A N N U A L R E P O R T

Santa Maria Valley Chamber of CommerceVisitor and Convention Bureau

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The mission of the Santa Maria Valley Chamber of Commerce/Visitor & Convention Bureau is to “promote a favorable economic climate while making the Santa Maria Valley a better place to live and work.”

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Table of ContentsExecutive Summary.............................p 4

Tourism Metrics Overview....................p 5

Mission 1..........................................p 6

Mission 2.......................................p 13

Looking to the Future......................p 15

Summary......................................p 16

Appendix 1......................................p 17

Appendix 2....................................p 18

Appendix 3.....................................p 20

Appendix 4.....................................p 21

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ExecutiveSummaryThe 2015-2016 program year has been a very busy year for the Visitor & Conven-tion Bureau, as we have embarked on changes to the way we market our commu-nity to current and prospec-tive visitors.

The approval by the City Council in January 2016 of the Santa Maria Valley Tourism Marketing District has set us on a path that will signifi-cantly change the way we market by increasing both the resources available to us as well as providing the struc-ture for greater collaboration with our hotels and attraction partners.

The Visitor & Convention Bureau (VCB) is operated by the Santa Maria Valley Chamber of Commerce to serve two key purposes. First, the VCB acts as the primary marketing agency for the community’s efforts to attract visitors to the commu-nity. Second, the VCB works to ensure that visitors to our community are welcomed, provided with direction and connections, and in general

leave having experienced the best possible hospitality and experience during their stay.

Transient Occupancy Tax

Transient Occupancy Tax (TOT) does not capture the full

economic impact of visitors from outside the city as it tracks only the value of the overnight lodging portion of a visit, it does serve as a useful guide to track trends and activity. TOT also provides a useful guide to measure the direct impact of tourism on the City.

For the fiscal year including July 1, 2015 through June 30, 2016, TOT receipts in the City of Santa Maria totaled

$3,395,321.19, which repre-sents a new high water mark for this revenue stream. TOT receipts for 2015-16 versus the prior fiscal year grew by nearly $171,000 or 5.3%.

Longer term trends continue to show steady growth in TOT

with average growth over the past five years of 7.6% and a ten-year running average of 4.6%.

TOT continues to be not only a direct financial benefit to the City, but represents a positive return to residents as well. Given the current receipts, we estimate that TOT saves local residents an average of $125 per year per household in tax burden.

The approval by the City Council in January 2016 of the Santa Maria

Valley Tourism Marketing District has set us on a path that will significantly

change the way we market.

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46,071Website Views (3,839 per month)

1,229Facebook Likes

3,867Twitter Impressions per month

500Advertising Leads/Requests

385Tradeshow Leads/Requests

1,200Information Requests

200Group Service Requests

1,900Welcome Bags distributed

TOURISM METRICS OVERVIEWJuly 1, 2015 - June 30, 2016

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Mission 1:

The VCB serves as the lead organization in Santa Maria charged with the task of increasing the economic impact of tourism in our community. To achieve that objective, the VCB program includes a wide ranging program of activi-ties that include direct advertising, in-person sales efforts, public relations outreach, and distribution of collateral and informational pieces that influence potential visitors to select our community as part of their travel and event plans.

Increasing Awareness of Santa Maria Valley as a Premier Toursim and Group/Event Destination

Direct and Collaborative AdvertisingThis year, paid advertising placements included both print and digital publications targeting domestic and international tour operators, tournament and other event producers, and leisure travelers. When possible, the VCB participates in co-op advertising opportunities offered by our regional and state associations and/or coordinates co-op advertising with our local partners in an effort to extend the reach of our investments. Advertisements promoting the Santa Maria Valley were placed in the following during the past year:

• AAA’s Westways Magazine, full page Santa Maria co-op, March/April issue• Antelope Valley Press: Fall Getaways special• Base Guide and Telephone Directory for Vandenberg Air Force Base• California Road Trips (Sunset Magazine/Visit CA)• California State Visitors Guide• California Welcome Center/Oxnard: Banner Sponsorship• Central Coast Tourism Council Visitors Map: regional listing, event listing, and outdoor recreation listing• Keys to the Coast website• National Tour Association: Weekly E-Newsletter for NTA• National Tour Association’s Chinese Tour Operator Travel Directory (NTA)• Santa Barbara County Vintners Map• Visit Santa Barbara website (quