus Area)Visitor Serving CommercialOpportunity to forge Hecker Pass gateway into a dynamic tourism destination. Unique position to showcase Gilroy's agricultural heritage aimed to serve a variety of patrons, including local families, weekend travelers, and day-trippers. Possible development opportunities will rely on realization of plans envisioned for Gilroy Gardens.No#9: Gilroy Sports Park (Phase II)Monterey Frontage Road± 78 acres Agricultural fields A1 - Agricultural2040 General Plan Alternatives Report (Non Focus Area)Parks and RecreationExpansion of the existing Gilroy Sports Park will increase the capacity for the City to host sports and recreational events and tournaments. If additional ball fields or other sports and recreational facilities are added to the site, the property can become a sports venue epicenter for south Santa Clara County, Monterey County, and San Benito County.Yesos sumSource: City of Gilroy; discussions with various property owners and brokers; EPS.[1] Reflects land use(s) proposed for site based on City planning documents, including the City of Gilroy 2040 General Plan Alternatives Report (2018), the Downtown Gilroy Station Area Plan (2016), and the Downtown Specific Plan (2005).[2] See Appendix C for additional proposed land use information about the City of Gilroy 2040 General Plan Alternatives Report.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2425.A.aPacket Pg. 95Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Packet Pg. 96 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 44 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
(i.e., various densities) and target segments may provide housing relief to the region’s
workforce.
Preliminary environmental assessments indicate moderate off-site improvements are required to
initiate substantial development on this site. Information from the City indicates some
environmental review work has been prepared for portions of the Las Animas Opportunity Site.
A City Negative Declaration, dated October 9, 2002, indicates roadway improvements would be
required on Leavesley Road, located south of the site. The site is zoned M1—Limited Industrial,
which may align with some employment uses, but changes to zoning may be required for other
employment uses, and definitely for residential uses. Fortunately, EPS’s impression regarding the
future use of this site conforms to the City’s potential future designation of the site.
Key Constraints
A mitigated negative declaration was prepared in 2002 responding to a request to subdivide one
of the subject parcels of 9 acres into 9 separate industrial parcels, ranging from 0.375 acres to
1.513 acres. This document indicates that subdividing the subject parcel for development would
require significant traffic mitigations to avoid a finding of environmental impact. City notes on
the environmental document show that several mitigations have been completed; however,
some are still outstanding. Outstanding mitigations include modifications to the intersection of
Murray Avenue/Leavesley Road to ensure the intersection performs at LOS C, based on City
General Plan conditions.
Opportunity Site #2: San Ysidro
General Information
The San Ysidro Opportunity Site is located at the corner of Las Animas Avenue and San Ysidro
Avenue. The site is approximately 11 acres and is zoned C3—Shopping Center. The San Ysidro
Opportunity Site is located directly north of the Outlets and is bound to the west by US 101.
The San Ysidro Opportunity Site is located in Focus Area 5 of the City’s Alternatives Report, and
the Alternatives Report indicates the City intends to designate the site as General Services
Commercial.
EPS Assessment
Gilroy’s San Ysidro corridor is a City and regional retail magnet. The total retail space along
San Ysidro Avenue, comprised mostly of the Outlets, is approximately one-quarter of the City’s
entire leasable retail space.22 CoStar reports that as of June 2018, the retail space along the
San Ysidro corridor between Las Animas Avenue and Gilman Road is at approximately 2 percent
vacancy. However, as discussed in Chapter 3, sales tax revenues generated from Outlets sales
have been slowly declining in recent years. The Outlets buildings were constructed in the 1990s
and the Outlets’ diminished performance may indicate a need to refresh and modernize the
center’s position and appeal.
Empirical industry research demonstrates that the retail industry has experienced extreme
volatility in the past 2 to 3 years as dozens of department stores and big box retail providers
have shuttered or contracted, a result of changing consumer behavior habits with the rise of
22 Based on CoStar data retrieved in June 2018.
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Packet Pg. 97 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 45 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
e-commerce, changing consumer preferences, and oversupply of retail developments constructed
in the second half of the 20th century.
New retail developments are evolving from consumer goods to experience focused, offering more
eateries and drinking establishments, entertainment opportunities, and fitness studios.
In addition, traditional goods retailers are changing their format to provide services consumers
cannot experience solely through online shopping. For instance, Nike recently opened a new
55,000-square-foot store in New York City (NYC) that features a miniature indoor basketball
court, treadmills, a sneaker bar allowing shoppers to custom-design sneakers, and a small turf
enclosure that allows customers to run agility drills with Nike products.23 These features create a
memorable and enjoyable shopping experience that enables customers to test products and
sustains intrigue and brand loyalty.
While Gilroy and NYC are vastly different contexts, the notion of seeking activating,
complementary land uses that enhance the visitor experience is germane in Gilroy. Efforts
should be considered to improve the Outlets’ status as a regional retail attraction. Retail market
research indicates high-performing retail centers provide a diverse mix of uses to attract and
keep consumers on site. This may present an opportunity to develop a new retail center to
complement the Outlets while potentially diversifying clientele. Retail developers are pursuing a
similar concept adjacent to the premium outlets in Livermore. The Shops at Livermore, currently
under construction, will deliver 115,000 square feet of new retail uses with a substantial mix of
quick service restaurants and additional retailers such as a Crate & Barrel outlet and Kirkland’s
Furniture. The Shops at Livermore is intended to provide additional eating options and deliver
retail offerings that are not present at the neighboring premium outlets.
Another opportunity that may deliver success at this location is a high-end movie theater
complex. Across the State, upscale movie theaters offering novel amenities such as dining,
drinking, and leather reclining chairs are becoming anchors in new retail shopping and lifestyle
centers. However, cinema planning and development requires substantial market analysis related
to consumer demand, trade area competition, and the potential for urban decay of the existing
Platinum Theaters Gilroy complex. While this proposition is a conceptual consideration for this
site, further critical market analysis would be warranted to evaluate the implications of cinema
planning and development relative to future consumer trends.
Key Constraints
Correspondence with the City’s Community Development Department reveals no environmental
review has been conducted for this site. However, the City’s 2020 General Plan Circulation Plan
Map indicates that San Ysidro Avenue is planned for realignment, which may cut through
portions of this site. Any changes to the San Ysidro Avenue realignment will require a General
Plan amendment, unless plans are accommodated in the GPU process. Furthermore, notes
prepared by the City show that it is likely street segments and intersections near the site are at
or near maximum capacity. Further environmental review is necessary to identify potentially
significant barriers.
23 Global Retail Trends 2018, March 2018. KPMG Global Consumer & Retail Advisory.
5.A.a
Packet Pg. 98 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5.A.a
Packet Pg. 99 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5.A.a
Packet Pg. 100 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 48 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Studies for the Downtown Gilroy Station Area indicate the HSR station plan area may be able to
support an additional 290 to 1,400 hotel rooms at buildout (assuming buildout will occur by
2040). Location will be a critical amenity for future hotel development near Downtown. This site
may be ideal because it is both highway serving and will be able to serve visitors using the future
HSR.
The ability to attract and support a hotel on this site will be contingent on Downtown’s
improvement and continued success. Downtown’s success and the viability of a hotel
development are symbiotic as overnight visitors will shop and dine Downtown, and Downtown’s
ability to attract visitors will improve hotel visitation rates.
This analysis also highlights parcels directly above the TVT Opportunity Site, indicated with
lighter shading in the image shown above. Should redevelopment of the TVT Opportunity Site
occur, repositioning the nearby properties from storage to visitor-serving uses, such as
restaurants, will better serve a hotel at the TVT Opportunity Site. Literature on hotel siting
indicates that visual connectivity and linkages to active uses, such as restaurants and plazas, are
key criteria for hotel placement.
Key Constraints
As of July 2018 no environmental documents had been prepared to identify the mitigations
required to offset impacts generated by developing increased densities on the site. Both the City
and property representing property broker have indicated future site designs will need to address
improving ingress and egress to the site. In addition, the site is adjacent to a City fire
department station, which may be a nuisance for certain development proposals.
Opportunity Site #5: Rancho San Ysidro
General Information
Rancho San Ysidro is an expansive single-parcel site located along SR 152 near Camino Arroyo.
The site is approximately 60 acres and is zoned C3—Shopping Center Commercial and
M2-General Industrial development. The site is used for agricultural row crop production and is
located among the City’s newer big box retail uses and various industrial uses such as industrial
services, warehousing, and distribution. Rancho San Ysidro is owned by John Machado,
a commercial real estate developer and broker with career-long experience in the County,
focusing on retail properties in San Jose and the greater Silicon Valley area.
Rancho San Ysidro is not located in a specific 2040 General Plan Focus Area; however, the
Alternatives Report indicates the site is planned for General Industrial uses. The site is listed for
various opportunities, including sale, ground lease, or joint venture. A marketing brochure for
the site indicates potential opportunities for a horizontal mixed-use development consisting of
retail, industrial, and R&D uses.
EPS Assessment
Rancho San Ysidro is a massive opportunity for a creative development. The site is located one-
half mile from a US 101 interchange and is 1.5 miles from the future HSR station. Similar to
Opportunity Site #3 (Southpoint Business Park), this site has drawn little interest for
employment uses from developers. However, John Machado mentioned residential developers
have inquired about the site. Unfortunately, existing zoning code will not allow for residential
5.A.a
Packet Pg. 101 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Econom
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5.A.a
Packet Pg. 102 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 50 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Prepare off-site improvement plans for installation of a traffic signal at the Cameron
Boulevard and Renz Lane intersection.
Include in the final map to show a distance along Cameron Boulevard between SR 152 and
Renz Lane of no fewer than 575 feet to provide adequate room for southbound and
northbound left turn pockets on Cameron Boulevard.
Prepare off-site improvement plans for Cameron Boulevard and the Cameron Boulevard
intersections with SR 152 and Renz Lane. These streets shall be designed to accommodate
the northbound and southbound left turn movements and southbound right-turn movement
from Cameron Boulevard, as well as the westbound left turn movement from Renz Lane.
Storage capacity for the turn lanes shall be based on the requirements for the project
scenario approved and on whether or not the Luchessa Avenue connection is completed.
Prepare off-site improvement plans for the construction of a second eastbound through lane
at the Monterey Street and Luchessa Avenue intersection.
Prepare off-site improvement plans for the following intersections to accommodate maximum
peak-hour vehicle queues:
— Monterey Street and Tenth Street: Lengthen the existing southbound left-turn pocket.
— Camino Arroyo and Renz Lane: Lengthen the existing northbound right-turn pocket.
In addition, add a second northbound left-turn pocket and a second westbound receiving
lane on Renz Lane.
Opportunity Site #6: Gilroy Crossing/Regency Phase II
General Information
Gilroy Crossing/Regency Phase II (Gilroy Crossing) is a 10.2-acre single-parcel site located along
Camino Arroyo, immediately south of SR 152, across from Rancho San Ysidro. The site is vacant
and is surrounded by big box retail and industrial services uses. Gilroy Crossing is included in the
Regency/Newman Center Planned Unit Development (PUD), which allows for C3—Shopping
Center Commercial, M2—General Industrial, and HC—Highway Commercial uses.
Rancho San Ysidro is not located in a specific 2040 General Plan Focus Area; however, the
Alternatives Report document indicates the site is planned for General Industrial uses. As of
September 2018, CoStar indicates the site is under contract for sale at a listed price of $3 million
($6.77 per square foot), marketed as a retail site.
EPS Assessment
Gilroy Crossing’s position across from big box retail stores suggests a similar development
pattern is inevitable for the site, further confirmed by information shown on CoStar, which
indicates the site is marketed as a retail site. The site’s configuration does not appear that it can
accommodate similar big box retailers because the site may not provide adequate parking in a
design that can foster a pleasant consumer experience. As mentioned in the San Ysidro
Opportunity Site assessment, the retail landscape is rapidly changing; and if any additional mid-
to large-scale (50,000+ square feet) retail developments are proposed in the City, quality
5.A.a
Packet Pg. 103 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 51 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
design, product, and configuration is paramount to ensure the development will fit emerging
retail trends.
Should future development proposals for the site correspond with the City’s goal to add export-
based users, fabrication and manufacturing shops may be an ideal target for Gilroy Crossing. The
site is located in a transitionary area between retail and industrial uses. Surrounding industrial
users include industrial services companies and a few large distributors. The site is not large
enough to accommodate a large distribution or warehouse use but could support a smaller scale
manufacturing use or industrial condo project, targeting such users as metal
manufacturers/fabricators, machine shops, and communications or electrical equipment
manufacturers. A combination of fabricators and industrial services can provide export-based
companies, providing B2B sales, in addition to providing a lower overhead base for companies
that export industrial services to the greater Silicon Valley.
Key Constraints
Similar to the Rancho San Ysidro site, the City provided EPS with the Gilroy Crossing Final
Mitigation Monitoring Program, which includes significant traffic and other mitigation
requirements, as listed below:
At the US 101 northbound off ramp and SR 152 intersection, add a third eastbound through
lane on SR 152. The third eastbound through lane could be carried to Camino Arroyo, where
it would become an eastbound right-turn lane.
At the Camino Arroyo and SR 152 intersection, extend the triple northbound left-turn lanes to
accommodate a 1,325-foot vehicle queue. Also, the eastbound right-turn pockets should be
designed to accommodate a 600-foot vehicle queue, and the westbound left-turn pocket
should be extended by 25 feet.
For the project driveway on Camino Arroyo, design the double eastbound left-turn lane to
provide storage space for 30 queued vehicles. A second southbound left-turn lane should be
added to provide storage for 13 queued vehicles.
Provide bicycle, pedestrian, and bus transit facilities on Camino Arroyo.
Pay the incremental cost associated with the accelerated purchase of the City Fire
Department aerial truck apparatus.
Opportunity Site #7: McCarthy Business Park—Removed from Analysis
EPS spoke with Joe McCarthy, a San Jose-based developer, who indicated he is moving forward
with a proposed project on this site, and therefore, EPS removed this site from further
evaluation. The proposed project, a multitenant speculative building, should provide a near-term
indicator regarding the depth of this market segment.
5.A.a
Packet Pg. 104 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5.A.a
Packet Pg. 105 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 53 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
activity development on the hillside south and adjacent to the theme park and future visitor-
serving commercial indicated on a portion of the property abutting SR 152, including the 35-acre
portion the City intends to maintain control.
EPS Assessment
Gilroy has a rich history in agricultural production, particularly garlic production, for which the
City is referred to as the “Garlic Capital of the World.” Farming, harvesting, and production of
prunes, tomatoes, flowers, onion, and garlic have contributed to the economic health of Gilroy.
As the region’s distribution reach has expanded, food processing centers have established in
Gilroy.
Since the 1990s, wine production and tourism has emerged as a notable industry in areas
surrounding the San Francisco Bay Area and the Silicon Valley, including Napa and Sonoma
Counties, the Tri-Valley area, and the South County. Eager to capitalize on consumers’ growing
inclination for wine, South County civic leaders and winery owners partnered to establish the
Santa Clara Valley Wine Trail (Wine Trail). The Wine Trail is a signage program intended to
promote agribusiness in the South County and provides a signage network to direct drivers along
a wine route through South County communities, including Morgan Hill, San Martin, Gilroy, and
surrounding unincorporated communities. Opportunities to recognize the City’s and region’s
agricultural heritage should continue to be an economic priority.
The Gilroy Gardens Opportunity Site is a chance to bond the City’s horticultural history with
current and future economic goals. Further, this site presents an opportunity to forge the Hecker
Pass Gateway to the City into a dynamic tourism destination. Wineries and tasting rooms scatter
the Hecker Pass Highway just west of the City.
The site’s 35 acres is sizeable to accommodate multiple agriculturally inspired attractions to
serve a variety of patrons. A network of attractions should gratify local and visiting families,
millennial weekend travelers, and Baby Boomers, who may be more inclined to make mid-week
overnight trips to avoid the bustling weekend visitors. Potential opportunities are plentiful and
may include a public market that hosts local and craft purveyors or an urban farm providing
horticultural education programs. Such opportunities are harmonious with Gilroy Gardens’
mission to promote horticulture and environmental stewardship.
If Gilroy Gardens is able to realize the potential of the property as indicated in the 2016
Conceptual Master Plan, the City-owned site is well positioned to be established as a mixed-use
village offering a mix of hospitality and entertainment uses such as hotel, restaurants, and retail
suited to the outdoor activity uses envisioned for the property. Example products include mixed-
use village developments commonly associated with mountain ski resorts. Resort operators are
able to use the villages to offer attractions beyond snow sports, including concerts, festivals, and
conferences.25 However, for this concept to gain investment and development interest, Gilroy
Gardens will need to expand to generate overnight visitors needed to occupy village hospitality
uses. If this opportunity does not materialize, the City could consider additional options that can
still have a great impact on annual visitation and regional tourism spending.
25 Elaine Glusac, “Mountain Resorts Moving Beyond Biking and Hiking,” The New York Times,
July 19, 2016, https://www.nytimes.com/2016/07/24/travel/ski-vail-resorts-hiking.html.
5.A.a
Packet Pg. 106 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5.A.a
Packet Pg. 107 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 55 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Salinas, Monterey, and Hollister, the Gilroy Sports Park can become a sports venue epicenter
with a reach of nearly 3 million people within a 50-mile drive.26
Key Constraints
The Gilroy Sports Park is not within the City limit boundary or Urban Service Area (USA). Any
non-City development would be subject to Local Agency Formation Commission (LAFCo) approval
of the USA and annexation process. Furthermore, the site is subject to the City Agriculture
Mitigation Policy, requiring a 1:1 replacement of converted agricultural lands. Other
infrastructure improvements will be required, primarily traffic improvements. The project’s EIR
was prepared for a project area including 27.72 acres of residential neighborhood development
and 27.13 acres of commercial general services development; therefore, it is difficult to discern
the infrastructure improvements needed to serve the Gilroy Sports Park.27 City notes state
significant traffic improvements will be required for buildout of the park.
Corridors
Gilroy residents’ approval of a new UGB places limits on the City’s ability to accommodate new
commercial, industrial, and residential growth to several greenfield sites and the speculation that
infill development will occur within the City’s existing urban fabric. The City engaged EPS to
evaluate the feasibility of infill development along 3 City corridors, as listed below:
1. First Street between Santa Teresa Boulevard and Church Street.
2. Tenth Street between Monterey Street and US 101.
3. Monterey Street between Third and Tenth Streets.
In total, EPS identified 7 total Corridor Sites that have potential for immediate development or
should be considered for future repositioning. The sections below detail the role of each corridor
and identify the sites that should be considered for development or repositioning that coincides
with the City’s vision, as expressed in various City planning documents. Table 4-2 summarizes
basic information about each Corridor Site, including location, area, and existing uses, in addition
to providing a summary of EPS’s assessment of development potential aligned with the City’s
economic development goals. EPS’s assessment of each Corridor Site is provided below.
First Street Corridor
Extending from Santa Teresa Boulevard to Monterey Street, the section of First Street considered
in this analysis is generally an auto-centric corridor planned to provide neighborhood-serving
shopping centers occupied by grocery stores, fast-food and casual eateries, and personal
services business (e.g., banks, dry cleaners, salons). First Street is a designated Focus Area in
the City’s Alternatives Report. The Alternatives Report indicates the City envisions mixed-use or
commercially focused concepts for the corridor, as demonstrated in excerpts of the Alternatives
Report provided in Appendix C.
26 US Census Bureau, Esri Business Analyst Online.
27 Gilroy Urban Service Area Amendment 98-03 Subsequent Final EIR, February 2002. EMC Planning
Group Inc.
5.A.a
Packet Pg. 108 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 1 of 2Table 4-2City of GilroyPlace-Based Economic Development StrategySummary of Corridor Sites Key AttributesOpportunity Site Site Area Existing Use(s) Current Zoning City Plan Alternatives [1] [2] EPS AssessmentFIRST STREET CORRIDORContempo PlazaFirst Street & Westwood Drive± 4.2 Acres Neighborhood Retail Shopping CenterC3 - Shopping Center Commercial2040 General Plan Alternatives Report Focus Area 3Alt. 1: Mixed-Use LowAlt. 2 & 3: Mixed-Use HighDiscussions with commercial real estate professionals in Gilroy indicate this shopping center has been struggling to retain tenants over the past couple years, with occupancy rates hovering around 60 percent. First Street is lined with shopping centers, and the evidence that this retail center struggles to retain tenants indicates that First Street is oversaturated with retail uses, or that retail struggles in shopping centers without a core anchor tenant.Medium- to high-density housing residential with a small retail component is likely to be a feasible opportunity for developers interested in acquiring the center for redevelopment. First Street & Kern Avenue± 3.4 Acres Vacant C3 - Shopping Center Commercial2040 General Plan Alternatives Report Focus Area 3All Alternatives: High Density ResidentialIn agreeance with the City's vision for this parcel, EPS identifies this site as a potential opportunity for high-density residential. The site is located adjacent to existing high-density residential apartments and retail shopping centers. This site can add to the City's housing stock with products that are within walking distance of parks, schools, grocery stores, and other retail.TENTH STREET CORRIDOR [3]OSH Building10th Street & Alexander Street± 4.3 Acres Vacant OSH Store & Surface ParkingHC - Highway Commercial2016 Downtown Station Area PlanAlt. 1: HotelAlt. 2: Mixed-Use Housing w/RetailAlt. 3: Office w/RetailLocated adjacent to the future Gilroy HSR station, this site is well positioned to be a mixed-use housing development. This site is primed for repositioning that aligns with TOD strategies to increase population densities around major transit hubs. This site and proximity underutilized parcels should be considered for a master planned effort to create a Downtown gateway the City envisions for this area. Creating direct pedestrian access to the HSR station and Monterey Road should be a critical design consideration to improve the connectivity between the western and eastern sides of the existing rail line.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2565.A.aPacket Pg. 109Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 2 of 2Table 4-2City of GilroyPlace-Based Economic Development StrategySummary of Corridor Sites Key AttributesOpportunity Site Site Area Existing Use(s) Current Zoning City Plan Alternatives [1] [2] EPS AssessmentMONTEREY STREETMonterey Street & Third Street± 0.3 Acres Vacant Downtown Expansion District2005 Downtown Specific PlanDowntown Expansion District - Desired uses include retail, restaurants, cafes, offices above retail, select commercial services, hotel, inn, bed & breakfast, and residential above street frontage.Possibilities for an impactful development at this site is a challenging task and opportunity. This site is located at a transitional area of Monterey where the urban form changes from auto oriented (e.g., deep setbacks, street fronting surface parking) to pedestrian oriented. Currently there is limited supply and demand for office uses, but the emerging trend of coworking spaces could fit in this location. Opportunities to mix this use with a cafe, or mixed-use residential are suggested.Monterey Street & Fourth Street± 0.5 Acres Vacant Downtown Historic District2005 Downtown Specific PlanDowntown Historic District - Desired uses include unique street front retail, offices and apartments over retail, entertainment, and selected service uses.This vacant parcel appears to be the most development ready location in Downtown Gilroy. A new development at this site can complete this corner, in addition to creating interest in expanding downtown revitalization north of 4th Street. Viable opportunities may include a 3-story mixed use development with residential over ground-floor retail/restaurants.Arts CenterMonterey Street & 7th Street± 2.5 Acres Arts Center, Surface Parking, Vacant Lot, Community GardenCivic/Cultural Arts District2016 Downtown Station Area PlanAlt. 1: Parking & Civic/Public FacilityAlt. 2: Arts Center w/RetailAlt. 3: Mixed Use HousingThis site, in conjunction with the Hornlein Court site, can establish a cultural arts node in Downtown. The City owns a majority of the site, which can bode well for a P3 opportunity to combine public-serving amenities with commercial developments such as residential and restaurants/retail. Also, this site is well located for a parking structure to serve Downtown establishments and the HSR station.Hornlein CourtMonterey Street & Hornlein Court± 2.3 Acres Refurbished/Vacant Gas Station, Restaurant, Obsolete StreetDowntown Historic District2016 Downtown Station Area PlanAlt. 1 & 3: Mixed Use HousingAlt. 2: Parking & Mixed Use HousingThe site comprises multiple parcels and a defunct street segment. The potential for redevelopment of this site would be improved if Hornlein Court is eliminated and parcelized with adjacent lots to increase the capacity for development. Being located one block from the future HSR station, this site can be attractive for a variety of uses, including multifamily residential and retail/restaurant users. A unique restaurant tenant may be able to utilize the former gas and service station, which possesses vintage architectural features.corridor summSource: City of Gilroy; discussions with various property owners and brokers; EPS.[1] Reflects land use(s) proposed for site based on City planning documents, including the City of Gilroy 2040 General Plan Alternatives Report (2018), the Downtown Gilroy Station Area Plan (2016), and the Downtown Specific Plan (2005).[2] See Appendix C for additional proposed land use information about the City of Gilroy 2040 General Plan Alternatives Report.[3] In addition to the opportunity areas shown below, see Table 4-1 regarding the TVT Site, an Opportunity Site located on Tenth Street.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2575.A.aPacket Pg. 110Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5.A.a
Packet Pg. 111 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 59 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Alternative 1: Mixed-Use Low
Alternatives 2 & 3: Mixed-Use High
EPS Assessment
Discussions with commercial real estate professionals in Gilroy indicate this shopping center has
been struggling to retain tenants over the past couple years, with anemic occupancy rates
hovering around 60 percent. First Street is saturated with larger shopping centers anchored by
chain grocery stores (e.g., Safeway, Nob Hill Foods), and the evidence that this retail center
struggles demonstrates that without a reputable anchor tenant, this shopping center should be
positioned for reuse or redevelopment.
Medium- to high-density residential is likely to be a feasible opportunity for developers interested
in acquiring the center for redevelopment. As mentioned in prior Opportunity Site evaluations,
residential development carries strong pro forma performance. Providing infill residential
development with a possible inclusion of small-scale onsite retail, such as a café, will increase
population densities near existing retail shopping centers, therefore sustaining the performance
of these centers in the future.
Key Constraints
As described above, Contempo Plaza includes 3 buildings on the property. CoStar indicates the
2 retail strip buildings are owned by a single family trust, and the stand-alone building is owned
by a different holding company. Future plans to reposition and redevelop this site will require
cooperation from both parties. Hypothetically, one party may be less inclined to sell or consider
redeveloping if their asset is cash flowing, whereas another party may feel the property is
distressed and needs to be modernized. Redeveloping this site will rely on both parties agreeing
to partner together, one acquiring the other’s property, or both selling to a prospective
developer. All three options are hinged on speculation and may not materialize without an urgent
incentive.
First Street Corridor Site #2: First Street and Kern Avenue
General Information
Located across from the Gavilan Hills Memorial Park cemetery, this vacant corridor site is
approximately 3.4 acres and is zoned C3—Shopping Center Commercial. High-density residential
borders the site to the north, community commercial shopping to the east, the cemetery to the
south, and neighborhood-serving retail and civic uses to the west.
This site is located in Focus Area 3 of the Alternatives Report, and the Alternatives Report
indicates the City intends to designate the site as High-Density Residential.
EPS Assessment
In agreeance with the City’s vision for this parcel, EPS identifies this site as a potential
opportunity for high-density residential development. The site is located adjacent to existing
high-density residential apartments and retail shopping centers; therefore, an apartment project
will be suitable with surrounding uses. This site can add to the City’s housing stock with a
product that is within walking distance of parks, schools, grocery stores, and other retail and
personal services businesses.
5.A.a
Packet Pg. 112 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 60 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Key Constraints
The subject parcel is not zoned for residential development, requiring a rezone; however,
multifamily residential uses on this site appear to be envisioned by the City as indicated by the
City’s Alternatives Report.
Currently, residential development economics are favorable as rental rates continue to increase,
and there is pent-up demand in the Silicon Valley resulting from the sustained increase in jobs
but lack of housing production. Although the revenue side of residential development may
appear promising, construction costs have dramatically increased over the past 5 years because
of escalating materials costs and dire lack of construction and trades labor. Reports indicate that
nationally, the average delay in apartment project delivery is nearly 6 months, citing labor
constraints.28
Tenth Street Corridor
The City engaged EPS to evaluate new development opportunities on the Tenth Street Corridor.
For the purposes of this analysis, the Tenth Street Corridor is defined as the segment between
Monterey Street and US 101. Historical land use planning for the Tenth Street Corridor is
dictated by the 2005 Downtown Specific Plan for a subsegment between Monterey Street and
Alexander Street and the 2020 General Plan for the remaining portion between Alexander Street
and US 101.
The Tenth Street Corridor serves as a commercial corridor with a variety of retail types. The
north side of Tenth Street includes a variety of convenience retail strip centers and the shuttered
Orchard Supply Hardware (OSH) store. The south side of Tenth Street consists of larger
community-serving shopping centers occupied by wholesale grocers, pharmacies, discount
apparel stores, and various fast-food and casual eateries, among other tenants. The City’s
Automall, developed in the 1990s, is located south of the Tenth Street Corridor along Chestnut
Street.
Like the First Street Corridor, Tenth Street is a gateway to the City’s Downtown. East of US 101,
Tenth Street is replaced in name by the Pacheco Pass Highway (SR 152) that extends westward
to Interstate 5, passing by Casa De Fruta and the San Luis Reservoir. This feature establishes
the Tenth Street Corridor as the southern gateway to Downtown. Furthermore, this corridor is
likely to undergo transition in the future because of its proximity to the future HSR station,
located on Monterey Street between Seventh and Eighth Streets.
The Tenth Street Corridor is included in the City’s Downtown Station Area Plan, providing
3 alternatives envisioning land use changing to add high-density housing, office uses, hotels, or
retail uses along the Tenth Street Corridor. Excerpts of the Downtown Station Area Plan detailing
the land use alternative concepts are provided in Appendix C.
EPS included 2 Tenth Street Corridor sites in this analysis. However, 1 of the sites is also
Opportunity Site #4 (TVT) and is therefore included in the Opportunity Sites analysis. An
evaluation for the other Tenth Street Corridor site is provided below.
28 State of the US Multifamily Market. June 11, 2018. CoStar Group.
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Packet Pg. 113 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 61 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Tenth Street Corridor Site #1: OSH Site
General Information
In 2014, OSH closed its doors for the last time at the Tenth Street location after company
executives decided not to renew the building’s lease.29 OSH has deep roots in the Silicon Valley
and was founded in San Jose in 1931. The company started as a co-op–supplying fruit grower in
an era when the County was bountiful in fruit production. OSH adapted to the market, growing
into a general hardware store and supply company catering to homeowners and gardeners alike.
The company was acquired by Sears in 1996, then later by Lowe’s when the OSH brand fell into
bankruptcy. Lowe’s later announced in August 2018 that all remaining OSH stores were closing,
citing the brand’s performance was not worth keeping alive.30
OSH’s Gilroy closure introduced a 35,600-square-foot building on a 4.3-acre site to the market
that has yet to be occupied by a new user; however, windshield surveys indicate the site’s
parking lot is being used as an overflow lot for the South County Chrysler Dodge Jeep Ram Fiat
dealership located in the nearby Gilroy Automall.
The site is surrounded by a variety of uses: industrial supply companies and storage yards to the
north, a locally serving commercial shopping center to the east, a community-serving shopping
center to the south, and flex spaces, warehousing, and retail uses to the west. In addition, a
4-story 262-unit affordable apartment development that is nearly complete is located
catercorner to the OSH Site.
The OSH Site is located in the Downtown Station Area Plan, which identifies 3 different land use
development alternatives for this site, as listed below:
Alternative 1: Hotel
Alternative 2: Mixed-Use Housing with Ground-Floor Retail
Alternative 3: Office with Ground-Floor Retail
EPS Assessment
The ongoing retail transformation has sadly disposed OSH in Gilroy and as an entire enterprise.
As disappointing as OSH’s departure is for Gilroy, this site unlocks tremendous potential to
establish a bona fide HSR transit village.
The OSH Site is primed for repositioning that aligns with TOD strategies to increase population
densities around major transit hubs. This site and its proximity to underutilized parcels should be
considered for a rigorous master planned effort to create a gateway the City envisions for the
Tenth Street end of Downtown. As an initial phase, a mixed-use residential development with
ground-floor retail should be considered at this site, but the City should engage nearby property
owners to the north of the site to gauge interest in partnering in future phases to expand the
TOD village to the corner of Alexander and Eighth Streets.
29 OSH Closing, July 10, 2014, Gilroy Dispatch.
30 Lowe’s closing Orchard Supply Hardware chain it acquired out of bankruptcy, August 22, 2018,
LA Times.
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Packet Pg. 114 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5.A.a
Packet Pg. 115 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 63 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Of critical importance for the future of Downtown Gilroy’s resurgence, the Gilroy Transit Center is
located on Monterey Street. The Transit Center currently serves regional transit operators such
as Caltrain and VTA, in addition to local bus transit operators. The Transit Center and nearby
properties are expected to undergo significant transformation when millions of dollars in station
and infrastructure improvements are initiated in the near future.
It is fair to speculate that private investments will flow into Downtown Gilroy by the time HSR is
operating through Gilroy. The Downtown Station Area Plan indicates, at 2040 buildout, the entire
plan area can accommodate substantial new residential and nonresidential growth, as listed
below:
Residential growth: 240 to 1,760 new units.
Office growth: 186,000 to 645,000 square feet of office space.
Retail growth: 383,000 to 531,000 square feet of retail space.
Hotel growth: 290 to 1,400 new hotel rooms.
Considering these anticipated changes, EPS evaluated 4 Monterey Street Corridor sites that have
potential for near-term development, as detailed in the sections below.
Monterey Street Corridor Site #1: Third Street
General Information
The corner of Monterey Street and Third Street is a vacant 0.3-acre site on the periphery of
Downtown where auto-oriented uses transition to more intensive uses indicative of a traditional
small-town Downtown setting, such as high-density residential31 and a mix of commercial uses.
The Third Street site’s land use and zoning designation is dictated by the 2005 Downtown
Specific Plan. This site is designated as Downtown Expansion District, which allows for the
following intended uses: retail, restaurants, cafés, office above ground-floor retail, select
commercial services, visitor-serving hotel, inn, bed & breakfast, and residential above ground-
floor retail.
EPS Assessment
The possibilities for designing an impactful development at this site may be a challenging task.
The Third Street site is located in a transitional area of Monterey Street where the urban form
changes from auto oriented (e.g., deep setbacks, street fronting surface parking) to pedestrian
oriented. Development north of this site is mostly limited to 1-story structures, so there may be
opposition to construct anything beyond 2 stories at this site. Furthermore, the site appears to
be a vacant lot dating back to 2008. Before 2008, the site was used as a surface parking lot.
Perhaps this site was slated for development but stymied by the Recession.
Given nearby densities and the intended uses for this area as indicated by the 2005 Downtown
Specific Plan, a combined café and office coworking space may be a viable opportunity on the
fringe of Downtown Gilroy. There is 1 coworking space in Gilroy, Greenhouse Coworking, located
at Monterey Street and Martin Street. Providing flexible working spaces may allow more Gilroy
residents employed outside the City to work remotely in Downtown. As this concept develops,
31 For context of existing Downtown residential uses, high-density residential describes 3-story
apartment buildings.
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Packet Pg. 116 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 64 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
the space may provide an opportunity for entrepreneurial residents to establish startup
companies rooted in Downtown Gilroy. This concept is aligned with the City’s intended uses for
this area of Downtown to supply cafés and office space along this portion of Monterey Street.
Key Constraints
Generally, coworking spaces occupy vacant office or retail spaces. Significant capital investments
will be required to create a new space from the ground up. This concept may be more viable in a
vertical mixed-use setting with residential uses above the ground floor. Residential
development’s strong economic performance may be able to overcome financial shortcomings.
Monterey Street Corridor Site #2: Fourth Street
General Information
Located just a block away from the Third Street site, the corner of Monterey Street and Fourth
Street is a vacant 0.5 acre site that is in a transitionary area of Downtown. The site is
surrounded by commercial uses and high-density residential.
According to the 2005 Downtown Specific Plan, the Fourth Street site’s land use and zoning
designation is Downtown Historic District, which allows for the following intended uses: unique
street front retail, offices and apartments over ground-floor retail, entertainment, and selected
service uses.
EPS Assessment
Another vacant lot located a block away from the Third Street site, this location may have
greater development intrigue because surrounding uses are denser and may be faced with less
opposition to expand the building envelope to 3 stories at this key corner site. Notably, this
corner acts as the gateway to Downtown’s historic district, where the urban context transitions
from auto-oriented uses to traditional downtown characteristics, lined with retail store fronts and
restaurants. A new development at this site will complete Downtown’s gateway to the historic
district and can generate interest in new developments north of Fourth Street, where new life
and character is needed. Viable opportunities may include a mixed-use development of
residential over retail up to 3 stories in height. Based on surrounding buildings and uses, this
building height should be accepted at this location.
Key Constraints
At this time, no site-specific constraints are identified beyond obvious factors such as initial
capital investments needed to undertake any development project on this site.
Monterey Street Site #3: Arts Center
General Information
The Arts Center Corridor Site is a multiparcel site located at Monterey Street and Seventh Street,
comprising the existing Gilroy Center for the Arts and adjacent parcels currently used as a corner
surface parking lot, a vacant corner property at Eigleberry and Seventh Streets, and a
community garden. The site is positioned catercorner from the proposed HSR station and across
from Monterey Street Site No. 4 (Hornlein Court).
The Gilroy Arts Alliance leases a 5,000-square-foot building, known as the Gilroy Center for the
Arts, on a 2.5-acre City-owned property, which comprises a majority of the Corridor Site. The
2.5-acre City-owned property was intended to be the site of a planned 35,000-square-foot multi-
5.A.a
Packet Pg. 117 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 65 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
use performance and visual arts center; however, the Recession and ongoing lack of capital have
derailed efforts to construct a new facility. Since 2010, the Gilroy Arts Alliance has offered a
portion of the property, known as the Demonstration Garden, to a group of community farmers
where summer harvests are gathered annually and artists have enjoyed outdoor painting and
crafting.
The Arts Center site is located in the Downtown Station Area Plan, which identifies 3 alternative
uses for the site, as listed below:
Alternative 1: Parking and Civic/Public Facility
Alternative 2: Arts Center with Ground-Floor Retail
Alternative 3: Mixed-Use Housing
EPS Assessment
The Gilroy Center for the Arts, in its current capacity, is insufficient for current demands. Articles
cite that events are limited to 49 attendees, hindered by the art center’s building size and code
restrictions. A 2016 Gilroy Dispatch article mentions that Gilroy Arts Alliance members believe
events can draw greater crowds; however, the center’s limitations cannot accommodate larger
events, thereby limiting revenues generated by Gilroy Center for the Arts events.32
Constructing, maintaining, and
operating civic galleries or
museums is a difficult
endeavor, often generating a
deficit. With that in mind, this
site is sizeable enough to
engage additional uses to
offset budget deficits generated
by an expanded arts center.
This presents an opportunity
for the City to engage in a
public-private partnership (P3)
to attract a private party to
develop a revenue-generating
use to offset potential deficits
generated by an expanded arts
center. Adjoining uses may
include a mixed-use housing
development with ground-floor
retail.
Alternatively, as identified in
the Downtown Station Area Plan, this site may be an adequate location for a Downtown parking
structure with ground-floor retail or an art center. Parking may not seem to be an ideal use of
space in a Downtown setting; however, lack of parking may prevent patrons from coming
32 Gilroy Really Needs an Arts Center, March 9, 2016, Gilroy Dispatch.
Public Private Partnership (P3) Basics
P3 is a project delivery method where a public entity engages a
private developer to design, build, finance and potentially maintain
and operate a public facility. P3s are widely used in Canada and
the UK for health care facility and transportation infrastructure
projects. Other examples in the US are provided below.
- Long Beach Civic Center: Plenary/Edgemoor Civic Partners
will construct a $520 million civic center for the Cities and Port of
Long Beach in exchange for land on which the development group
will develop private developments valued at more than $350
million.
-UC Merced 2020 Project: UC Merced partnered with Plenary to
construct a $1.3 billion campus expansion including new teaching
facilities, research laboratories, student housing, faculty offices,
and athletic, dining and student life amenities.
-Chula Vista Bayfront: The Port of San Diego and City of Chula
Vista engaged RIDA Development Corp. to construct a 1,600
room waterfront resort hotel with a 275,000 square foot convention
center. The developer will carry $785 million of debt and equity
while the public team will deliver $300 million in public financing.
5.A.a
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5.A.a
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5.A.a
Packet Pg. 120 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 68 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Under the 2020 General Plan, most of this focus area is designated Industrial Park and General
Services Commercial and Campus Industrial Park. The Alternatives Report indicates that the
existing rural residential development and fragmented ownership make this area less likely to
develop in the short term. The sections below detail the 3 concepts recognized for this area,
including potential residential and employment buildout for the alternatives.
Concept 1: Industrial Park Emphasis
Concept 1 designates much of the focus area as Industrial Park, with an area of Public and
Quasi-Public Facility for St. Louise Hospital and an area of General Services Commercial for
regional shopping, including the Outlets. This concept envisions 0 residential units and
approximately 3,000 jobs for this area at buildout.
Concept 2: Neighborhood District High North of Las Animas Avenue
Concept 2 designates the land north of Las Animas Avenue and west of US 101 as Neighborhood
District High, consistent with the Neighborhood District designation on the west side of Monterey
Street. This concept envisions approximately 1,000 single-family residential units,
1,000 multifamily residential units, and approximately 1,800 jobs at buildout.
Concept 3: Employment Center North of Las Animas Avenue
Concept 3 designates a significant portion of land previously designated Industrial Park as
Employment Center. The Employment Center designation allows for employment development at
a higher intensity than Industrial Park. This concept envisions 0 residential units and
approximately 7,100 jobs at buildout.
EPS Evaluation
In general, EPS’s evaluation of Opportunity Site #1 and Opportunity Site #2 are consistent with
the alternatives identified for this Focus Area.
Opportunity Site #1: Las Animas
At approximately 50 acres, the Las Animas site comprises a large portion of the vacant or
underutilized area of Focus Area 5. EPS’s assessment of either employment center or medium-
density residential uses is consistent with the designations described in the concepts above.
Employment uses can improve the City’s jobs/housing balance, while residential development is
consistent with new developments in this area of the City.
Buildout yields using conservative assumptions demonstrate the site can accommodate
approximately 500 residential units or 1,600 jobs, as indicated in the table below.
5.A.a
Packet Pg. 121 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 69 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Opportunity Site #2: San Ysidro
In all 3 concepts described above, the San Ysidro site is anticipated to be designated as General
Services Commercial, which is practical considering the site’s proximity to the Outlets.
Considered as an ideal location for experiential or other concept retail uses, EPS’s evaluation of
this site is consistent with the proposed General Plan alternatives.
Focus Area 3: First Street Corridor
First Street Corridor Site #1
First Street Corridor Site #2
The First Street Corridor is one of the primary east-west routes through the City. The 76-acre
Focus Area includes the properties fronting First Street between Santa Teresa Boulevard to the
west and Monterey Street to the east. Under the existing 2020 General Plan, a majority of the
corridor is designated as General Services Commercial, with a few parcels designated as high-
density residential. The sections below detail the 3 concepts recognized for this area, including
potential residential and employment buildout for the alternatives.
Concept 1: Mixed-Use Low
Concept 1 designates most of this area Mixed-Use (i.e., 20 to 30 dwelling units per acre and
Floor Area Ratio [FAR] of up to 2.5). Mixed-use development encourages a mix of retail, office,
high-density housing, plazas, and parks. Development under this scenario should be
concentrated at major intersection and should be pedestrian-oriented. This concept envisions
450 multifamily residential units and approximately 600 jobs at buildout.
Concept 2: Mixed-Use High
Concept 2 designated most of this area Mixed-Use High, which would increase the allowable
densities to 20 to 40 dwelling units per acre and FAR of up to 4.0. This concept envisions
530 multifamily units and approximately 750 jobs.
Concept 3: Commercial Focus
This concept retains the existing General Services Commercial at the intersection of Wren
Avenue, which allows for a broad range of commercial uses (e.g., grocery stores, restaurants,
banks, big box stores) and uses with “commercial and industrial” characteristics, such as small
welding shops and automobile sales and services. This concept designates the reminder of First
Opportunity Site #1: Las Animas
Assumed Uses Acres
Gross-to-
Net Ratio
Net
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Sq. Ft. or
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per Sq. Ft.
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DU/Ac. Units
Medium-Density Residential 50 0.85 42.5 12.0 510 - -
5.A.a
Packet Pg. 122 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 70 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Street as Mixed-Use High. This concept envisions 430 multifamily residential units and
approximately 400 jobs.
EPS Evaluation
With the exception of a few large vacant parcels, the First Street Corridor is mostly built out. The
eastern portion of the corridor consists of many small shopping centers catering to the City’s
Latino populations. Discussions with real estate professionals in Gilroy indicate the small
shopping centers experience strong occupancy, and existing property owners have no near-
future plans to sell or redevelop. In addition, many of the shopping centers on the eastern edge,
between Church Street and Wayland Lane, are located on narrow parcels, which may restrict
potential redevelopment.
Moving toward the western portion of the corridor, there are a few large vacant parcels and an
underperforming shopping center that may be suited for development or repositioning,
consistent with the concepts in the Alternatives Report.
In general, while there may not be substantial opportunities for significant development or
redevelopment, the mixed-use, pedestrian-oriented feel envisioned for this corridor will need to
be fostered through urban design improvements to support a multimodal corridor as opposed to
auto-dominant.
The small-scale centers on the east end of this corridor could use façade improvements that
could require some favorable funding arrangements (e.g., grants and low interest loans) from
the City or GEDC, potentially from a revolving loan fund that could be established.
Focus Area 4: Downtown Gilroy
Opportunity Site #4: TVT Site
Tenth Street Corridor Site #1: OSH Site
Monterey Street Corridor Site #1: Monterey and Third Streets
Monterey Street Corridor Site #2: Monterey and Fourth Streets
Monterey Street Corridor Site #3: Arts Center
Monterey Street Corridor Site #4: Hornlein Court
The Alternatives Report indicates significant change is anticipated for Downtown Gilroy. In 2005,
the City adopted the Downtown Gilroy Specific Plan, and the City is preparing the Downtown
Station Area Plan, which will update the Downtown Specific Plan and integrate the future HSR
station. The Downtown Station Area Plan provides site-specific alternative recommendations for
3 plan area concepts. The sections below synthesize information from various sources that are
relevant to the Opportunity and Corridor Sites located in areas covered by either the Downtown
Specific Plan or Downtown Station Area Plan.
Downtown Station Area Plan
The Downtown Station Area Plan includes the areas covered by the Downtown Specific Plan in
addition to the industrial areas located south of Old Gilroy Street and east of the rail line, and
west of Swanston Lane and south of Leavesley Road, adjacent to South Valley Middle School.
The Downtown Station Area Plan expands the Downtown Specific Plan because many parcels are
adjacent to the potential HSR alignment, and the existing uses are more underutilized and have
5.A.a
Packet Pg. 123 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 71 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
more potential for new physical and economic development than in the already established
Downtown.33
The Downtown Station Area Plan evaluates 3 land-use concepts envisioned for the plan area.
Alternative 1 focuses on transit-related development. Alternative 2 emphasizes downtown
development, whereas Alternative 3 focuses on employment uses. All buildout alternatives are
considered in 2 timeframes. The earlier timeframe is based on the assumption the Transportation
Agency for Monterey County (TAMC)’s Capital Corridor extension to Salinas and Caltrain’s
electrification would occur. The later timeframe is based on the assumption that HSR would be in
full operation. Under all alternatives, it is assumed that proposed enhanced regional transit
operations would make Downtown Gilroy attractive to developers, thus prospective for significant
infill development. The table below provides the buildout projections for the 3 Downtown Station
Area Plan alternatives. At this time, the existing Downtown Station Plan Area land uses are not
known to compare the existing and buildout land use alternatives.
The Downtown Station Area Plan updates only portions of the Downtown Specific Plan, and
parcels not specifically identified for new uses in the Downtown Station Area Plan are assumed to
remain the designations identified in the Downtown Specific Plan, prepared in 2005. Of the
Opportunity and Corridor Sites listed above, the following sites are implicated in the Downtown
Station Area Plan:
Opportunity Site #4: TVT Site
Tenth Street Site #1: OSH Site
Monterey Street Site #3: Arts Center
Monterey Street Site #4: Hornlein Court
33 Downtown Gilroy Station Area Plan Alternatives Analysis Report, Public Review Draft, June 15,
2016.
Downtown Station Area Plan Buildout Projections
Item
Alternative 1
Transit Focus
Alternative 2
Downtown
Focus
Alternative 3
Employment
Focus
Total Dwelling Units 1,900 2,400 1,600
Commercial Square Footage 400,000 490,000 600,000
Office Square Footage 650,000 200,000 1,000,000
Hotel Rooms 400 300 1,400
Industrial Square Footage 50,000 - -
5.A.a
Packet Pg. 124 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 72 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
The sections below detail each site’s alternative designations and are followed by a review of how
the planned alternatives correspond to the City’s economic goals.
Opportunity Site #4: TVT Site
The TVT Site is not part of the 2005 Downtown Specific Plan. The City’s 2020 General Plan
indicates the site is designated for General Services Commercial uses. This site is included in the
Downtown Station Area Plan and is deservingly included because the site has market attraction
on the periphery of a TOD and has high freeway visibility. As mentioned in this chapter, the
Downtown Station Area Plan identifies 3 land use alternatives for this site, as listed below:
Alternative 1: Retail and long-term HSR parking
Alternative 2: Retail
Alternative 3: Hotel
EPS Evaluation
EPS agrees with the City’s concept of designating this site for visitor-serving uses, such as a
hotel. The site is attractive for automobile bound travelers and for future HSR users. Retail uses
should be scaled to serve a hotel at this site. The intent of the Downtown Station Area Plan
should be to draw patrons to Downtown’s core, so retail uses on this site should be
complementary to a hotel, such as a restaurant or café.
Tenth Street Site #1: OSH Site
The OSH Site is positioned just outside of the 2005 Downtown Specific Plan boundary. The City’s
2020 General Plan indicates the site is designated for General Services Commercial uses. This
site is included in the Downtown Station Area Plan and should be considered a key component to
create a TOD east of the HSR station. The Downtown Station Area Plan identifies 3 different land
use development alternatives for this site, as listed below:
Alternative 1: Hotel
Alternative 2: Mixed-Use Housing with Ground-Floor Retail
Alternative 3: Office with Ground-Floor Retail
EPS Evaluation
Successful TODs generate places where people live, work, and play, have direct access to a
greater regional economy, and enable residents or employees to live car-free or less auto-
dependent. A crucial component of supporting these goals is to supply housing in amenity-rich
locations that have a sense of place and diversity of uses. Early Downtown TOD needs to
consider that transit projects in the pipeline will provide more efficient access to job centers in
the Silicon Valley and San Francisco Bay Area.
The OSH Site and surrounding parcels should be considered as a way to expand Downtown from
a single corridor to comprising distinct districts. The existing 2005 Downtown Specific Plan’s
intent was to create several Downtown districts; however, Downtown remains a small stretch
running along Monterey Street. Anchored by high-density housing, this node can increase
Downtown’s population to support additional uses such as retail, entertainment, and employment
uses.
5.A.a
Packet Pg. 125 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
Gilroy Place-Based Economic Development Strategy
Public Review Draft Report December 4, 2018
Economic & Planning Systems, Inc. (EPS) 73 P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Reports\182020 Public Review r1 12-04-18.docx
Monterey Street Sites #3 and #4
The Arts Center and Hornlein Court sites are considered together because they are located
across the street from each other and have similar site attributes. Both sites are located in the
existing Downtown Specific Plan. The Arts Center is located in the Civic/Cultural Arts District,
whereas the Hornlein Court site is located in the Downtown Historic District.
Looking forward, both sites are located in the Downtown Station Area Plan with the intended
uses listed below.
Monterey Street Site #3: Arts Center
Alternative 1: Parking and Civic/Public Facility
Alternative 2: Arts Center with Ground-Floor Retail
Alternative 3: Mixed-Use Housing
Monterey Street Site #4: Hornlein Court
Alternative 1 & 3: Mixed-Use Housing
Alternative 2: Parking and Mixed-Use Housing
EPS Evaluation
Together, these sites have potential to become significant placemakers in Downtown Gilroy. Both
sites have underutilized portions, including vacant parcels, surface parking lots, and an obsolete
street segment. Both sites comprise City-owned property that should be leveraged for future P3
opportunities.
These sites demand significant roles in Downtown’s future, considering they are located within a
block of the future HSR station. Based on these attributes, EPS validates some of the City’s land
designation options for these sites, including an arts center and mixed-use housing. In addition,
EPS supports the idea of a P3 concept to include a parking structure, housing, and cultural arts
center. EPS understands the subject of a Downtown parking structure is a controversial topic;
however, additional parking will be demanded in the future as Caltrain operations increase and
eventually when HSR begins operation. A broader parking strategy in Downtown may be
warranted to maximize the streetscape along Monterey Street. As Downtown progresses into a
live/work/play destination, additional parking will be needed and space will be a premium,
therefore, requiring consideration where to place future parking structures.
Monterey Street Sites #1 and #2
Mentioned above, the Downtown Station Area Plan updates only a portion of the Downtown
Specific Plan, and parcels not specifically identified for new uses in the Downtown Station Area
Plan are assumed to remain the designations identified in the Downtown Specific Plan, prepared
in 2005. The Downtown Station Area Plan does not indicate any changes for the Monterey Street
sites at Third and Fourth Streets; therefore, these sites’ designations are dictated by the existing
Downtown Specific Plan.
EPS’s assessments for these sites are consistent with existing Downtown Specific Plan
recommendations. These 2 sites are lone vacant parcels in Downtown, and given that the sites
are both around 0.5 acres and on the periphery of Downtown, the impact of these sites are
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be a major driving force within the next decade. While factors such as recalcitrant land owners
with an inflated sense of property value are a major constraint, the risk inherent in
redevelopment is equally problematic. Furthermore, despite the attractiveness of HSR coming
through Gilroy’s Downtown, anecdotally, property owners are apprehensive about investing in
Downtown until plans indicate real property acquisition and subsequent effects on surrounding
areas. The City should continue efforts to coordinate right-of-way acquisition and property
disposition efforts to effectively inform Downtown stakeholders. Table 4-3 below provides an
illustrative example of how risk plays into such decisions. Simply put, after considering the risk
associated with new uses, a legacy use producing even modest net cash flow may easily produce
a similar Net Present Value (NPV) compared to an expensive and risky redevelopment project
featuring much higher annual cash flow and sale value in the final year. This is due to increased
risk as reflected by a higher discount of future revenue, in contrast to the known parameters of
an ongoing business operation.
While most business operators may not evaluate the comparison through a formal analysis of
risk factors, the above-referenced example is indicative of the fundamental dynamics at work.
Also indicated above is the deleterious effect on NPV from only a 1-year delay in starting
construction. Thus, to meet absorption and employment goals as set forth in the GPU, it will be
imperative to ensure that front-end costs are controlled, and uncertainty regarding entitlement
timelines and other City-related factors is minimalized. By doing so, the City can influence more
adaptive reuse and infill projects to move forward on a timely basis.
Gilroy East of US 101
Opportunity Site #3: Southpoint Business Park
Opportunity Site #5: Rancho San Ysidro
Opportunity Site #6: Gilroy Crossing/Regency Phase II
Much of Gilroy east of US 101 is not included in an Alternatives Report Focus Area. Furthermore,
the Alternatives Report does not indicate any significant land use designation changes for these
areas. Presently, these areas are designated as intense single-use employment-driven land use
designations, particularly General Services Commercial and General Industrial. A majority of the
City’s remaining vacant and developable areas are located on this side of town. For various
reasons, including lack of market demand and excessive cost burdens, developers remain
disinterested in these areas.
EPS Evaluation
The City’s current policies and proposed land use alternative designations promote archaic
single-use development projects. Much of the City’s existing vacant land supply is restricted to
single-use development types such as retail and industrial uses. Retail and industrial uses are
important for the City’s economic prosperity, providing sales tax revenues and supporting the
City’s job base. However, empirical studies indicate that mixed-use developments, including
residential uses, compared to typical single-use suburban development patterns, yield greater
benefits such as reduced traffic congestion, lower infrastructure and municipal service costs,
increased tax revenue, and improved development pro forma performance.
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DRAFTTable 4-3City of GilroyPlace-Based Economic Development StrategyIllustrative Example of Net Present Value DynamicsItem123791011Existing BusinessNet Operating Income [1]$95,000 $97,850 $100,786 $113,435 $120,343 $123,953 $1,239,535Net Present Value (NPV) @ 5% discount$1,633,539New Development Project [2]Building Demolition$76,000$8/SFPredevelopment/Permits$100,000working assumptionSite Prep/Other$150,000working assumptionShell/Other$1,920,000$120/SFTotal $2,246,000Normal Entitlement Processing PeriodNet Cash Flow($2,246,000) $329,600 $339,488 $382,097 $405,366 $6,756,107$0NPV @ 15% discount rate$1,283,754Protracted Entitlement Processing Period [3]Net Cash Flow($326,000) ($1,977,600) $339,488 $382,097 $405,366 $417,527 $6,958,790NPV @ 15% discount rate$1,115,779npv[1] Some years have been hidden for printing purposes.[2] Triple net lease @ rate per year: $ 10 SF = 9,500[3] Triple net lease @ rate per year: $ 20 SF = 16,000[4] Illustrative example excludes annual carry.Note: example is purely hypothetical to illustrate effect of risk, dicount rate, and Net Present Value (NPV).Year [1]Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2765.A.aPacket Pg. 129Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Traffic Impacts
The Federal Environmental Protection Agency (EPA) partnered with transportation planning and
engineering firm Fehr & Peers to compare traffic generation rates resulting from mixed-use and
single-use developments. Fehr & Peers’ analysis reveals that standard methods of traffic impact
analysis understate the traffic benefits of mixed-use developments, leading to exaggerated
roadway impacts, facility oversizing, and higher impact fees than should be the case, in effect
discouraging mixed-use projects. Fehr & Peers tested this notion by employing household travel
surveys in 239 mixed-use developments in Seattle, Portland, Sacramento, Houston, Atlanta, and
Boston. Fehr & Peers’ study indicated that mixed-use developments were found to reduce traffic
impacts relative to a single-use suburban development because diverse on-site uses capture a
large share of internal automobile trips.34 In other words, patrons or residents make fewer
automobile trips because they are able to access various uses in a clustered location, such as
retail shopping, personal services (e.g., salons, laundry, banks), dining, and more. In addition,
mixed-use developments tend to comprise other characteristics that reduce automobile trips,
such as having good transit access that generates a high share of walk and transit trips, and
central locations that reduce trip lengths.
Fiscal Impacts
In 2013, Smart Growth America contracted economic and planning consulting firm Strategic
Economics to prepare a study to examine the fiscal benefits of smart growth developments
(i.e., mixed-use development patterns) and to compare the fiscal and economic impacts of smart
growth development patterns to traditional suburban developments. Through peer review
analysis and conducting interviews with municipal leaders, Smart Growth America’s study
concluded that smart growth developments, in comparison to traditional suburban development
patterns, require one-third less up-front infrastructure costs, save municipalities an average of
10 percent on ongoing delivery of services (e.g., police, ambulance, fire services), and generate
10 times more tax revenue per acre. As municipal budgets continue to be strained, it is apparent
that land use policies should be revised to reduce municipal service and infrastructure
development costs, while increasing tax revenues.
Development Pro Forma
Prevailing development economic conditions demonstrate that residential development is
superior to commercial development in most contexts. Fueled by staggering job growth in the
Silicon Valley and Bay Area, housing values have skyrocketed as the supply has not kept pace
with the surge of people moving to the region for work opportunities. The market analysis
provided in Chapter 3 of this report indicates that commercial and industrial rental lease rates in
Gilroy have not kept pace with the region; however, housing lease rates and sales prices have
steadily increased in the past several years. Diversifying development opportunities, including
the provision of residential development, should be considered on the remaining large vacant
parcels in Gilroy to acknowledge residential development’s economic strength. Carried by the
economic strength of housing, mixed-use industrial tech development may be a viable
development opportunity, whereas development returns may not be substantial if developed as a
single-use project.
34 MXD Mixed-Use Development Trip Generation, Fehr & Peers.
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Gilroy Gardens and Sports Park
Opportunity Site #8: Gilroy Gardens
The City’s land use designation for this site does not appear to have any proposed changes from
the 2020 General Plan, which indicates the site is designated as Visitor-Serving Commercial.
EPS’s assessments do not conflict with this designation.
Opportunity Site #9: Sports Park
Similar to Opportunity Site #8, the City’s land use designation for this site does not appear to
have any proposed changes from the 2020 General Plan, which indicates this site is designated
as Park and Recreation Facility. As demonstrated in EPS’s evaluation, the potential opportunities
for this site do not conflict with the City’s plans.
Land Needs Evaluation
Critics of the City’s UGB measure assert that the City does not have adequate land supply to
accommodate growth scenarios indicated in the City’s Alternatives Report. ADE’s 2014 report
indicates there are approximately 450 acres of vacant industrially zoned land in the City. The
Alternatives Report provides various scenarios of new growth capacity on vacant or underutilized
land; however, the report does not illustrate where and how much of the land evaluated is
underutilized compared to vacant. Therefore, EPS established the approximate vacant land for
employment uses (i.e., industrial, office, retail) based on the estimate provided in the 2014 ADE
report.
EPS estimated the amount of land that may be required to accommodate employment uses
through 2040 based on 3 scenarios, listed below:
Historical Growth Estimates. EPS prepared an estimated projection of commercial and
industrial growth based on the average annual construction deliveries in the past 10 years.
Association of Bay Area Governments Employment Projections. EPS prepared an
estimated projection of commercial and industrial growth based on Gilroy’s 2015–2040
employment projections, prepared by the Association of Bay Area Governments (ABAG).
ADE/Emsi Projections. EPS prepared an estimated projection of commercial and industrial
growth based on Gilroy’s 2015–2040 employment projections indicated in ADE’s 2014 report.
As shown in Table 4-4, it appears the City has adequate land to accommodate employment
growth through 2040 for Scenario 1 and Scenario 2. The employment projections in Scenario 3
are significantly more bullish than the projections prepared by the ABAG. Given this aggressive
employment growth scenario, the City may not have adequate available land to realize Gilroy’s
employment growth.
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DRAFTTable 4-4City of GilroyPlace-Based Economic Development StrategyEstimated Land Needs for Employment UsesIndustry10-Year Avg. Annual Delivery [1] [2]20-Year Estimated NeedEstimated FAREstimated NeededLand [3]2015-2040 Job IncreasesSq. Ft. per Employee [5]Needed Sq. Ft.Estimated FAREstimated NeededLand [3]2015-2040 Job IncreasesSq. Ft. per Employee [5]Needed Sq. Ft.Estimated FAREstimated NeededLand [3]bldg. sq. ft. bldg. sq. ft.acresbldg. sq. ft.acresbldg. sq. ft.acresIndustrial/R&D [6]50,000 1,000,000 0.30 80 420 1,500 630,000 0.30 50 2,340 1,500 3,510,000 0.30 270Office [7]0 0 0.35 0 2,480 700 1,736,000 0.35 110 4,224 700 2,956,800 0.35 190Retail [8]25,000 500,000 0.25 50 300 550 165,000 0.25 20 3,353 550 1,844,150 0.25 170Total Acres Needed130180630land needsSource: CoStar; EPS.[1] Rounded to the nearest 5,000 square feet.[2] See Table 3-1, Table 3-5, and Table 3-8.[3] Rounded to the nearest 10 acres.[4] Based on Table 4 indicated in the City's General Plan Advisory Committee memorandum titled, "Holding Capacity and Projections Comparison."[5] Square feet per employee based on Table 6 from the City's GPAC memorandum titled, "Holding Capacity and Projections Comparison."[6] Job Increases: Includes Manufacturing, Wholesale/Transportation, and Other.[7] Job Increases: Includes Financial/Professional and Health, Education, and Recreation.[8] Job Increases: includes Retail.Scenario 1: 10-Year Historical Growth Basis Scenario 2: ABAG Future Employment Forecast Basis [4] Scenario 3: EMSI/ADE Employment Forecast Basis [4]Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2795.A.aPacket Pg. 132Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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5. RECOMMENDED INCENTIVES AND NEXT STEPS
Gilroy features a broad range of market opportunities, like continued realization of food and
entertainment in the Downtown, expansion of sports-related tourism, improvement of tourism
linkages to the Monterey Region, further interest among advanced manufacturing and Silicon
Valley administration/services, and continued demand for small-scale manufacturing being
squeezed out of peripheral markets. Over time, rail-based travel to and through Gilroy will be
vastly increased. There is strong demand for workforce housing in walkable and quality design
format integrated with public space and retail/services amenities.
Expected uses over the coming decade include a variety of facilities, including major owner-user
manufacturing and assembly, multitenant spec divisible to 2,500 square feet (rental),
multitenant or small-scale condos similar in scale to speculative R&D/industrial, supportive
commercial uses adjacent to the Outlets, potential mixed-use innovation centers including
housing east of US 101, multisegment hotel(s) associated with various P3 opportunities,
expanded sports and recreational concepts for Sports Park and Gilroy Gardens, station area
mixed-use development including mixed-income residential, and refurbished older centers in
areas such as the First Street Corridor where new development may be less feasible and the
centers are still needed to service the local population.
Gilroy has high uncertainty in its development environment that contributes to high risk. Critical
constraints include issues related to traffic, agricultural mitigation, market viability, and planned
land use polices. Community attitudes toward growth have limited the available land supply and
held densities down. By improving land supply, speed to market, the allocation of infrastructure
and utilities improvement costs, and reducing community opposition, speculative development
providing immediate opportunity for small- and medium-sized business is likely to become more
feasible. Simply put, a 2-pronged strategy of facilitating a healthy mix of uses while reducing
the front-end time and cost burdens should be sufficient to stoke investment and growth. The
following section represents a sequence of actions intended to put the City on track in terms of
realizing its economic potential and pursuing a sustainable fiscal regime. In general, the City
should be inclined to consider incentive packages when projects offer high concentrations of
employees, generate sales tax, occupy a strategic sector representing or contributing toward
export cluster-related growth, or make a major urban form improvement. Where 1 or more of
these conditions exists, the City should be more inclined to offer incentives when a clear need
has been demonstrated.
The incentives discussed below are presented in major categories with more detailed suggested
mechanisms and tactics discussed as appropriate.35
35 This initial rendition of suggested alternatives is intended to facilitate internal discussion of
several potential major policy shifts in addition to more typical incentives generally pursued in
various forms by jurisdictions. To the extent more or less emphasis is sought on the following
topics, it is anticipated that supplemental analysis will be targeted. The sweeping nature of
these suggestions facilitates subsequent efforts to develop more detailed timelines and tactical
responsibility discussions as an outgrowth of this report.
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Activate East Side Commercial/Mixed-Use Districts
As discussed in Chapter 4, the estimated 450 acres of vacant industrial land supply in Gilroy is
likely insufficient to accommodate more aggressive growth forecasts, necessitating use of
underutilized areas throughout the City. Without question, the reuse and intensification of
underutilized areas is a critically important initiative for the City—in particular, the City needs to
address the entry experience one has when arriving in town via SR 152 and US 101 from all
directions. However, factors such as inflated land value expectations and excessive financing
risk work to ensure that transformation of such districts is slow and arduous. A methodical
approach to the transformation of such districts through Specific Plans in some cases can ensure
that valuable, fine-grained industrial operations are supported and maintained as a valuable part
of the City’s small business base.
To fulfill Gilroy’s potential to evolve into an intermediate “hub” economy, based on its strong
geographic position in the greater region, improved unencumbered land supply is needed to
provide a less risky and expensive nonretail commercial land market. To provide this
environment, available evidence suggests that factors such as interconnections among larger
parcels, related costs, and practices around funding requited transportation mitigations are as
important as improved quantity of acreage.
More specifically, Gilroy has historically kept the east side of US 101 as nearly exclusively
commercial, dominated by M2 and more flexible CM zoning. The area suffers from an irregular
pattern created from historical piecemeal development, resulting in illogical infrastructure and
public services patterns, resulting in an unattractive, difficult to access, and confusing condition
that undermines Gilroy’s competitive position on the US 101 corridor. These conditions result in
difficulty financing needed extensions because of market uncertainty, based on a lack of
continued viable supply, which is needed to provide reimbursements to developers fronting the
costs of major infrastructure items.
Nearby Morgan Hill has similarly suffered from slow absorption among single-use parcels.
However, the recent reconsideration of the General Plan designation established for the parcel
located on the northwest corner of Cochran Road and US 101 has provided for a mix of
manufacturing, commercial, and residential development, and the site is reportedly receiving
strong interest among developers. As discussed and illustrated earlier, the economic strength
lent to a project as a result of including housing can increase residual land value, therefore
expanding the bonding capacity related to land-secured financing. Residential land in Gilroy is
typically valued at more than $30 per square foot, as opposed to about a third of this for the
most well located M2 and CM lands.
East Side Mixed-Use Benefits
The City would be well-advised to consider new approaches to the development of larger parcels
on the east side of US 101, facilitating greater investment in a shorter time than would otherwise
occur. It should also look to revise the City’s eastern boundary to provide a more regular
configuration of parcels, providing a smoother urban boundary better able to accommodate jobs-
producing development at a reasonable cost. In addition to improvements in land value and
urban form, such sites also have proximity to central Gilroy and will benefit from connections to
HSR and other amenities, providing an increased base of market support to Downtown.
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Increasingly, prospects for attracting high-quality employment space capable of accommodating
a larger and more diverse job base relies on the inclusion of housing in the project. Indeed,
recent examples of innovation districts increasingly integrate housing as an important part of the
land use mix. Past economic analyses of this use by EPS underscores the role housing plays in
such projects. The Mace Ranch Innovation Center in Davis was able to generate an acceptable
return on investment with the inclusion of a town center residential concept. When the Davis
City Council rejected the inclusion of housing, the project was put on hold, based on resulting
feasibility concerns.
The inclusion of housing as a central strategy to capturing key technical and creative elements of
the labor force is prevalent across the United States. For example, another housing-inclusive
innovation center being positioned for agricultural-technology uses is the Syngenta Innovation
Center, being created in Research Triangle Park in North Carolina.
Overall it is recommended that the GPU be supportive of residential development (types to be
determined) through development of Specific Plans or other regulatory frameworks going
forward. Larger parcels may be well-positioned as mixed-use innovation centers with a primary
focus on job creation but allowing housing as a component of the overall land development value
proposition. More specifically, EPS makes these recommendations:
Allow residential in support of mixed-use/innovation center projects East of
US 101. EPS recommends pursuit of an innovation center concept for Opportunity Sites #3
and #5.
Pursue policy changes to allow infill parcel development to facilitate efficient land use,
infrastructure, and services.
Develop connecting roadways East of US 101 to facilitate improved circulation.
Review financing policies to improve development economics.
Public Policy/Finance Solutions: Improving Front-End Cost Burden and Overall
Feasibility
Since the passage of Proposition 13, public agencies have looked to new development to fully
fund the cost of expanded and new public infrastructure required to serve such development.
This policy has seemed reasonable, but in some ways, also may create impediments to economic
development in some communities with significant public infrastructure needs. For Gilroy, traffic
circulation presents a significant cost burden for new development, not only in regards to the
amount of the Traffic Impact Fee, as shown below by Table 5-1, but in regards to the specific
financing approach in play.
Development impact fee (DIF) programs have been designed to reimburse developers for
constructing offsite improvements benefitting other landowners. If new development is slow and
uneven over time, there is less incentive for developers to fund infrastructure improvements.
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DRAFTTable 5-1City of GilroyPlace-Based Economic Development StrategyIndustrial Traffic Fee Comparison [1]Item GilroyFremont [2]LathropManteca [3]CitywideCitywide East Lathrop CitywideTraffic Impact Fee per 1,000 Sq. Ft.$5,069$2,666$1,431$1,495traffic feeSource: City of Gilroy; City of Fremont; City of Lathrop; City of Manteca.[1] Reflects transportation/traffic fees controlled only by the local jurisdiction and does not include county or regional transportation fees.[2] Reflects fees for manufacturing. Fee rates for Light Industrial are $3,839/ksf, and fees for R&D are $3,803/ksf.[3] Reflects fees for Industrial Park/R&D.$0$1,000$2,000$3,000$4,000$5,000$6,000Citywide Citywide East Lathrop CitywideGilroy Fremont [2] Lathrop Manteca [3]Traffic Fee per 1,000 Sq. Ft.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2835.A.aPacket Pg. 136Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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If Gilroy could implement supplemental or additional financing mechanisms to augment cash flow
for reimbursement programs, there may be greater incentives for developers to invest in offsite
infrastructure improvements and encourage preferred economic development efforts.
A variety of “tools” available to Gilroy should be considered that could enhance the efficiencies of
existing infrastructure financing programs, such as DIFs. The City has previously formed a
Mello-Roos Community Facilities District (CFD) to fund improvements for SR 152. Properties
included in this CFD are repaying bonded debt that funded required improvements.
When approaching public financing of critical public infrastructure, it will be useful to consider the
employment of a variety of tools to allow the City to fund near-term and long-term infrastructure
improvement goals. Some funding mechanisms provide near-term funding opportunities (CFDs,
Assessment Districts [AD], etc.), while other mechanisms provide long-term funding
opportunities (tax increment funding, presently in the form of Enhanced Infrastructure Finance
Districts [EIFD]).36 These tools, along with DIFs, serve as a 3-pronged approach to public
infrastructure financing post-Proposition 13.
The 3-pronged approach was intended to develop reliable cash flow for infrastructure
improvements over a buildout period. Concepts presented below are intended to enhance cash
flow opportunities to incentivize developers to construct critical infrastructure with relative
assurance that reimbursement for offsite improvements could be reliably considered in their
pro forma for a development project.
Interchange and Roadway Capacity Solutions
A majority of Gilroy’s Opportunity and Corridor Sites are left vacant or underutilized because,
under current City and State policies, new or intensified development in these locations will
trigger the need for costly traffic mitigation measures. Developers are obligated to front the
costs of offsite traffic improvements to meet roadway or intersection LOS standards, and often,
the required improvements are greater than the project’s fair share of impacts.
The City’s Traffic Impact Fee program is a mechanism for developers to either pay into a fee
program for their project’s fair share of impacts or to be reimbursed for fronting costs beyond
their project’s obligation. The reimbursement mechanism relies on nearby new development
mutually requiring the constructed improvements to pay for its fair share of impacts as a means
to reimburse the initial developer. Developers are reluctant to proceed with development plans in
a tepid real estate market, realizing that reimbursements may not materialize fast enough,
therefore, sinking a project’s pro forma cash flow.
The City, County, and other partners are undergoing studies and initial steps to make significant
improvements to SR 152 and SR 25. The multiagency team will improve the US 101/SR 25
interchange south of the City and will reroute portions of SR 152 to divert regional and freight
traffic away from SR 152 into the eastern side of the City. These improvements, along with
billions of dollars in other traffic improvements indicated in Table 5-2, should be considered
when evaluating traffic impacts of development on the Opportunity and Corridor Sites. To the
36 See Table D-1 in Appendix D for a comprehensive description of these and other potential
financing tools available for use in Gilroy.
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extent these projects do not have a great enough impact to rescind some needed improvements,
innovative techniques to reduce citywide congestion should be considered.
Modifying LOS Standards
The City may be able to relieve this development constraint by taking a different approach to
address citywide traffic mitigation. Instead of applying the status quo of expanding roadways to
improve LOS, some California cities are addressing traffic mitigation by developing Multimodal
Improvements Plans (MIP) to holistically improve mobility networks. Using this emerging
approach, municipalities ameliorate the transportation network by making improvements for all
mobility system users, including automobiles, transit providers, pedestrians and bicyclists.
In 2015, the City of Mountain View initiated work to prepare a MIP to comply with the VTA’s
Congestion Management Plan (CMP). The CMP is mandated by State law and is maintained for
the County by VTA. The CMP is a comprehensive transportation improvement program with the
goal to reduce traffic congestion, improve air quality, and inform land use decision making. The
CMP identifies major intersections monitored for congestion with LOS standards set by the CMP
statute. According to CMP legislation, if a city fails to meet LOS standards for one or more of
these intersections, it risks forfeiting gas tax allocations from the State. Based on analyses of
Mountain View’s 2030 General Plan growth, several intersections would fall below the CMP LOS
standard.
Typically, LOS standards are achieved through street widening to increase traffic capacity.
Through the Mountain View 2030 General Plan’s policy direction, Mountain View does not support
street widening as a traffic congestion relief strategy. Reasons include limited space for
additional right-of-way, negative impacts on active transportation modes, induced traffic
demand, and other issues related to Mountain View’s desired future character. Therefore,
Mountain View directs future efforts to include transportation demand management, operational
improvements, and multimodal improvements.
The VTA supports multimodal policies and programs instead of street widening, as long as those
policies are indoctrinated in a MIP to document existing and future efforts to address increased
congestion. If the MIP is adopted and approved by the VTA, municipalities will be in conformance
with the CMP, even if intersections fall below the LOS standard.
The City should engage Caltrans, VTA, and other stakeholders to consider a similar approach to
ameliorate traffic issues that currently impede potential development opportunities. City
environmental review documents indicate development on several Opportunity and Corridor Sites
will trigger costly roadway improvements. Implementation measures in a MIP may require
developer contributions to travel demand management programs, which may be in the
magnitude of thousands of dollars compared to million-dollar intersection or roadway
expansions. These measures will have mutual benefits for the City and developers by putting
forth a plan to achieve greenhouse gas reductions by reducing vehicle miles traveled, while
reducing developer risk by streamlining off-site mitigation costs.
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DRAFTTable 5-2City of GilroyPlace-Based Economic Development StrategyFuture Infrastructure InvestmentsProjectLead Agencies Estimated AmountEstimated CompletionDescriptionState Route 152 Trade Corridor ProjectVTA, Caltrans, Santa Clara and San Benito CountiesTBD [1] TBD The project will realign SR 152 between US 101 and SR 156. The project will include improvements to the US 101/SR 25 interchange, SR 152/SR 156 interchange, and segments of SR 152 through the Pacheco Pass. The intent is to divert regional traffic away from severely impacted segments of SR 152 to Gilroy. This improvement will improve regional traffic; however, it may divert pass-through visitors away from Gilroy establishments.First Street/State Route 152 ImprovementsCaltrans, City of Gilroy$14.1 million (2017) 2020 The California Transportation Commission approved $14.1 million to repave portions of SR 152 from US 101 to approximately 750 feet west of Santa Teresa Boulevard.US 101/10th Street InterchangeN/A $3.6 million (2013) TBD The project will add a second lane on the off-ramp. VTA's Project Scope, Status, Cost and Budget open data indicates the project has not begun, and no funds have been allocated.Caltrain Electrification/HighSpeed Rail - San Jose to GilroyCaltrain, CA HSR $2.2 - $4.8 billion (2017)2026-2027 CA HSR and Caltrain will partner to expand elecrification of the Caltrain corridor south of San Jose to Gilroy. The investment shown reflects the total costs of the segment from San Jose to Gilroy.High Speed Rail - Gilroy to Carlucci RoadCA HSR $8.2 - $13.3 billion (2017)2029 Investment reflects the costs to extend the HSR from Gilroy through the Pacheco Pass to the Central Valley.investmentsSource: SB 1 Program Application Transmittal Sheet, California Transportation Commission; Draft Revised 2018 Business Plan, California High Speed Rail Authority; Gilroy Patch.[1] California Transportation Commission indicates the cost of the US 101/SR 25 Phase 1 interchange improvements will cost approximately $65 million (2018). EPS did not find costs for the entire project.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2865.A.aPacket Pg. 139Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Public Finance Solutions
High fees and other costs of doing business should be reduced to the extent they are under the
City’s control and the recipients offer needed community benefits. Any disadvantage in this
regard to competing jurisdictions peripheral to Silicon Valley will result in lost market share
based on reduced development feasibility among owner-users and speculative developers alike.
Some initial observations follow.
To the extent possible, infrastructure costs should be distributed on a larger base than is
currently possible given the City’s land inventory. Fee waivers and deferrals should be
considered for projects that offer specific benefits, though it should be noted that fee waivers
and deferrals come at the expense of fully funded infrastructure financing plans and should be
considered along with implementation of potential “backfill funding opportunities” discussed
further below.
To the extent some capital improvement project (CIP) infrastructure costs are attributable to
existing development, the City should evaluate citywide measures that would provide
infrastructure financing opportunities for all benefiting land uses. A general obligation (GO) bond
measure addressing critical infrastructure needs could help to reduce the overall costs of new
development. Since the passage of Proposition 13 most jurisdictions have required only new
development to fund infrastructure expansion. Expansion or upgrading of existing infrastructure
likely benefits both existing development as well as new development. Opportunities to seek
funding solutions that include existing development should be considered. In considering such
financing mechanisms that include a cost to existing development it becomes important to
provide a public education program that shows benefits that accrue to all residents. Enhanced
property values will allow for increased public services which benefit the community as a whole.
Fee waivers or deferrals could primarily be tied to certain economic attributes such as high
employee density, preferred development consistent with community goals, high revenue
generating land uses that do not otherwise overwhelm existing public infrastructure or public
safety considerations.37
The City’s development impact fee program should be carefully reviewed with an eye to
shortening the length of time for reimbursing developers that “front” out-of-pocket costs that
benefitting other undeveloped properties. This dynamic causes hesitancy on the part of
developers who trigger infrastructure upgrades as a result of their project causing an identified
LOS or other identified threshold to be crossed. To expedite the reimbursement, the City could
use land-secured financing (CFDs and ADs), but the project sites tend to be relatively small and
not conducive to stand-alone districts. Placing them into a larger district presents its own
problems with cross-collateralization between projects (project timing being a big factor).
Land-secured financing districts such as CFDs and ADs could be formed to advance fund DIFs in
order to enhance the cash flow of DIFs for reimbursement to developers that build critical
infrastructure, or to fund critical infrastructure improvements. The Statewide Community
Infrastructure Program (SCIP) uses a pooled financing of DIFs across multiple jurisdictions two to
three times a year which makes for a more efficient issuance of debt (spreading issuance costs
37 Before implementation of this or other potential incentives, the City is advised to evaluate any
potential effects on the possible impact on prevailing wage requirements.
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across multiple projects in multiple jurisdictions).The City could leverage existing tax streams as
incentives to encourage economic development through tax sharing agreements with sales
and/or property tax to reimburse developers near-term for infrastructure improvements and then
getting reimbursed for the City’s investment with DIFs:
Projects anticipated to generate significant sales tax or assessed values may be targeted to
channel a portion of tax revenues created over a specified period to time to reimburse
developers for infrastructure projects that provide benefit to a broader geographical area
than development project itself.
Tax increment tools (e.g., EIFD38) should be included in the mix, but with the understanding
that tax increment returns are longer term. Tax increment could be seen as taking out
earlier financing revenue streams (e.g., land-secured financing and tax sharing agreements).
Tax increment revenues could be used in-lieu of DIFs to acquire infrastructure improvements
from developers. Future collections of DIFs could be used to reimburse the City’s earlier
contributions, be credited towards infrastructure in the DIF program to reduce future fees, or
to serve as the local contribution towards fee deferrals and waivers. Some CIP components
are prioritized as future needs once major infrastructure items have been funded and
constructed. Tax increment financing is a useful source of financing of such future priority
items:
— Land-secured financing could also be limited in term and designed to finance DIFs over a
shorter period than a traditional CFD. Instead of a 20-30-year repayment, the term
could be shortened without going to the municipal bond market. In some instances,
these funding mechanisms can be used fund improvements from the cash flow of special
taxes or assessments on an annual basis, thereby reducing financing costs. The revenue
stream could be monetized using COPs providing a lower cost of issuance to shorten the
payback period and overall cost of financing. Tax increment revenues from an EIFD may
take up to ten years to mature into an efficient infrastructure debt financing vehicle with
debt secured solely with tax increment revenues. A CFD could be formed over all or
portions of an EIFD to serve as the debt issuance structure. In early years during which
tax increment revenue is minimal, a special tax under a CFD could fund the annual debt
service payments until tax increment revenue is sufficient to make debt service payments
under a CFD. COPs secured by other dedicated City revenues, such a DIFs, could also
provide early funding structure until tax increment revenues are sufficient to pay debt
service on the COPs.
38 There is an ability to utilize EIFD or other tax increment approach toward offsetting major up-front
infrastructure and similar costs relating to various projects. The improvements enabled by an EIFD
enhance assessed values and sales tax revenues, providing incremental benefits to both the City and
County. To the extent an EIFD is proposed to remedy circulation and other challenges associated with
major projects including the Opportunity Sites east of US 101, the City should evaluate the potential
to work with the County to establish a more powerful EIFD with a larger amount of property tax
increment (both City and County share of the 1 percent ad valorem tax) to underwrite a larger
amount of debt than would be possible using only the City’s property tax increment.
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Reduction of locally controlled taxes or fees could be included as means of reimbursement for
cost of constructing offsite public infrastructure. The utility users tax may be a useful tool for
such reimbursement if the City could reduce or temporarily waive the utilities users tax to
reimburse costs for a developer.
DIF programs could be structured to allow for deferred payment of fees based upon projected
development revenue streams from a project or waived entirely for certain projects bringing
desired jobs or other community investments. Holes left in fee programs should be filled
with identified sources of future revenues, such as tax increment.
Overall, it is recommended that these concepts be reviewed with City staff and the GEDC to
evaluate potential implementation opportunities and constraints, for purposes of arriving at an
improved approach making development of affected sites more palatable.
Modify Agricultural Mitigation Policy to Allow In-Lieu Fee Option
Today, the County eludes images of Facebook, Google, and other high-tech campuses; however,
agricultural production has been historically critical to the County’s economy. Beginning in the
1970s, the County made a fundamental goal to preserve prime agricultural land and the
maintenance of a strong agricultural industry through establishing principals that focus urban
development into compact cities and protects open space and agricultural lands in rural areas.
The County Local Agency Formation Commission (LAFCO) furthered this goal by creating policies
that are designed to protect or replace agricultural lands. LAFCO approval is required for any
expansion of an Urban Service Area (USA) and its policies recommend a 1:1 mitigation for
conversion of agricultural lands. LAFCO policies discourage USA expansions into agricultural land,
unless effective measures have been accomplished for protecting the agricultural status of the
land.
In 2004, the City adopted the Agricultural Mitigation Policy intended to set forth the specific
criteria and guidelines, consistent with the City’s General Plan policies on agriculture, to enable
the continued viability of agriculture and agri-tourism in the Gilroy area. The City’s Agricultural
Mitigation Policy requires mitigation for the conversion of specifically designated agricultural
lands to urban uses.
Mitigation may be accomplished with one of the following two options and the options shall
include all costs to cover program administration, monitoring and management of established
easements:
Mitigation 1: Purchase an equal amount of land (1:1 ratio) of agricultural land within the
“Preferred Preservation Areas” and the transfer of the ownership of this land to the Silicon
Valley Land Conservancy or other City-approved agency.
Mitigation 2: Purchase of development rights to a 1:1 ratio on agricultural land within the
“Preferred Preservation Areas” and the transfer of ownership of these rights to the Silicon
Valley Land Conservancy or other City-approved agency.
EPS understands that in the past, developers had an option of paying an in-lieu fee rather than
undertaking one of the onerous processes described above. The City should reconsider allowing
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developers to pay an in-lieu agricultural mitigation fee based on the average costs required to
acquire lands, on a 1:1 ratio, to replace lands converted from agricultural uses to urban uses.
Several Central Valley cities implement agricultural land mitigation programs allowing for either
an in-lieu fee or in-kind acquisition. The City of Stockton allows projects subject to its
Agricultural Land Mitigation Program to either dedicate to a qualifying entity an in-kind direct
purchase/acquisition of an agricultural easement at a 1:1 ratio, or to pay an in-lieu agricultural
land mitigation fee. For projects paying an in-lieu agricultural mitigation fee, the fee shall be
determined by the fee schedule in effect on the date the final subdivision map is filed, the
vesting tentative map application is deemed complete, or the date a building permit is issued, as
applicable.
Allowing developers to pay an agricultural mitigation in-lieu fee, as opposed to acquiring land or
purchasing development rights, streamlines the mitigation requirement by making the payment
predictable and removing a cumbersome and delaying process.
EPS recommends that a focus group be formed to discuss the practicality of this recommended
policy change.
Maximize Appeal of Opportunity Zone
Opportunity Zones are a new community development program established by Congress in the
Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and
rural communities nationwide. Opportunity Zones are established at the Census tract level; and
eligible Census tracts must have poverty rates of at least 20 percent or median family incomes of
no more than 80 percent of statewide or metropolitan area family income.
Opportunity Zones provide tax benefits to property investors by allowing investors to reinvest
capital gains by deferring tax on any prior gains through 2026, so long as the gain is reinvested
in a Qualified Opportunity Fund. Furthermore, the incentive program will reduce the tax one
owes by up to 15 percent after 7 years; and if the investor holds the investment in an
Opportunity Fund for at least 10 years, there would be no tax on any new gain from the
investment in the Opportunity Fund. Program does not require any affordable housing.
The California Department of Finance designated a total of 879 census tracts across 57 of the
State’s 58 counties. There are two Census tracts designated Opportunity Zones in Gilroy. Both
are generally located west of US 101, extending from Las Animas Avenue to the
US 101/Monterey Street interchange, and bound to the west generally by Monterey Street, as
highlighted in Figure 5-1 below.
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Opportunity Funds can be set up as single-purpose entities or general funds to invest in several
properties in several markets, providing investment flexibility. They are being formed by capital
investment firms, investment startups, commercial real estate investment firms, and institutional
entities, among others. Studies indicate nationwide Opportunity Fund real estate investments
could reach $85 to $250 billion in 2019.41 Many investment firms that are establishing
Opportunity Funds are seeking to raise approximately $250 million from investors.
Online crowdfunding startups, such as Fundrise, have established intriguing Opportunity Funds
that leverages investments from smaller investors starting at shares of $25,000, enormously
expanding the breadth of investment opportunities. Reports indicate that early investor interest
is emerging in New York City, Los Angeles, Detroit, and Washington, D.C.
Care will need to be taken to minimize disruptive effects on vulnerable populations located to the
east of the UP line in Old Gilroy—while the socio-economics of this transitional neighborhood
allowed the larger area to qualify as an OZ, the program has potential to displace susceptible
populations, especially renters where investments could increase submarket lease rates to the
point it pushes existing low-income renters and legacy business owners out of the
neighborhoods. Many institutional leaders, such as the Kresge Foundation and the Rockefeller
Foundation, are getting involved by partnering with companies that will propose projects that
align with institutional missions. Private social impact investors, like Fundrise, also are
committing to engage communities to develop places that will employ existing residents.
Early benefitting Opportunity Zones will be ones that are most development ready, in areas that
are already attracting investment, on fringe of wealthier areas, and located along transit
corridors. In this regard, Gilroy stands to be a potential magnet for various funds looking for
these attributes in an area with good potential for strong appreciation. Given the need to attract
fund commitment by 2019, the City has a very limited window within which to layer-in
supporting programs and inducements. It is recommended that the City and GEDC staff convene
as soon as possible to explore a package of complimentary policies and inducements to position
this OZ in the strongest fashion possible. It is recommended that the City hold a focus group to
evaluate the potential for a “basket” of incentives that may be offered on a fort-term basis (e.g.,
over a 5-year window) with potential for extension in the case that inducements are proven to be
effective. While the implementation and effects of these programs may not be visible by the end
of 2019, funds will view the assertive move to reduce risk and cost of development in this area
favorably as investment options in various cities are reviewed and compared. Policies that can
have a measurable impact on development feasibility include the following examples:
1. Impact fee deferral or forgiveness (must identify source of backfilling funds).
2. Assessment district (renewed Property Business Improvement District [PBID]).
3. Provision of façade improvements through grants and low-interest loans (discussed further
below).
41 Heschmeyer, Mark. September 19, 2018. “New Tax Provisions Open Gates to $250 Billion in
Property Investments.” CoStar Group.
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4. Reduced parking ratios on private sites combined with commitment to improve public parking
resources (potential element of Arts Center-area P3 as discussed in Chapter 4).
5. Provision of density bonuses in exchange for sought-after attributes (e.g., affordable
housing, community open space, etc.).
6. Commitment to update Downtown Specific Plan, expanding effort to consider entry
experiences leading into the downtown area and related funding resources, with overt goal of
strengthen linkage between the Gilroy Premium Outlets and Downtown.
7. Prioritize discussions with Union Pacific to understand disposition of surplus property east of
the tracks opposite the station and parking lot.
8. Demonstrate initiative in pursuing P3 involving arts center, Hornlein area, and UP property,
in addition to potential pockets including OSH site and even a TVT site oriented to interior
assets and connecting to Downtown.
9. Strengthen farm to fork tourism initiatives, building on Gilroy’s long legacy as a garlic
“mecca.”
10. Seek improved alignment between City, GEDC, and Downtown Gilroy Business Association to
identify and prioritize policies and incentives.
11. Community Education: It may be helpful to evaluate how other cities in the Bay Area have
evolved over time to provide high quality intensified downtown environments while
protecting farmland and accommodating a range of export industries. To the extent that
outward growth is constrained by the UGB, appropriate vertical development is critical to
leverage the economic development potential inherent in Gilroy. In the case of Livermore,
recognizing the advent of its highly successful outlets, new concepts around theater, dining,
and visitor accommodations have been studies intensively as part of an educational outreach
process geared toward policy makers and citizens alike.
Pursue High Priority P3 Opportunities
As discussed in Chapter 4 and above, Gilroy has an opportunity to move assertively to refine
itself in the eyes of potential investors. As discussed, Gilroy enjoys a very strong position in the
expanded South Bay with the ability to leverage its resources to better establish its tourism
sector and expand transportation linkages involving both tourism and business. Three major P3
opportunities are in play, with each having real potential to develop additional hotel demand,
providing a source of transient occupancy tax (TOT) revenue that may be critical to funding City
services and benefits in the future.
Agreements between a jurisdiction and specific developers may be developed that produce
sources of repayment to the jurisdiction. For example, it may be determined that returns over
and above a meaningful private-sector threshold are shared with the jurisdiction on an ongoing
basis in exchange for funding assistance at the outset of a project. Terms can be put in place to
arrange for loan forgiveness if certain public objectives (assessed value, jobs, tax revenue, etc.)
are realized. This approach requires an “open book” arrangement with private developers, which
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may or may not be acceptable on a case-by-case basis. Here are 2 examples of this P3 concept
that may be applicable:
TOT as a Key Incentive. If additional resources are needed on a deal-by-deal basis, an
approach to leveraging this resource includes a self-imposed TOT surcharge. Property
owners would use a Development Agreement to establish a higher TOT rate imposed on a
project-specific basis to compensate the jurisdiction or the above-referenced fund for value
of parking or other assets contributed.
Sale-Leaseback. In many cases a public agency may sell specific assets to 1 or more
private-sector entities and lease them back, thereby realizing a lump sum providing working
capital. This could be 1 manner in which a Revolving Loan Fund (RLF) could be capitalized
(see discussion below). Use of this approach would require a more specific evaluation of the
relative value of key assets (e.g., surplus corporation yards, surface parking lots, or other
nonessential facilities), the cost and source of lease back payments, and the recognized
quantitative and qualitative benefit from the application of sales proceeds.
Overall, P3 is an effective mechanism for overcoming a financing gap using the ability of the
public sector to improve project feasibility through the provision of assets, services, funding, and
other attributes. In the world of hotel development, a common mechanism for providing
additional project capitalization is the commitment to return certain levels of TOT to a project to
offset extraordinary development costs. Importantly, in this and other P3 examples, revenue
controlled by the City and reinjected into the project is money that would not exist “but for” the
project. Property and sales tax increment deals typically work on the same principle. Ultimately
any infusion of City tax of General Fund money needs to be demonstrated to result in a net
improvement in overall economic outcome relative to the “before-project” condition. There is
always a strong need in P3 deals to ensure a tight alignment between public- and private-sector
goals.
In some cases, the City may be justified in including its own real property assets into a P3
project, if needed to accomplish over-riding community objectives and to overcome otherwise
unattainable project feasibility thresholds. It is recommended that the City conduct a detailed
review of potential surplus assets that may be helpful to create some liquidity that could be
quickly used for critical project funding, whether it be as part of the projects identified below or
for more general use as part of a RLF, as discussed below.
To the extent the City owns land in projects representing major P3 opportunities, it can consider
the potential pros and cons of injecting land as equity in a project as a fee-simple transfer (i.e.,
sale) or as a ground lease. However, ground leasing tends to induce great complexity around
provision of project financing, especially as pertains to single-family residential or any use not in
a very strong market position. For situations involving weaker market conditions, developers
typically will see very long lease terms (e.g., 50 to 99 years) to gain sufficient long-term utility
of the site to realize sufficient economic benefit before the ultimate reversion of the property
back to the City.
Various P3 opportunities the City can pursue are described below.
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Monterey Street and Tenth Street Corridor Sites/HSR Station
This area has a complex ownership pattern, including City-owned property at the Art Center, a
large area under existing ground lease in the form of the former OSH store, a major 2-block
holding owned by UP, and several privately owned parcels. In addition, the area to the east of
the tracks includes various fine-grained uses in the industrial sector that should be protected.
It is recommended the City hold a scoping meeting to understand the most efficient manner to
expand current rail station planning efforts, perhaps as a component of an updated Downtown
Specific Plan, and to make initial contacts with various property owners to determine the level of
interest. This effort should be made in light of recognition of the City’s commitment to
strengthening the area with the above-referenced incentives, along with the potential to attract a
major Opportunity Fund investor.
Sports Park
The Sports Park is another major asset capable of putting Gilroy on the map as a regional
recreational hub, similar to the City of Manteca, which is establishing a “Family Entertainment
Zone” anchored in that case by a Great Wolf Lodge. Ideally the City will have the ability to
identify and negotiate with a major anchor providing a novel and compelling concept to jump-
start this project. To maximize the economic benefit of the project, it would ideally provide food
and lodging as an integrated approach, assuming that such uses may be allowed from a
LAFCO/other regulatory standpoint.
Gilroy Gardens
The City’s 35-acre area, embedded in the larger Gilroy Gardens site, is positioned to serve as a
“base village” for a re-imagined and improved overall project. While Gilroy Gardens remains a
popular summer destination, the area has immense potential ability to accommodate a broad
range of expanded visitor activities that would leverage the spectacular aesthetics of the area.
As such, the 35-acre parcel’s potential is intrinsically linked to the larger fate of Gilroy Gardens—
should there be the ability to significantly expand the range of activities and improve visitation as
a year-round destination concept, the ability to provide a base village including hotel, retail, and
even certain housing prototypes becomes a strong possibility. Fiscal benefits would likely
support TOT sharing as needed to capitalize a destination hotel/retail environment. However,
protectionist instincts are acute among current residents—it will be imperative to demonstrate
how a project such as this may be implemented without causing circulation or other problems.
Refine and Expand Capabilities and Responsibilities
of the GEDC
The GEDC would be well-advised to consider potential expansions of its core capacities to, in
select cases, enact development when and where typical market forces are less than supportive.
In effect the GEDC is in excellent position to analyze and advise the City as to when
extraordinary efforts are needed to accommodate strategic industries and projects. With the
abolition of Redevelopment in California, a replacement entity closer to the ground relative to
specific projects and able to perform related economic evaluations is needed to bridge the gap
with City staff and policy makers. While partial mitigation in the funding arena is available in the
form of EIFDs and the promise of the new OZ legislation, there is a void in terms of a well-
funded agency that actively works with the private sector and marshals creative combinations of
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public and private funding resources and skills to accomplish strategic, timely, and meaningful
development by quickly and fluidly entering into P3s involving real property disposition, façade
improvements, critical research and analysis, and a myriad of other essential activities needed to
keep Gilroy in an assertive and business-friendly stance.
The Opportunity and Corridor Sites evaluated in this report include examples of nuanced and
challenging situations where risks presently outweigh benefits in the eyes of many prospective
investors. As the City continues to evaluate these areas, it should also begin prioritizing
additional corridors, such as Leavesley between US 101 and Monterey Street, as well as the
entry experience along Monterey Street between Leavesley and Third Street, as well as other
areas of infill and adaptive reuse. The GEDC, with its close relationship to property owners and
other key stakeholders, occupies a unique perspective that may warrant an expansion in budget
and staff to push forward with the recommendations of this report. In particular, the GEDC may
be in a position to administer (or to work with a national administrator but still control) a RLF
program.
RLF Concept
The GEDC has an opportunity to expand its role by organizing, coordinating, and running a
regional development fund that would provide a formal approach toward priority development
areas in Gilroy.
The GEDC and its collaborators would work closely to prioritize and coordinate incentive
packages for prospective investors. Each entity may have somewhat different criteria and
overall program objectives related to said projects, requiring careful coordination at the front end
of potential projects.
In this era of scarce resources, it is imperative that maximum efficiency is gained in terms of
strategic deployment of public and private resources. For medium-sized projects, equity is
extremely valuable and subject to loss. The key fix is to shorten the length of time and
complexity of steps needed in the critical phase between initial due diligence and application
submission.
The GEDC may have the ability to expand its activity around grants, low-interest or forgivable
loans, and developing deal structures using a variety of funding sources and techniques.
The GEDC could engage with the City and other organizations to generate a critical mass of
funding sources that, in combination with other efforts, brings the potential to have a decided
impact on development momentum by virtue of expanding and diversifying the “capital stack”
available to qualified projects, potentially including the following resources:
Surplus land/other municipal assets. The City controls assets that may be monetized in
various ways to pursue favorable projects. Additional review and discussion of this topic will
be necessary before these and other City assets can be factored into this approach or other
P3 approaches discussed above.
Grant/other program funding. The City and GEDC have access to State resources and
could have the responsibility of issuing grants to pursue key projects.
Jurisdictional project revenue consisting of TOT, property tax, or sales tax. The
ability to issue debt supported by property tax through 1 of 3 available tax increment options
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could be strategic. This jurisdictional revenue also could act as “seed” capital to be repaid
through fiscal receipts such as TOT.
Grants and Low-Interest Loans offered by local governments, as well as non-
governmental institutions (NGOs). Entities such as these have specific interests in various
activities and offer extremely advantageous loan terms for qualifying projects (e.g., 1 to
2 percent interest, 5 to 10 years).
Integration with other Funds. Local Initiatives Support Corporation’s Growing Rural
Communities Fund, for example, will leverage New Markets Tax Credit equity with additional
capital to finance real estate purchases and construction costs for projects that are
oftentimes shut out of traditional lending opportunities because of their size and location.
Private Debt and Equity, including traditional and “impact” investors. To an
increasing degree, major institutional investors have considered the environmental
credentials of investment projects under the rubric of the “triple bottom line” concept.42
Institutional entities such as the California State Teachers Retirement System (CalSTRS) and
the California Public Employees Retirement System (CalPERS) have also indicated interest in
impact investing and may be strong candidates for follow up.
However, these types of investors may need to see increased stability and predictability in the
local market and may be a longer term prospect as a potential fund participant. In addition to
traditional banking interests, short-term hard money lenders are able to fill financial gaps quickly
in exchange for interest-rate premiums.
The GEDC should conduct outside investor outreach to specify timing outlook and other steps
necessary to secure equity capital, grants, low-interest loans, philanthropic sources, naming
rights potential, and other sources of outside funding. Several entities could be involved in the
fund concept:
The City and the County. To a great extent, local government participation in the program
is hugely advantageous because of municipal revenue reinvestment potential (TOT, sales tax,
property tax), which may be pledged to the fund. Moreover, these entities have the ability to
issue municipal debt in support of the program and can greatly affect the risk profile through
public policy levers affecting these:
— Near-term sources. The City may establish a General Fund reserve as a way to seed
initial County investment as a primary short-term source of fund capital. TOT revenue is
a viable and primary source of gap funding for key projects under the proposed concept.
— Mid-term sources. Using property tax increment, EIFDs have emerged as a leading
candidate for infrastructure investment in infill settings as a direct result of the
dissolution of redevelopment agencies in California. It provides a viable option for
offsetting jurisdictional contributions toward extraordinary capital outlays for critical
facilities such as structured parking, which in many cases will be necessary to realize
allowable densities. Recent legislation (Senate Bill [SB] 628) has made this a more
42 See http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html.
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viable funding and financing mechanism, eliminating the voter requirement to form the
district and requiring just 55 percent voter approval to issue bonds. Other sources may
include EB-5 and I-bank.
Short-Term Equity Sources. Under certain conditions, it may be necessary to provide gap
funding to projects on a short-term basis. These “last in, first out” funds would command a
higher interest rate, which could be controlled by virtue of any public-sector “backstopping”
that might be possible.
Impact Investors. Many institutional investors are committed to placing certain
percentages of their investments in funds that generate social or environmental goods, while
achieving strong financial returns. These investors use a variety of techniques, depending on
specific mission objectives and return criteria, and often blend below-market-rate tools
(grants, credit enhancement, below-market loans including “first loss,” gap financing, and
RLFs). In this regard, the term “first loss” relates to a strategy of taking GEDC or a
jurisdiction out of the primary risk position and putting in place a source of equity capital,
which could be an amalgamation of public and private resources. This source pairs well with
the use of New Market Tax Credits and the use of Economic Development Corporations or
Community Development Finance Institutions using a 501(c)(3) structure.
State Strategic Growth Council (cap and trade). The objectives of mixed-use town
center development are entirely consistent with trip reduction criteria of cap and trade
grants. However, the future of this source is uncertain and should not be considered a high
probability to be a major component of fund capitalization. If renewed by the State
legislature to continue beyond FY 2019/20, under some circumstances there may be longer
term recapitalization potential from this source.
Private Investment Funds. Any number of additional funds could form an alliance with
this to increase capital raising capabilities and without redundant operational burdens. For
example, the Tahoe Fund has been identified as a potential partner in this concept.
Figure 5-2 below provides an initial roadmap for entering into collaborative processes with
public and private entities to further these goals.
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DRAFTFigure 5-2City of GilroyPlace-Based Economic Development StrategyPotential Gilroy Revolving Loan Fund StructurerlfProject Development FundDevelopment ProjectSales Tax TOT RevenueProperty Tax Project Related RevenuesRecapitalize Project Development FundFund Parking, and/or other eligible costsCity General FundOutside Funding Reimburse City General Fund Initial Sources of CapitalPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2995.A.aPacket Pg. 152Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Revolving Fund Components
The concept depicted above includes the following characteristics:
1. Initial Capitalization from the City General Fund or other sources. As an example, Placer
County initially capitalized a similar fund with General Fund revenue (TOT).
As an augmentation to any General Fund revenue that may be available as a loan or a grant,
it may also be possible to use DIFs to create seed funds. Other funds could be merged or
affiliated with this effort, as could grant proceeds from various NGOs.
2. External Fund Augmentation. Additional funds potentially made available from grants,
nonprofits, and NGOs. For example, the Packard Foundation has been involved in
preliminary discussions related to a similar fund in the South Lake Tahoe area, indicating
potential interest in participating in key projects by offering low interest loans (e.g.,
preliminary discussions indicated a potential 5-year term with interest of 1 percent per
annum.
3. Determine Project Funding Que. Qualifying projects must demonstrate job generation, as
well as other considerations, such as need for funding and ability to generate significant
public revenue in the form of property tax, sales tax, or TOT. A development sequencing
strategy should be created to determine optimal order of projects to create and sustain a
positive cash flow.
4. Establish Policy for Reimbursement of Originators Versus Fund Recapitalization.
Balance the need to provide return on investment to originator versus recapitalization of
fund. The following cash flow model and related discussion indicates that under plausible
assumptions, a fund balance can be sustained at positive levels while providing appropriate
returns to the public and private entities originating loan capital. Tax increment revenues for
an EIFD are minimal in the near term but become more robust in the outer years. If the
EIFD is not authorized to issue debt, there is no term limit for its use. Long-term tax
increment revenues could be one source for reimbursement.
These are key initial issues and steps:
Define expanded scope of organization.
Evaluate legal aspects for expanded scope.
Determine sources of additional funding to support expanded scope.
Initiate RLF formation process (as warranted).
Other Incentives: Coordinated Approach between City and GEDC
Tax relief. Cities such as Morgan Hill have offered tax relief as relating to B2B sales and use
tax payments, as well as Utility User Tax relief. Additional evaluation of the need for and
results of such programs should be thoroughly evaluated, as it is critical for the City to
maintain a robust revenue picture. The GEDC would be a valuable arbiter regarding the
identification of specific major owner-user and other entities that might warrant special
measures on a case-by-case basis.
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Façade Improvement. Whether through the RLF mechanism or simply through provision of
grants on a case-by-case basis, the GEDC is in a good position to work with property owners
to ensure that access to capital to refurbish older centers such as those profiled on First
Street, which occupy sites too small to redevelop and still play an important role in serving
their respective communities. These are best practices in Façade programs:43
— Façade improvement programs are developed to provide financial assistance and
sometimes architectural assistance for the improvement of business fronts. These
programs are not PBIDs or other such related “districts.”
— Funding generally comes in the form of grants with specified grant limits. Grants
generally are State or federal Community Development Block Grant. Local banks provide
matching financing.
— The programs may be offered across all sectors of a jurisdiction but may be more
efficient in targeting certain areas or business corridors in a city.
— A formal purpose statement should provide guidelines as to why the program is formed
and provide stated goals for the program.
— Eligibility requirements should be established identifying who may have access to the
program. Is it property owners, or could it be tenants with landowner approval? There
should be a statement of minimum and maximum grant/loan amounts. There could be
targets established that would allow forgiveness of loans. Incentives might be continued
maintenance and upkeep of improvements for specific terms (e.g., 5 years).
— Provide clearly defined qualified improvements for the program to be consistent with goal
statements.
Interface with City on Specific Plan approaches in infill/reuse context. Throughout
this evaluation, there are instances where significant growth and development is planned for
existing industrial areas. The GEDC is in an ideal position to monitor and inform City policy
makers regarding fine-grained uses that should be protected in these areas to preserve the
exiting small- to medium-sized job base in Gilroy.
Overall, the City and the GEDC are encouraged to review two economic development incentive
programs offering a useful structure for Gilroy. These are found in the cities of Elk Grove and
Morgan Hill:
Grow Morgan Hill Fund. In partnership with the National Development Council, the City of
Morgan Hill offers low-interest loan amounts of $100,000 to $1.5 million for permanent
working capital, real estate acquisition, property improvements, machines or equipment, and
refinancing eligible debt. The goal of the loan program is to help small businesses grow in
Morgan Hill.
43 Note, the City of Dublin has a very well-conceived façade program not involving PBIDs. See
https://cbig.ca.gov/Government-Partners/City-of-Dublin/Incentives/Commercial-Facade-
Improvement-Grant-Program.
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Utility User Tax Exemption. The City of Morgan Hill does not have Utility User Tax on
services such as electricity, gas, and water, a potentially important cost savings for energy-
intensive operations.
Construction Tax Exemption. The City of Morgan Hill does not impose construction taxes
on any new building development or tenant improvements.
Use Tax Incentive. The City of Morgan Hill provides a rebate of up to 30 percent of the
local sales tax revenue collected on select purchases of equipment, materials, and fixtures
purchased by businesses or contractors operating in Morgan Hill.
Low Business Tax. The City of Morgan Hill’s base tax rate for most businesses is less than
$5 per month. Depending on the industry the business is in, an additional charge may apply
up to $3 per employee.
Startup Elk Grove. The City of Elk Grove established this city-led program to support the
launch, growth, and attraction of innovative startup companies in and to Elk Grove by
providing financial, site selection, entitlement, and permitting support to entrepreneurs,
startup companies, and operators of coworking, incubator, and accelerator spaces. The
program is comprised of 3 components, described below:
— Launch provides financial incentives to startup entrepreneurs with a high potential
concept who agree to develop and attempt to launch their business in Elk Grove.
— Scaleup provides financial incentives and non-monetary assistance for startup
companies that demonstrate high growth potential and are looking to scale operations in
Elk Grove.
— Spaces provides financial incentives for operators of coworking spaces, incubators, or
accelerators in Elk Grove. Funds may be used by the City of Elk Grove to purchase, lease,
or improve commercial spaces suitable for these operators.
As discussed above, Morgan Hill has taken an aggressive stance on tax relief packages, which
should be more carefully evaluated as a potential next step. While providing a good example for
consideration, Gilroy is unique to Morgan Hill in many respects, and the need for long-term
municipal revenue from a variety of sources is critical to Gilroy’s future, meaning that further
discussion and consideration of any program that would reduce City receipts should be carefully
evaluated to ensure probable overall payback (i.e., ensure the benefit eclipses the cost of lost
revenue) occurs within a reasonable timeframe.
Next Steps
As discussed throughout this report, Gilroy has an opportunity to capture select industries being
pushed out of the greater San Jose and other peripheral markets. Future opportunities in this
regard will be brought about by HSR, fuller development of the City’s tourism sector, the
potential capture of R&D and advanced manufacturing in agricultural technology and other
clusters, and protection and support for the City’s coveted Outlets. While market preferences and
the “fit” of various industries with identified site zoning, size, access, and configuration will
determine the outcome, the City has the opportunity to put its “thumb on the scale” to tip the
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balance in its favor where circumstances dictate. Key elements requiring additional study are
listed below:44
Public Asset Disposition Strategy (Gilroy Gardens, Sports Park, Arts Center/Hornlein Court).
East of US 101 Residential and Mixed-Use Feasibility Analysis.
Outlets Advancement Strategy.
RLF Pilot Program Feasibility Evaluation.
B2B Sales Tax Relief Evaluation.
Impact Fee Waiver Criteria and Backfill Approach.
Multimodal Improvement Plan Feasibility.
Startup/Incubator Financial Incentive Pilot.
Evaluate Agriculture Mitigation In-Lieu Fee Payment Option.
Seek Interim RDO Allowance.
Conduct Community Education Series on Downtown Intensification Strategies.
Evaluate GPU Implications (public workshops).
EPS stands ready to work with City and GEDC staff to further explore these elements as a follow-
up analysis pursuant to this report.
44 As appropriate, these strategies may be developed in more detail following initial review and
discussion.
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APPENDICES:
Appendix A: Gilroy Resident Worker and
Industry Analysis
Appendix B: Gilroy Additional Market Analytics
Appendix C: Gilroy Planning Documents
Appendix D: Financial Mechanisms Detail
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APPENDIX A:
Gilroy Resident Worker and Industry Analysis
Table A-1 Gilroy Resident Worker Industry Changes .......................... A-1
Table A-2 Comparison of Industry Economic Key Statistics ................. A-2
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DRAFTTable A-1City of GilroyPlace-Based Economic Development StrategyGilroy Resident Worker Industry ChangesIndustry2011 2016 Amount Percent 2011 2016 Amount PercentAgriculture, forestry, fishing and hunting 1,082 1,235 153 14.1% $17,421 $21,305 $3,884 22.3%Mining, quarrying, and oil and gas extraction 0 0 0 0.0% - - $0 0.0%Construction 2,033 2,210 177 8.7% $45,446 $45,000 ($446) (1.0%)Manufacturing 2,920 3,154 234 8.0% $53,258 $49,907 ($3,351) (6.3%)Wholesale trade 498 738 240 48.2% $53,611 $46,739 ($6,872) (12.8%)Retail trade 3,301 3,336 35 1.1% $24,288 $19,123 ($5,165) (21.3%)Transportation and warehousing 261 460 199 76.2% $77,716 $56,806 ($20,910) (26.9%)Utilities 216 292 76 35.2% $47,273 $77,574 $30,301 64.1%Information 389 404 15 3.9% $44,811 $38,457 ($6,354) (14.2%)Finance and insurance 544 478 (66) (12.1%) $75,000 $74,853 ($147) (0.2%)Real estate and rental and leasing 477 578 101 21.2% $26,250 $40,975 $14,725 56.1%Professional, scientific, and technical services 965 1,465 500 51.8% $73,220 $82,580 $9,360 12.8%Management of companies and enterprises 0 10 10 0.0% - - $0 0.0%Administrative and support and waste management services 1,104 1,170 66 6.0% $25,179 $25,175 ($4) (0.0%)Educational services 1,714 2,089 375 21.9% $36,986 $44,250 $7,264 19.6%Health care and social assistance 2,282 2,979 697 30.5% $44,894 $45,063 $169 0.4%Arts, entertainment, and recreation 380 459 79 20.8% $12,318 $11,534 ($784) (6.4%)Accommodation and food services 1,466 2,156 690 47.1% $13,858 $14,424 $566 4.1%Other services, except public administration 1,306 1,121 (185) (14.2%) $23,160 $23,085 ($75) (0.3%)Public administration 942 1,142 200 21.2% $79,362 $83,935 $4,573 5.8%Total21,880 25,476 3,596 16.4% $37,751 $35,835($1,916)(5.1%)gilroy workerSource: US Census Bureau, 2007-2011 ACS, 2012-2016 ACS; EPS.Resident WorkersChangeMedian EarningsChangePrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2A-15.A.aPacket Pg. 159Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable A-2City of GilroyPlace-Based Economic Development StrategyComparison of Industry Economic Key Statistics (2012)Industry [3] [4]Number of Establish.Number of EmployeesTotal($1,000)Average per Establish.Total($1,000)Average per EmployeeNumber of Establish.Number of EmployeesTotal($1,000)Average per Establish.Total($1,000)Average per EmployeeNumber of Establish.Number of EmployeesTotal($1,000)Average per Establish.Total($1,000)Average per EmployeeMining, quarrying, and oil and gas extractionN/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 753 27,852 $22,114,832 $29,368,967 $2,244,544 $80,588ConstructionN/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 60,247 597,265 $148,546,029 $2,465,617 $30,413,827 $50,922Manufacturing54 1,346 $498,855 $9,238,056 $68,747 $51,075 2,385 100,981 $41,450,609 $17,379,710 $9,169,184 $90,801 38,741 1,163,341 $512,303,164 $13,223,798 $69,316,766 $59,584Wholesale trade [5]41 N/A N/A N/A N/A N/A 2,310 84,304 $91,858,973 $39,765,789 $10,822,201 $128,371 52,664 723,526 $666,652,186 $12,658,594 $48,408,666 $66,907Retail trade313 5,155 $1,191,898 $3,807,981 $111,945 $21,716 4,927 84,158 $40,336,741 $8,186,877 $3,212,354 $38,171 106,419 1,540,055 $481,800,461 $4,527,391 $43,361,045 $28,156Transportation and warehousing25 365 $72,576 $2,903,040 $17,170 $47,041591 10,459 $1,435,043 $2,428,161 $439,739 $42,044 21,218 441,734 $78,925,731 $3,719,754 $19,716,092 $44,633Utilities1 N/A N/A N/A N/A N/A 24 N/A N/A N/A N/A N/A 1,143 66,836N/A N/A $7,009,835 $104,881Information11 186 N/A N/A $8,023 $43,134 1,427 78,161N/A N/A $14,623,303 $187,092 21,925 561,399N/A N/A $70,661,932 $125,868Finance and insurance50 310 N/A N/A $14,015 $45,210 2,279 27,272N/A N/A $2,390,610 $87,658 48,523 601,858N/A N/A $57,898,326 $96,199Real estate and rental and leasing40 136 $48,641 $1,216,025 $4,706 $34,603 2,426 12,827 $4,458,930 $1,837,976 $763,677 $59,537 49,276 273,511 $78,740,158 $1,597,941 $13,467,465 $49,239Professional, scientific, and technical services73 382 $51,830 $710,000 $19,089 $49,971 8,395 125,395 $30,138,892 $3,590,100 $13,549,775 $108,057 114,321 1,303,232 $234,371,249 $2,050,115 $90,437,296 $69,395Management of companies and enterprisesN/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5,116 276,957 $14,197,087 $2,775,037 $30,089,818 $108,644Administrative and support and waste management services53 617 $62,568 $1,180,528 $21,037 $34,096 2,173 66,466 $5,007,152 $2,304,258 $2,385,128 $35,885 41,820 1,109,518 $88,134,862 $2,107,481 $43,254,296 $38,985Educational services6 39 $1,077 $179,500 $359 $9,205693 7,634 $503,683 $726,815 $172,704 $22,623 9,240 105,142 $7,784,661 $842,496 $2,629,451 $25,009Health care and social assistance135 2,027 $307,111 $2,274,896 $107,394 $52,982 5,410 99,127 $17,020,991 $3,146,209 $6,095,538 $61,492 103,207 1,776,440 $248,953,592 $2,412,177 $91,139,895 $51,305Arts, entertainment, and recreation9 383 $14,033 $1,559,222 $5,136 $13,410515 14,189 $1,479,614 $2,873,037 $558,938 $39,392 21,191 303,838 $39,179,497 $1,848,874 $13,418,928 $44,165Accommodation and food services127 2,168 $124,616 $981,228 $31,710 $14,626 4,407 72,491 $4,809,201 $1,091,264 $1,336,160 $18,432 78,560 1,394,984 $90,830,372 $1,156,191 $25,147,755 $18,027Other services, except public administration92 745 $81,623 $887,207 $20,276 $27,216 3,008 20,859 $3,493,842 $1,161,517 $728,461 $34,923 57,009 395,836 $50,439,225 $884,759 $12,251,174 $30,950Totalemployer statSource: US Census Bureau, 2012 Economic Census; EPS[1] Includes value of sales, shipments, receipts, revenue, or business done.[2] Includes all form of compensation, such as salaries, wages, commissions, dismissal pay, bonuses, vacation allowances, sick-leave pay, and employee contributions to qualified pension plans paid during the year to all employees.[3] Reflects data from all establishments, including establishments subject to federal income tax and establishments exempt from federal income tax.[4] Dataset does not include statistics on Agriculture, foresty, fishing and hunting; and Public administration.[5] Reflects data for merchant wholesalers, except manufacturers' sales branches and offices.CaliforniaValue of Business [1] Annual Payroll [2]City of GilroyValue of Business [1] Annual Payroll [2] Value of Business [1] Annual Payroll [2]Santa Clara CountyPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2A-25.A.aPacket Pg. 160Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
APPENDIX B:
Gilroy Additional Market Analytics
Table B-1 Industrial Inventory ........................................................ B-1
Table B-2 Industrial Annual Net Absorption ...................................... B-2
Table B-3 Industrial Annual Deliveries ............................................. B-3
Table B-4 Office Inventory ............................................................. B-4
Table B-5 Office Annual Net Absorption ........................................... B-5
Table B-6 Office Annual Deliveries ................................................... B-6
Table B-7 Retail Inventory ............................................................. B-7
Table B-8 Retail Vacancy ............................................................... B-8
Table B-9 Retail Annual Net Absorption ............................................ B-9
Table B-10 Retail Average Asking Least Rate .................................... B-10
Table B-11 Retail Annual Deliveries ................................................. B-11
Table B-12 Gilroy Hotel Visitation Analysis (5 pages) ......................... B-12
5.A.a
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DRAFTTable B-1City of GilroyPlace-Based Economic Development StrategyIndustrial Inventory (Leasable Sq. Ft.)Market 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Amount PercentGilroy5,140,475 5,174,975 5,174,975 5,174,975 5,174,975 5,174,975 5,174,975 5,174,975 5,174,975 5,174,975 5,174,975 34,500 0.7%Gilroy/Morgan Hill8,328,975 8,396,819 8,365,197 8,365,197 8,365,197 8,368,197 8,368,197 8,368,197 8,368,197 8,349,518 8,371,694 42,719 0.5%San Jose Market96,324,915 96,037,226 95,999,802 95,037,404 95,000,670 94,615,339 93,995,834 93,835,589 93,600,189 94,109,360 94,071,792 (2,253,123) (2.3%)Salinas Market 20,251,995 20,289,075 20,321,304 20,321,304 20,321,304 20,341,218 20,341,218 20,341,218 20,341,218 20,439,738 20,453,238 201,243 1.0%ind invSource: CoStar, data retrieved May 15, 2018; EPS.Industrial —InventoryChange (2008-2018)Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-15.A.aPacket Pg. 162Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-2City of GilroyPlace-Based Economic Development StrategyIndustrial Annual Net Absorption (Leasable Sq. Ft.)AnnualMarket 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 [1]Average [2]Gilroy(1,110) (4,270) 48,730 (62,866) (58,925) (183,996) 190,523 81,744 262,931 (71,081) 68,874 20,168Gilroy/Morgan Hill154,199 63,933 40,319 (69,532) (57,601) (194,711) 115,059 211,598 246,239 (84,643) 58,880 42,486San Jose Market(1,383,948) (2,921,591) (834,677) 224,689 (2,272,441) (1,241,777) 789,650 (320,195) 1,732,703 (797,787) 1,011,955 (702,537)Salinas Market [3]225,468 (1,130,539) 418,518 63,007 140,702 67,639 458,727 80,527 206,066 (65,284) 82,679 46,483ind absSource: CoStar, data retrieved May 15, 2018; EPS.[1] Reflects data through May 2018.[2] Reflects annual average net absorption from 2008 through 2017.Industrial —AbsorptionPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-25.A.aPacket Pg. 163Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-3City of GilroyPlace-Based Economic Development StrategyIndustrial Annual Deliveries (Leasable Sq. Ft.)AnnualMarket 2008 2009 2010 2011 2012 2013 2014 2015 2016 [1] 2017 2018 [2] TotalAverage [3]Gilroy68,5710000000450,000 0 0 518,571 51,857Gilroy/Morgan Hill101,91500003,000 0 0 450,000 0 22,176 577,091 55,492San Jose Market101,915 3,161 302,866 0 35,330 3,000 0 0 930,251 435,695 628,695 2,440,913 181,222Salinas Market [3]37,080 32,229 0 0 19,914 0 0 0 9,895 88,625 13,500 201,243 18,774ind delivSource: CoStar, data retrieved May 15, 2018; EPS.[1] CoStar does not register some new developments that are owner-user constructed. EPS added 450,000 square feet delivery based on the estimated square footage of the UNFI project that was developed between 2015 and 2016.[2] Reflects data through May 2018.[3] Reflects annual average delivered square feet from 2008 through 2017.Industrial —Delivered Sq. Ft.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-35.A.aPacket Pg. 164Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-4City of GilroyPlace-Based Economic Development StrategyOffice Inventory (Leasable Sq. Ft.)Market 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Amount PercentGilroy744,826 744,826 744,826 744,826 744,826 744,826 744,826 744,826 744,826 738,214 738,214 (6,612) (0.9%)Gilroy/Morgan Hill1,903,544 1,903,544 1,903,544 1,903,544 1,903,544 1,903,544 1,903,544 1,903,544 1,903,544 1,896,932 1,896,932 (6,612) (0.3%)San Jose Market101,189,225 103,674,234 104,553,029 105,905,101 105,927,902 107,290,455 108,737,553 110,396,749 114,534,673 117,031,760 127,266,547 26,077,322 25.8%Salinas Market [1]8,348,304 8,413,292 8,413,292 8,413,292 8,428,292 8,428,292 8,428,292 8,428,292 8,428,292 8,656,934 8,656,934 308,630 3.7%off invSource: CoStar, data retrieved May 15, 2018; EPS.Change (2008-2018)Office —InventoryPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-45.A.aPacket Pg. 165Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-5City of GilroyPlace-Based Economic Development StrategyOffice Annual Net Absorption (Leasable Sq. Ft.)AnnualMarket 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 [1]Average [2]Gilroy7,712 (13,231) (4,325) 8,24327 (4,240) 1,299 30,115 (6,143) 4,57089 2,403Gilroy/Morgan Hill17,195 (46,989) (19,493) 25,950 48,988 (8,563) 1,562 8,685 32,314 30,226 (2,261) 8,988San Jose Market(465,575) (2,267,669) 1,471,632 1,177,067 2,775,576 2,800,724 1,365,364 5,636,757 1,847,946 6,140,236 1,776,756 2,048,206Salinas Market [3]108,593 (242,188) (7,284) 44,787 675 (99,332) (55,189) 26,035 140,237 282,456 18,565 19,879off absSource: CoStar, data retrieved May 15, 2018; EPS.[1] Reflects data through May 2018.[2] Reflects annual average net absorption from 2008 through 2017.Office —AbsorptionPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-55.A.aPacket Pg. 166Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-6City of GilroyPlace-Based Economic Development StrategyOffice Annual Deliveries (Leasable Sq. Ft.)AnnualMarket 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 [1] TotalAverage [2]Gilroy00000000000 0 0Gilroy/Morgan Hill00000000000 0 0San Jose Market2,358,026 1,789,453 1,401,236 87,829 660,078 2,370,925 1,590,704 3,988,509 3,151,701 8,262,031 2,988,462 28,648,954 2,566,049Salinas Market76,299 0 0 15,000000087,416 141,226 0 319,941 31,994off delivSource: CoStar, data retrieved May 15, 2018; EPS.[1] Reflects data through May 2018.[2] Reflects annual average delivered square feet from 2008 through 2017.Office —Delivered Sq. Ft.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-65.A.aPacket Pg. 167Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-7City of GilroyPlace-Based Economic Development StrategyRetail Inventory (Leasable Sq. Ft.)Market 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Amount PercentGilroy4,557,431 4,772,108 4,783,530 4,783,530 4,783,530 4,778,013 4,778,013 4,778,013 4,778,013 4,778,013 4,778,013 220,582 4.8%Gilroy/Morgan Hill6,905,172 7,229,848 7,246,936 7,246,936 7,261,512 7,255,995 7,255,995 7,255,995 7,255,995 7,233,865 7,251,084 345,912 5.0%San Jose Market76,278,241 76,989,092 77,461,520 77,964,353 78,005,333 78,045,468 78,499,945 79,077,355 79,502,140 79,828,906 80,611,202 4,332,961 5.7%Salinas Market17,834,866 17,906,921 17,912,694 17,922,966 17,942,549 17,969,049 17,974,284 17,976,884 18,039,507 18,077,160 18,101,713 266,847 1.5%ret invSource: CoStar, data retrieved May 15, 2018; EPS.Retail —InventoryChange (2008-2018)Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-75.A.aPacket Pg. 168Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-8City of GilroyPlace-Based Economic Development StrategyRetail VacancyMarketAmount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount PercentGilroy388,471 8.5% 379,291 7.9% 420,4018.8% 468,752 9.8% 275,593 5.8% 308,428 6.5% 303,365 6.3% 274,248 5.7% 252,979 5.3% 175,796 3.7% 127,562 2.7% 306,8086.4%Gilroy/Morgan Hill493,383 7.1% 606,309 8.4% 702,3429.7% 746,081 10.3% 483,271 6.7% 536,108 7.4% 496,487 6.8% 429,533 5.9% 381,765 5.3% 280,998 3.9% 223,258 3.1% 489,049 6.8%San Jose Market2,603,487 3.4% 3,933,192 5.1% 4,662,523 6.0% 4,431,335 5.7% 3,878,820 5.0% 3,545,617 4.5% 2,971,459 3.8% 2,993,895 3.8% 3,395,645 4.3% 3,313,390 4.2% 2,947,466 3.7% 3,516,075 4.5%Salinas Market 513,112 2.9% 805,099 4.5% 867,8334.8% 873,928 4.9% 809,654 4.5% 661,654 3.7% 662,853 3.7% 582,327 3.2% 538,412 3.0% 450,659 2.5% 330,216 1.8% 645,0683.6%ret vacSource: CoStar, data retrieved May 15, 2018; EPS.2011 Q1 2012 Q1 2013 Q1 2014 Q12008 Q1 2009 Q1 2010 Q12015 Q1 2016 Q1 2017 Q1 2018 Q1Retail —VacancyAverage (2008-2018)0.0%2.0%4.0%6.0%8.0%10.0%12.0%2008 Q12009 Q12010 Q12011 Q12012 Q12013 Q12014 Q12015 Q12016 Q12017 Q12018 Q1Retail Vacancy RateGilroyGilroy/Morgan HillSan Jose MarketSalinas MarketPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-85.A.aPacket Pg. 169Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-9City of GilroyPlace-Based Economic Development StrategyRetail Annual Net Absorption (Leasable Sq. Ft.)AnnualMarket 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 [1]Average [2]Gilroy284,692 40,472 616 97,519 (32,836) 62,861 (47,314) 66,645 (8,021) 98,045 41,878 56,268Gilroy/Morgan Hill473,386 (108,140) 3,400 109,636 (1,355) 71,570 (10,620) 81,501 13,780 150,012 17,565 78,317San Jose Market855,015 (1,645,337) 285,985 389,675 (258,856) 404,454 1,269,035 (249,606) (235,476) 1,074,891 (60,299) 188,978Salinas Market (96,051) (307,604) 1,515 99,170 119,985 88,257 55,360 176,633 17,544 166,433 7,101 32,124ret absSource: CoStar, data retrieved May 15, 2018; EPS.[1] Reflects data through May 2018.[2] Reflects annual average net absorption from 2008 through 2017.Retail —AbsorptionPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-95.A.aPacket Pg. 170Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-10City of GilroyPlace-Based Economic Development StrategyRetail Average Asking Lease Rate (Per Leaseable Sq. Ft.) [1]Avg. AnnualMarket 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Amount Percent% ChangeGilroyAnnual$15.63 $16.03 $16.04 $16.56 $15.49 $13.69 $13.85 $15.75 $16.04 $17.08 $18.54 $2.91 18.6% 1.7%Monthly $1.30 $1.34 $1.34 $1.38 $1.29 $1.14 $1.15 $1.31 $1.34 $1.42 $1.55 $0.24 - - Gilroy/Morgan HillAnnual $17.54 $19.25 $18.72 $18.95 $18.58 $17.19 $16.53 $17.89 $18.03 $19.16 $21.48 $3.94 22.5% 2.0%Monthly $1.46 $1.60 $1.56 $1.58 $1.55 $1.43 $1.38 $1.49 $1.50 $1.60 $1.79 $0.33 - - San Jose MarketAnnual $28.69 $27.00 $26.23 $25.68 $25.98 $26.37 $27.62 $29.24 $30.54 $30.43 $32.81 $4.12 14.4% 1.4%Monthly $2.39 $2.25 $2.19 $2.14 $2.17 $2.20 $2.30 $2.44 $2.55 $2.54 $2.73 $0.34 - - Salinas Market Annual $17.47 $19.34 $18.21 $17.49 $17.08 $18.06 $17.64 $16.74 $17.79 $22.38 $19.24 $1.77 10.1% 1.0%Monthly $1.46 $1.61 $1.52 $1.46 $1.42 $1.51 $1.47 $1.40 $1.48 $1.87 $1.60 $0.15 - - ret ls rtSource: CoStar, data retrieved May 15, 2018; EPS.[1] Lease rates reflect Triple Net for the identified market.Retail —Average AskingLease RateChange (2008-2018)$0.00$5.00$10.00$15.00$20.00$25.00$30.00$35.002008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1Average Annual Lease Rate per Sq. Ft.GilroyGilroy/Morgan HillSan Jose MarketSalinas MarketPrepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-105.A.aPacket Pg. 171Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable B-11City of GilroyPlace-Based Economic Development StrategyRetail Annual Deliveries (Leasable Sq. Ft.)AnnualMarket 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 [1] TotalAverage [2]Gilroy211,704 18,750 23,4220 11,115000000264,991 26,499Gilroy/Morgan Hill394,318 18,750 29,088 14,576 11,11500003,000 14,219 485,066 47,085San Jose Market1,414,915 543,342 471,146 315,966 249,898 347,953 809,853 410,744 669,826 632,661 208,299 6,074,603 586,630Salinas Market115,033 5,689 3,634 33,299 13,500 18,235 2,600 62,623 15,912 52,3160 322,841 32,284ret delivSource: CoStar, data retrieved May 15, 2018; EPS.[1] Reflects data through May 2018.[2] Reflects annual average delivered square feet from 2008 through 2017.Retail —Delivered Sq. Ft.Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-115.A.aPacket Pg. 172Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 1 of 5Table B-12City of GilroyPlace-Based Economic Development StrategyGilroy Hotel Visitation AnalysisItemJul Aug Sept Oct Nov DecLodging PerformanceTOT Collections (Thousands) $163.8 $162.9 $122.6 $131.9 $101.3 $85.5Occupancy Rate 76.9% 75.9% 71.6% 71.3% 59.3% 50.5%Average Annual Occupancy Rate [1] - - - - - 67.6%Avg. Daily Rate $107.85 $108.73 $89.57 $93.70 $89.31 $85.67Year-Over-Year % ADR Change - - - - - - RevPar [2] - - - - - - [1] 2014: Reflects July to December. 2018: Reflects January to May.[2] Data has been collected by Visit Gilroy since only July 2017.Source: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.2014Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-125.A.aPacket Pg. 173Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 2 of 5Table B-12City of GilroyPlace-Based Economic Development StrategyGilroy Hotel Visitation AnalysisItemLodging PerformanceTOT Collections (Thousands)Occupancy RateAverage Annual Occupancy Rate [1]Avg. Daily RateYear-Over-Year % ADR ChangeRevPar [2] [1] 2014: Reflects July to December. 2018: Reflects January to May.[2] Data has been collected by Visit Gilroy since only July 2017.Source: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec$114.3 $108.4 $127.0 $143.8 $149.5 $161.9 $196.7 $185.4 $164.4 $157.6 $117.5 $96.062.2% 67.2% 71.4% 77.9% 77.9% 83.7% 88.1% 84.9% 81.5% 79.1% 65.0% 54.0%- - - - - - - - - - - 74.4%$92.99 $90.46 $90.13 $96.54 $97.13 $101.22 $113.05 $110.60 $105.51 $100.81 $94.57 $90.12- - - - - - 4.8% 1.7% 17.8% 7.6% 5.9% 5.2%- - - - - - - - - - - - 2015Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-135.A.aPacket Pg. 174Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 3 of 5Table B-12City of GilroyPlace-Based Economic Development StrategyGilroy Hotel Visitation AnalysisItemLodging PerformanceTOT Collections (Thousands)Occupancy RateAverage Annual Occupancy Rate [1]Avg. Daily RateYear-Over-Year % ADR ChangeRevPar [2] [1] 2014: Reflects July to December. 2018: Reflects January to May.[2] Data has been collected by Visit Gilroy since only July 2017.Source: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec$108.1 $126.5 $131.3 $145.9 $147.5 $173.6 $216.7 $193.7 $155.1 $158.3 $128.0 $104.858.6% 70.5% 68.6% 74.2% 74.7% 81.8% 84.7% 81.8% 76.3% 78.5% 70.8% 60.5%- - - - - - - - - - - 73.4%$93.40 $100.54 $96.84 $102.79 $100.01 $111.02 $129.47 $119.92 $106.42 $102.02 $94.55 $87.740.4% 11.1% 7.4% 6.5% 3.0% 9.7% 14.5% 8.4% 0.9% 1.2% (0.0%) (2.6%)- - - - - - - - - - - - 2016Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-145.A.aPacket Pg. 175Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 4 of 5Table B-12City of GilroyPlace-Based Economic Development StrategyGilroy Hotel Visitation AnalysisItemLodging PerformanceTOT Collections (Thousands)Occupancy RateAverage Annual Occupancy Rate [1]Avg. Daily RateYear-Over-Year % ADR ChangeRevPar [2] [1] 2014: Reflects July to December. 2018: Reflects January to May.[2] Data has been collected by Visit Gilroy since only July 2017.Source: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec$98.3 $111.1 $128.5 $132.4 $156.0 $184.1 $202.9 $194.7 $171.3 $156.6 $129.7 $109.354.8% 65.4% 66.7% 67.0% 74.4% 81.6% 78.1% 77.3% 75.8% 69.4% 64.4% 60.5%- - - - - - - - - - - 69.6%$90.77 $95.18 $97.57 $103.45 $106.15 $117.97 $131.53 $127.55 $118.23 $114.21 $105.30 $91.43(2.8%) (5.3%) 0.8% 0.6% 6.1% 6.3% 1.6% 6.4% 11.1% 11.9% 11.4% 4.2%- - - - - - $102.71 $98.56 $89.61 $79.29 $67.83 $55.342017Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-155.A.aPacket Pg. 176Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 5 of 5Table B-12City of GilroyPlace-Based Economic Development StrategyGilroy Hotel Visitation AnalysisItemLodging PerformanceTOT Collections (Thousands)Occupancy RateAverage Annual Occupancy Rate [1]Avg. Daily RateYear-Over-Year % ADR ChangeRevPar [2] [1] 2014: Reflects July to December. 2018: Reflects January to May.[2] Data has been collected by Visit Gilroy since only July 2017.Source: Visitation data compiled by Visit Gilroy based on Smith Travel Research reports.Jan Feb Mar Apr May$114.2 $117.0 $137.2 $147.9 $159.859.4% 68.9% 69.4% 72.3% 73.3%- - - - 68.7%$97.07 $94.98 $99.91 $106.82 $110.296.9% (0.2%) 2.4% 3.3% 3.9%$57.66 $65.47 $69.35 $77.27 $80.80visitor data2018Prepared by EPS 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2B-165.A.aPacket Pg. 177Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
APPENDIX C:
Excerpts from Gilroy City Planning Documents
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Public Review Draft | April 2018Section 3:
Land Use Designations
Land Use Designation
Density Range
(Dwelling Units
Per Gross Acre)
Maximum
Floor Area
Ratio
Allowed Uses
General Plan Designations
Hillside
Residential 1.0 - 4.0 N/A Single-family detached
Low-Density
Residential 3.0 - 8.0 N/A Single-family detached
Medium-Density
Residential 8.0 - 20.0 N/A Duplexes, townhomes, apartments
High-Density
Residential 0 - 20.0+N/A Townhomes, apartments
Neighborhood
District High
Varies
(see Page 11)N/A Variety of residential densities
Neighborhood commercial
Neighborhood
District Low
Varies
(see Page 11)N/A Variety of residential densities
Neighborhood commercial
State planning law requires general plans to establish “standards of population density and building intensity,”
as well as allowed uses for the various land use designations in the plan. As a part of the General Plan Update
process, residents, business owners, and interested parties are given the opportunity to evaluate and weigh in on the
appropriate land use types, densities, and intensities for different areas of the community, as well as on the form and
design of new development.
To support the description of each alternative, this section is written as a guide for understanding the different land
uses presented in the alternatives. Each land use included in Table 1 is described in terms of development standards
and allowable uses.
TABLE 1: GENERAL PLAN LAND USE DESIGNATIONS
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Land Use Designation
Density Range
(Dwelling Units
Per Gross Acre)
Maximum
Floor Area
Ratio
Allowed Uses
General Services
Commercial N/A 2.0
Retail, service, low-intensity commercial
operations with light industrial nature,
automobile sales
City Gateway N/A 2.0 Retail, service, office, visitor-serving
uses (hotels)
Mixed-Use
Low 20.0 - 30.0 2.5 Retail, service, office, residential
Mixed-Use
High 20.0 - 40.0 4.0 Retail, service, office, residential
General
Industrial N/A 3.0 Large scale manufacturing,
warehousing, distribution
Employment
Center N/A 3.0
Office campuses, research and
development, medical, high-tech, light
industrial
Industrial Park N/A 1.0 Light manufacturing, office, assembly
plants, warehouses
Open Space N/A N/A Open space, agricultural uses
Parks and
Recreation N/A N/A Parks and golf courses
Public and
Quasi-Public N/A N/A
Schools, civic centers, government
buildings, and similar public/quasi-
public uses
Rural County N/A N/A Rural residential, open space,
agriculture
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Neighborhood District Low and High
The Neighborhood District designation encourages
compact, complete, neighborhood-style
development that provides a variety of housing
types, neighborhood commercial center, schools,
parks, and open space. The goal is to create
neighborhoods that are predominantly single
family in character, but which integrate different
types and prices of housing to meet the full range
of housing needs. When possible, high-density
housing and commercial uses can be combined
to create vibrant mixed-use neighborhood centers.
To achieve a cohesive neighborhood character, a
specific plan is required prior to approval of new
development within the Neighborhood District.
The Neighborhood District designation is in the
currently-adopted General Plan, and applies to the
two large new growth areas within the UGB (Focus
Areas 1 and 2).
The question for this alternatives process is what mix
of housing densities is most appropriate for the new
growth areas designated Neighborhood District.
The Alternatives Report includes two Neighborhood
District designations: Neighborhood District Low
and Neighborhood District High. Neighborhood
District Low allows a greater percentage of low-
density single family units (up to 82 percent).
Neighborhood District High allows fewer low-
density single-family units (up to 60 percent) and
requires a greater variety of housing types.
Districts
0-7 dwelling units/acre 7-9 dwelling units/acre 9-16 dwelling units/acre 16-30 dwelling units/acre
Single-family Duplex
Small-lot Single-family,
Attached Single-family,
Apartments
Attached Single-family,
Apartments
Neighborhood District Low 82% max 5% min 10% min 3% min
Neighborhood District High 60% max 5% min 25% min 10% min
Note: Neighborhood District percentages are based on land area.
TABLE 2: NEIGHBORHOOD DISTRICTS DENSITY BREAKDOWN
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FIGURE 5: FOCUS AREA MAP
Most of Gilroy is not expected to change much
between 2015 and 2040. The five focus areas
shown below are places in and around Gilroy
where development and change is anticipated.
The land use alternatives process allows the
community to express opinions about the type
of development that should be planned for
those areas. This section of the report presents
different land use concepts for each of the
five focus areas. For each of the focus areas,
Concept 1 represents the 2015 Preferred Land
Use Alternative, amended to reflect the UGB.
Focus Area 1: Neighborhood District North
Focus Area 2: Neighborhood District South
Focus Area 4: Downtown Gilroy
Focus Area 3: First Street Corridor
Focus Area 5: Northeast Gilroy
Section 4:
Focus Area Concepts
Urban Growth Boundary
City Limits
Focus Areas
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Focus Area 1: Neighborhood District North
Neighborhood District North is a 277-acre area
located on the west side of the city, bound by
Santa Teresa Boulevard to the west, Day Road
to the north, Mantelli Drive to the south, and
Monterey Road to the east. The 2015 Preferred
Alternative for this area was Neighborhood District
High, which prior to the UGB Initiative extended
as far north as Fitzgerald Avenue. Almost all of the
land in Focus Area 1 is outside city limits, but is
within the UGB.
The four concepts below show two different Neighborhood
District Designations: Neighborhood District High, which allows
a maximum 60 percent low-density single-family units (i.e., 7
units per acre or less) and requires a greater variety of housing
types; or Neighborhood District Low, which allows a greater
percentage (up to 82 percent) of low-density single-family units.
Both designations require neighborhood commercial centers,
parks, and schools. Concepts 3 and 4 are similar to Concepts
1 and 2, but introduce an area for an employment center.
Concept 1
Neighborhood District High
(2015 Preferred Alternative)
The 2015 Preferred Alternative (amended by the
UGB) designates the entire focus area Neighborhood
District High (i.e., up to 60 percent low-density single-
family). Neighborhood District High also requires a
neighborhood commercial center, parks, and possibly
one or more schools.
Concept 2
Neighborhood District Low
Concept 2 designates the entire area Neighborhood
District Low (i.e., up to 82 percent low-density single-
family). Similar to Concept 1, Concept 2 also
requires a neighborhood commercial center, parks,
and possibly one or more schools.
7,590
Residents
1,190
SF Units
1,260
MF Units
240
Jobs
5,660
Residents
1,390
SF Units
440 MF
Units
240
Jobs
SF= Single-Family
MF= Multifamily
City Limits
Urban Growth
Boundary
City Limits
Urban Growth
Boundary
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Concept 3
Neighborhood District High with
Employment at Monterey Road
Concept 3 designates the area Neighborhood District
High (i.e., up to 60 percent low-density single-family),
and introduces an Employment Center along Monterey
Road.
Concept 4
Neighborhood District Low with
Employment at Monterey Road
Concept 4 designates the area Neighborhood District
Low (i.e., up to 82 percent low-density single-family), and
introduces an Employment Center along Monterey Road.
Districts
0-7 dwelling units/acre 7-9 dwelling units/acre 9-16 dwelling units/acre 16-30 dwelling units/acre
Single-family Duplex
Small-lot Single-family,
Attached Single-family,
Apartments
Attached Single-family,
Apartments
Neighborhood District
Low 82% max 5% min 10% min 3% min
Neighborhood District
High 60% max 5% min 25% min 10% min
Note: Neighborhood District percentages are based on land area.
6,220
Residents
970 SF
Units
1,030
MF Units
1,270
Jobs
4,640
Residents
1,140
SF Units
360 MF
Units
1,270
Jobs
City Limits
Urban Growth
Boundary
City Limits
Urban Growth
Boundary
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Focus Area 2: Neighborhood District South
Neighborhood District South is a 193-acre
area located in south Gilroy, bound by
Luchessa Avenue to the north, Thomas Road to
the west, Santa Teresa Boulevard to the south,
and the Uvas Park Trail and Gilroy Sports
Park to the east. A majority of Focus Area 2 is
outside the city limits, but is within the UGB.
The 2015 Preferred Alternative for this area
was Neighborhood District Low (i.e., up to
82 percent low-density single-family), which
is consistent with the adopted General Plan.
Concept 2 designates the area Neighborhood
District High, which would require a greater
variety of housing types.
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Concept 1
Neighborhood District Low
(2015 Preferred Alternative)
The 2015 Preferred Alternative designates the entire
focus area Neighborhood District Low (i.e., up to
82 percent low-density single-family). Neighborhood
District Low also requires a neighborhood commercial
center, parks, and possibly one or more schools.
Concept 2
Neighborhood District High
Concept 2 designates the entire area Neighborhood
District High (i.e., up to 60 percent low-density single-
family). Similar to Concept 1, Concept 2 also requires
a neighborhood commercial center, parks, and possibly
one or more schools.
SF= Single-Family
MF= Multifamily
3,960
Residents
970 SF
Units
310 MF
Units
170
Jobs
5,300
Residents
830 SF
Units
880 MF
Units
170
Jobs
City Limits
Urban Growth
Boundary
City Limits
Urban Growth
Boundary
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Focus Area 3: First Street Corridor
First Street Corridor is one of the primary
east-west routes through the city. This 76-
acre Focus Area includes the properties
fronting First Street between Santa Teresa
Boulevard to the west and Monterey
Road to the east. The 2015 Preferred
Alternative for this area was Mixed-Use,
which allows housing at 20-30 units per
acre and non-residential development at
an FAR of up to 2.5.
Concept 2 designates the area Mixed-Use High, which allows flexibility
for higher densities of 20-40 units per acre and a floor area ratio
of up to 4.0. Concept 3 retains a portion of the General Services
Commercial designation from the currently-adopted General Plan, and
introduces Mixed-Use High to some areas along the corridor. All three
concepts include a number of high-density residential sites, designated
by the Housing Element. Given the limited amount of vacant land and
the complexity of redeveloping the corridor, the housing unit and job
estimates are based on an assumption that only 25 percent of the
corridor redevelops by 2040.
Concept 1 Mixed-Use Low (2015 Preferred Alternative)
The 2015 Preferred Alternative designates most of this area Mixed-Use (i.e.,
20-30 dwelling units per acre and FAR of up to 2.5). Mixed-Use encourages
a mix of retail, office, high-density housing, plazas, and parks. Development
should be concentrated at major intersections and be pedestrian-oriented.
1,250
Residents
0 SF
Units
450
MF Units
580
Jobs
SF= Single-Family
MF= Multifamily
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Concept 2 Mixed-Use High
Concept 2 designates most of this area Mixed-Use High, which would
increase the allowable densities to 20-40 dwelling units per acre and
FAR of up to 4.0.
1,470
Residents
0 SF
Units
530
MF Units
750
Jobs
Concept 3 Commercial Focus
Concept 3 retains the existing General Services Commercial at the intersection
of Wren Avenue, which allows for a broad range of commercial uses (e.g.,
grocery stores, restaurants, banks, big box stores) and uses with “commercial
and industrial” characteristics, such as small welding shops and automobile
sales and services. This Concept designates the remainder of First Street
Mixed-Use High (i.e., 20-40 dwelling units per acre and FAR of up to 4.0).
1,140
Residents
0 SF
Units
430
Units
420
Jobs
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Focus Area 4: Downtown Gilroy
Significant change is anticipated for Downtown Gilroy. The
City adopted the Downtown Gilroy Specific Plan in 2005,
and is currently preparing a Station Area Plan, which will
update the Downtown Specific Plan and integrate the future
High Speed Rail (HSR) Station. The Station Area planning
process is still underway, and the steering committee has
selected a preferred land use alternative. This alternative has
not been adopted by the City Council and changes to the
preferred alternative may occur.
This General Plan alternatives process examines two different
concepts for Downtown Gilroy to provide a comparative
analysis of the potential citywide impacts of different land use
alternatives; however, the community is not being asked to
select a preferred alternative for the Station Area through this
General Plan process. The Station Area planning process is
the appropriate avenue for establishing the land use plan for
the Downtown and Station Area.
Concept 1 assumes no changes to the existing Downtown
Gilroy Specific Plan. Concept 2 reflects the current preferred
alternative for the Downtown Gilroy Station Area Plan.
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Concept 2
Station Area Plan
Preferred Alternative
Concept 2 reflects the Station Area Plan Preferred
Alternative, which proposes new land use designations
inside and outside the Downtown Specific Plan area,
including up to six stories of mixed-use housing and
office. See page 23 for information on the Downtown
Gilroy Station Area Plan.
10,210
Jobs
120
SF Units
2,330
MF Units
6,800
Residents
Concept 1
Existing General Plan
and Downtown Specific Plan
Concept 1 retains the land use designations from
the existing General Plan and reflects the existing
Downtown Gilroy Specific Plan. This concept
assumes that a high-speed rail station will not be
located Downtown. See page 22 for information
on the Downtown Gilroy Specific Plan.
3,110
Jobs
170 SF
Units
1,170
MF Units
3,720
Residents
SF= Single-Family
MF= Multifamily
Downtown Gilroy
Specific Plan
Boundary
Station Area Plan Land Uses
Mixed-use housing (up to six stories)
Mixed-use housing
(up to six stories)
Mixed-use office or
housing (up to six stories)
Civic/public facility
Office (up to five stories)
Visitor-serving commercial
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Downtown Gilroy Specific Plan (2005)
The Downtown Gilroy Specific Plan was adopted in 2005 to create a
unique downtown for the city and increase tourism. The Specific Plan area is
comprised of six land use districts, each with its own character, development
standards, and allowed uses.
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Station Area Plan (in process)
The Downtown Gilroy Station Area Plan is both an update to the existing
Downtown Sepcific Plan and a continuation of the High Speed Train (HST)
visioning process from 2011 to 2012. The Station Area Plan will act as a tool
to guide private development and public improvements in Downtown over the
next 25 years, with a focus on the area near the future HST station and railroad
tracks. The Station Area Plan process is still underway. In 2016, the project team
evaluated three alternatives for Downtown Gilroy. The community provided input,
and with guidance from the Citizens Advisory Committee, the project team created
a Draft Preferred Alternative. The Draft Preferred Alternative was presented to the
City Council in January 2017 where they reviewed and provided comments.
A decision by the High-Speed Rail Authority on the preferred location of the
Gilroy HSR Station has been delayed and the final commitment to proceed with
the project is still several months away. Due to this uncertainty, the City Council
decided to postpone a vote on a final preferred land use alternative until the High-
Speed Rail Authority finalizes its plans for the Gilroy Station.
The Draft Preferred Alternative for the Station Area
includes the following land use designations:
• Mixed-Use Housing: The mixed-use
designation encourages mixed-use style
development with ground floor retail and
high-density multi-family housing on the upper
floors. This designation is located along
Monterey Road and Old Gilroy Street and
allows development up to six stories.
• Mixed-Use Office or Housing: The mixed-
use housing and office designation provides
flexibility for mixed-use development to
incorporate office, housing, and retail uses.
This designation is in the core of the Station
Area adjacent to the future station site and
allows development up to six stories.
• Office: The office designation provides Class
A office space for research and development
and campus style projects. This designation is
located adjacent to the auto mall and allows
development up to five stories.
• Visitor-Serving: This designation provides
for visitor-serving uses, such as a hotel and
conference center.
SARAFIN
A
W
A
Y
MONTEREY ST
LEAVE
S
L
E
Y
R
D
OLD GILROY ST
W TENTH
S
T
W LUCHESSA AV
LEWIS S
T
CHURCH STMURRAY AVSWANSTON LNHANNA STFOREST ST
W NINTH
S
T
W SEVE
N
T
H
S
T
FIFTH S
T
FOURTH
S
T
THIRD S
T
SECOND
S
T
FIRST S
T
SIXTH S
T IOOF A
V
ELEVEN
T
H
S
T
MARTIN
S
T
EIGLEBERRY
STRAILROAD
ST
HOWSO
N
S
T
ALEXANDER ST
South ValleyMiddle SchoolSt MarySchoolSt MarySchool
CHESTNUT STALEXANDER ST
potential HSR platform and station location
historic
station
REGIONAL
RETAIL
+AUTO MALL
HOTEL/
CONF. CTR.
AUTO
RELATED
SERVICES
VS
potential HSR or public
facility location (Requires
agreement between city,
chsra, and/or school district)
0 1,000 2,000 Feet
Draft Preferred Alternative - Land Uses (11-21-2016)
City limit
Station Area Plan boundary
UP railway
HSR alignment (modified at-grade)
Proposed Land Use Change
HSR station and parking
Mixed use housing (up to 6 stories)
Mixed use office or housing (up to 6 stories)
Office (up to 5 stories)
Civic/public facility
Visitor serving
Large format retail
Heavy commercial/light industrial
Existing land use designation
Station building footprints
Expanded Arts Center
Park
Plaza
Gateway to Downtown
Gateway to Downtown Core
HSR alignment (aerial)SWANSTON LN
St MarySchoolSt MarySchool
H OWSON
S
T
FIRST ST
LEAVE
S
L
E
Y
R
D
Aerial Vertical Alignment
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Focus Area 5: Northeast Gilroy
Northeast Gilroy is a 349-acre area in the far
northeast corner of the city, bound by Monterey
Road to the west, Buena Vista Avenue to the north,
Leavesley Road to the south, and the UGB to the
east. A majority of Focus Area 5 is in the city limits,
excluding the far northwest and northeast corners
which are not in city limits, but are within the UGB.
Most of this focus area is designated Industrial Park
in the existing General Plan and includes St. Louise
Regional Hospital and the Gilroy Premium Outlets. The
2015 Preferred Alternative continued to emphasize
industrial development west of U.S. Highway 101
and north of the hospital, with General Services
Commercial proposed around the future Buena Vista
interchange and remainder of the outlet center. The
existing rural residential development and fragmented
ownership make this area less likely to develop in the
short term.
Concept 1
Industrial Park Emphasis
(2015 Preferred Alternative)
Concept 1 designates much of the focus area as
Industrial Park, with an area of Public and Quasi-Public
Facility for St. Louise Hospital and an area of General
Services Commercial for regional shopping, including
the Gilroy Premium Outlets.
0
Residents
0 SF
Units
0 MF
Units
2,960
Jobs
SF= Single-Family
MF= Multifamily
5.A.a
Packet Pg. 194 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Public Review Draft | April 2018
Concept 2
Neighborhood District High
North of Las Animas Avenue
Concept 2 designates the land north of Las Animas
Avenue and west of Highway 101 as Neighborhood
District High, consistent with the Neighborhood District
designation on the west side of Monterey Road.
6,120
Residents
960 SF
Units
1,020
MF Units
1,780
Jobs
Concept 3
Employment Center
North of Las Animas Avenue
Concept 3 designates a significant portion of land
previously designated Industrial Park as Employment
Center. The Employment Center designation allows
for employment development at a higher intensity than
Industrial Park.
0
Residents
0 SF
Units
0 MF
Units
7,090
Jobs
5.A.a
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5.A.a
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27
Public Review Draft | April 2018Section 5: Citywide
Land Use Alternatives
This section organizes the Focus Area
concepts within the greater context of
the city to create three citywide land use
alternatives. Each citywide alternative
reflects a variety of outcomes from
increased commercial development, and
more diverse housing stock, to additional
employment capacity, and a greater
emphasis of mixed use along corridors and
around transit. Since the Focus Areas are
the only areas of change, other areas in
Gilroy are assumed to retain their existing
General Plan land use designations. There
is, however, some assumed population and
job growth attributed to areas outside of
the Focus Areas through development of
vacant sites and redevelopment of some
underutilized sites.
Each Citywide alternative includes a map
showing the Focus Area concepts that
comprise the Citywide alternative and
depict proposed land use designations,
and a summary of the population, housing,
and jobs that each alternative would
support (i.e., the holding capacity).
It should be noted that not all Focus Area
concepts are reflected in a citywide
alternative. These options are equally
important to consider, however, as they
provide additional points of comparison.
As community members review the
alternatives, they are encouraged to
provide feedback on each Focus Area as
well as the citywide alternatives.
5.A.a
Packet Pg. 197 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
28
City of Gilroy | General Plan Alternatives Report
Citywide Alternative A
Alternative A is consistent with the 2015 Preferred Land Use Alternative selected at the end of the
original alternatives phase in 2015, but has been modified to reflect the UGB Initiative. Alternative
A contains a balance of single-family and multi-family housing, largely due to the alternative
including both Neighborhood District Low in the south and High in the north. Alternative A reflects
the currently-adopted Downtown Specific Plan. First Street includes a lower-density mixed-use
designation, which has the potential for multi-story housing, office, and retail development.
A
22,240
Residents
3,950
SF Units
3,340
MF Units
16,290
Jobs
SF= Single-Family
MF= Multifamily
Focus Area 1: Concept 1
Focus Area 2: Concept 1
Focus Area 3: Concept 1
Focus Area 4: Concept 1
Focus Area 5: Concept 1
Focus Area Selection
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Low-Density Residential
Medium-Density Residential
High-Density Residential
Neighborhood District High
General Services Commercial
City Gateway District
Mixed-Use Low
Employment Center
Industrial Park
Public and Quasi-Public
Downtown Specific Plan
Neighborhood District Low
City Limits
Urban Growth Boundary
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Visitor-Serving Commercial
Focus Area Land Use Designations
5.A.a
Packet Pg. 198 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
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Public Review Draft | April 2018
Citywide Alternative B
Alternative B includes all of the focus area concepts that maximize Gilroy’s housing and employment
holding capacity, including the Downtown Gilroy Station Area Preferred Alternative. In comparison
to the two other alternatives, this scenario includes a higher ratio of multi-family dwellings that are
spread throughout the community. This is largely due to the use of the Neighborhood District High
designation in both the northern and southern areas of the city, mixed-use high along the First Street
corridor, and mixed-use multi-family housing centered around the future high-speed rail station
downtown.
B
33,020
Residents
4,720
SF Units
6,170
MF Units
22,360
Jobs
SF= Single-Family
MF= Multifamily
Focus Area 1: Concept 1
Focus Area 2: Concept 2
Focus Area 3: Concept 2
Focus Area 4: Concept 3
Focus Area 5: Concept 2
Focus Area Selection
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Medium-Density Residential
High-Density Residential
Neighborhood District High
General Services Commercial
City Gateway District
Mixed-Use High
Industrial Park
Public and Quasi-Public
Downtown Specific Plan
City Limits
Urban Growth Boundary
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office Visitor-Serving Commercial
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Mixed-Housing
Mixed-Use Office/Housing
Office
Station Area Plan
Focus Area Land Use Designations
5.A.a
Packet Pg. 199 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
30
City of Gilroy | General Plan Alternatives Report
Citywide Alternative C
Alternative C retains the single-family character of Gilroy, while maintaining a dense downtown
core focused on infill and mixed-use development. Other large corridors such as First Street include
a lower-density mixed-use designation, which has the potential for multi-story housing, office, and
retail development. The sharp increase in employment in Alternative C is linked to the reduction
of Neighborhood District and Industrial Park in the north to accommodate the Employment Center
designation, which is meant to yield higher-intensity job types.
C
19,290
Residents
3,900
SF Units
2,440
MF Units
21,440
Jobs
SF= Single-Family
MF= Multifamily
Focus Area 1: Concept 4
Focus Area 2: Concept 1
Focus Area 3: Concept 1
Focus Area 4: Concept 1
Focus Area 5: Concept 3
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Focus Area Selection
Low-Density Residential
Medium-Density Residential
High-Density Residential
Neighborhood District Low
General Services Commercial
City Gateway District
Employment Center
Industrial Park
Public and Quasi-Public
Mixed-Use Low
Downtown Specific Plan
City Limits
Urban Growth Boundary
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Hillside Residential
Low Density Residential
Medium Density Residential
High Density Residential
Neighborhood District High
Neighborhood District Low
General Services Commercial
City Gateway District
Visitor Serving Commercial
Mixed-Use Low
Mixed-Use High
General Industrial
Employment Center
Industrial Park
Open Space
Parks and Recreation
Public and Quasi -Public
Rural County
Downtown Historic District
Downtown Expansion District
Civic/Cultural Arts District
Transitional District
Cannery District
Gateway District
Station Area Mixed-Use Housing
Station Area Mixed-Use Housing and Office
Station Area Office
Visitor-Serving Commercial
Focus Area Land Use Designations
5.A.a
Packet Pg. 200 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
APPENDIX D:
Financial Mechanisms Detail
Table D-1 Local, State, Federal Government, and Private-Sector
Funding Finance Options Detail (3 pages) ......................... D-1
Table D-2 Local Government and Private-Sector Funding Finance
Options Detail—Operations and Maintenance .................... D-4
5.A.a
Packet Pg. 201 Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 1 of 3Table D-1City of GilroyPlace-Based Economic Development StrategyLocal, State, Federal Government, and Private-Sector Funding Finance Options DetailMechanism Description Implementation Other ConsiderationsEnhanced Infrastructure Financing District (EIFD) Local agencies can establish an Enhanced Infrastructure Financing District (IFD) for a given project or geographic area of the jurisdiction. The EIFD captures incremental increases in property tax revenue from future development otherwise accruing to the county’s General Fund that can be used for to finance public capital facilities or other specified projects of communitywide significance, including, but not limited to, brownfield restoration and other environmental mitigation; the development of projects on a former military base; the repayment of the transfer of funds to a military base reuse authority; the acquisition, construction, or rehabilitation of housing for persons of low and moderate income for rent or purchase; the acquisition, construction, or repair of industrial structures for private use; transit priority projects; and projects to implement a sustainable communities strategy.Requires approval by every local taxing entity that will contribute its property tax increment and also requires 55 percent voter approval to issue bonds (landowner vote if less than 12 registered voters in jurisdiction). Under current statute, debt issuance is limited to short term debt, and constrained by the timing of property tax increment growth. Local jurisdictions considering dual implementation of Mello-Roos CFD (below) to accelerate and expand debt issuance capability.Additionally, a city or county that created a Redevelopment Agency (RDA) is prohibited from creating an EIFD unless:I. The Successor Agency of the former RDA (SARA) has received a finding of completion.II. The city or county certifies to the Department of Finance that no RDA assets subject to litigation have been or will be used to benefit an EIFD.III. The State Controller has completed a review of RDA asset transfers and the SARA and the city or county have complied with any review requirements.Initial debt capacity may not match need for required upfront capital costs.EIFD boundaries should carefully consider and balance objectives of maximizing capture of value increases and limited timeframe for allowable debt issuance (30 years from EIFD formation).EIFD could be combined with other financing mechanisms (e.g., CFD) to generate up front funding sources.Community Revitalization and InvestmentAuthorities (CRIA)Allows a city, county, or a special district - or any combination of these via entering a joint powers agreement - to establish a CRIA to revitalize disadvantaged communities through planning and financing infrastructure improvements and upgrades; economic development activities; and affordable housing via tax increment financing based, in part, on the former community redevelopment law.The entities forming a CRIA must produce and adopt a CRIA Plan (Plan) that guides its revitalization programs and authorizes receipt and expenditure property tax increment revenues. The Plan must include:- Statement of principal goals and objectives- Description of the deteriorated or inadequate infrastructure and program for repair and upgrade- Housing program- A program to remedy or remove the release of hazardous substances- A program to provide funding for or otherwise facilitate the economic revitalization of the area- A fiscal analysis setting forth projected receipt of revenues and expenses over five-year planning horizon- Time limits to establishing loans, advances and indebtedness and fulfilling all the authority's housing obligations.The Plan must be adopted over a series of three public hearings. Proceedings to adopt the Plan must terminate if there is a majority protest (50 percent or higher) from the combined number of property owners and residents in the area. An election on whether to adopt the Plan must be called if between 25 to 50 percent of the combined number of property owners and residents file a protest.25 percent of property tax increment revenues must be used to increase, improve, and preserve the community's supply of low and moderate income families.Additionally, A CRIA can be created in the following two locations:1. Areas where not less than 80 percent of the land contains census tracts or census block groups meet both of these conditions: (i) an annual median household income that is less than 80% of the statewide annual median income; and (ii) three of four following conditions:a. non-seasonal unemployment at least 3 percent higher than statewide average.b. crime rates at least 5 percent higher than statewide median.c. deteriorated or inadequate infrastructure, andd. deteriorated commercial or residential structures.2. A former military base that is principally characterized by deteriorated or inadequate infrastructure or structures.Capital FundingPrepared by EPS and Nossaman LLP 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2D-15.A.aPacket Pg. 202Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 2 of 3Table D-1City of GilroyPlace-Based Economic Development StrategyLocal, State, Federal Government, and Private-Sector Funding Finance Options DetailMechanism Description Implementation Other ConsiderationsCapital FundingStatewide Community Infrastructure Program (SCIP) Provides a pooled tax-exempt bond-financing program for development-impact fees and costs of public infrastructure such as roads, water, sewer, storm drainage, and parks for commercial, industrial, retail, and multi- and single-family residential developments. SCIP is administered by the California Statewide Communities Development Authority (CSCDA) - a joint powers authority sponsored by the League of California Cities and the California State Association of Counties. Under the SCIP, CSCDA issues bonds secured by property assessments.If a property owner chooses to participate in the SCIP, the selected public infrastructure and development-impact fees owed to the municipality will be financed by CSCDA's issuance of tax-exempt bonds. To pay debt service on the bonds, CSCDA will impose a 30-year special assessment on the participating owner's property. The assessments will be added to the county property-tax bill, and the annual assessment installments are calculated to be sufficient to pay annual debt service along with the administrative costs of SCIP and the municipality's costs of collecting assessments on the tax roll.The SCIP is available for development projects situated within cities or counties (Municipality) which have elected to become SCIP participants. A Municipality must be a member of the CSCDA and must adopt a resolution authorizing the Municipality to join the SCIP and for the CSCDA to accept applications from property owners within the Municipality to apply for tax-exempt financing through SCIP for public improvements and development impact fees.Once a Municipality has established said resolutions, property owners of property being developed within the Municipality may participate in the SCIP to allow the CSCDA to conduct assessment proceedings under the Municipal Improvement Act of 1913 and issue Local Obligations under the Improvement Bond Act of 1915 to finance fees levied on those properties and improvements, provided that the participating property owners voluntarily elect to participate and consent to the levy of the assessments.Mello-Roos Community Facilities District (CFD) Allows local agencies to create assessment districts and raise funds through special property taxes. Provides financing for public capital investment and operating improvements within the district through tax-exempt bonds sponsored by a public agency.Requires a 2/3rds approval in a resident (or land owner) vote to allow CFD special taxes to be collected.EIFD property tax increment may also be used as repayment source for debt service on municipal bonds.Initial debt capacity may not match need for required upfront capital costs.Voter Approved Tax Measures Voters can approve parcel or sales tax increases for a specific purpose or general revenue purposes. Annual revenue stream may be used as repayment source for issuance of municipal bonds (Special Tax or Tax Allocation Bonds). Requires 2/3rds voter approval for special tax and majority approval for general tax.Development Impact FeesOne-time fees charged to new development to cover "fair share" infrastructure cost needed to accommodate growth. Often a source of local "matching" funds.Approved by the governing body vote (does not require property owner approval).Other Fees & Exactions (including "in-lieu" fees) There are a number of other mechanisms such as project-specific fees and exactions that could be used as funding mechanisms.These can be negotiated on a case-by-case basis (e.g., Development Agreement) or approved generally for areas within the local jurisdiction, subject to a number of requirements.Prepared by EPS and Nossaman LLP 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2D-25.A.aPacket Pg. 203Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTPage 3 of 3Table D-1City of GilroyPlace-Based Economic Development StrategyLocal, State, Federal Government, and Private-Sector Funding Finance Options DetailMechanism Description Implementation Other ConsiderationsCapital FundingPrivate Capital/Developer EquityDevelopers may fund portion of infrastructure and facilities with private capital and/or commercial lending. A portion of such investment may be subject to reimbursement.Developers raise and organize private financing. Development Agreement(s) will specify terms of credits or reimbursement for such investments.Municipal Lease Financing An agreement to lease a public facility, with shares in the flow of lease revenue sold as a means of generating upfront revenue for the facility.Lease payments would come from the local agency annual budget and must be approved by the local agency (does not require voter approval).Requires identification of public asset to be pledged. Federal Grant Funding Program: Economic Development AdministrationSpecifically, under the Economic Development Assistance programs (EDAP) Federal Funding Opportunity (FFO) announcement, EDA will make construction, non-construction, and revolving loan fund investments under the Public Works and Economic Adjustment Assistance (EAA) Programs. Grants made under these programs will leverage regional assets to support the implementation of regional economic development strategies designed to create jobs, leverage private capital, encourage economic development, and strengthen America's ability to compete in the global marketplace. Through the EDAP FFO, EDA solicits applications from rural and urban communities to develop initiatives that advance new ideas and creative approaches to address rapidly evolving economic conditions.Local governments are eligible applicants. The maximum award is $3 million and the minimum award is $100,000. It is important to work with the Regional EDA Representative on the development of the application.capitalPrepared by EPS and Nossaman LLP 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2D-35.A.aPacket Pg. 204Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)
DRAFTTable D-2City of GilroyPlace-Based Economic Development StrategyLocal Government and Private-Sector Funding Finance Options Detail - Operations and MaintenanceMechanismDescriptionImplementationMello-Roos Community Facilities District (CFD) Allows local agencies to create assessment districts and raise funds through special property taxes. Provides financing for public capital investment and operating improvements within the district through tax-exempt bonds sponsored by a public agency.Requires a 2/3rds approval in a resident (or land owner) vote to allow CFD special taxes to be collected.Benefit Assessment District Benefit Assessment Districts allow cities, counties, or special districts to finance the costs of needed services by assessing area property owners. The governing body must generate a detailed professional engineer's report outlining the proposed assessment area, proposed project costs, annual cost to each property, and the benefit fomula used to determine each property's share of the cost.Requires a greater than 50 percent ballot approval that is weighted based on the financial obligation of each property owner.Benefit assessments cannot be based on property value. Eachassessment district includes a benefit formula and each parcel in the service area is assessed according to the specific benefit it receives from the services and improvements.General Fund Contributions/Dedications A dedication of General Fund property or sales tax revenue, low interest loans, one-time contributions, and other discretionary financial contributions.General Fund contributions are part of local agency annual budget appropriations process and must be approved by the governing body (does not require voter approval).Other Fees & Exactions (including "in-lieu" fees) There are a number of other mechanisms, such as project-specific fees and exactions, that could be used as funding mechanisms.These can be negotiated on a case-by-case basis (e.g., Development Agreement) or approved generally for areas within the local jurisdiction, subject to a number of requirements.Voter Approved Tax Measures Voters can approve parcel or sales tax increases for a specific purpose or general revenue purposes.Requires 2/3rds voter approval for special tax and majority approval for general tax.o&m detailSource: EPS.Operations & MaintenancePrepared by EPS and Nossaman LLP 12/4/2018P:\182000\182020 Gilroy Place-Based Economic Development Strategy\Models\182020 m2D-45.A.aPacket Pg. 205Attachment: Gilroy Placed-Based Economic Development Strategy (1896 : Corridor Study)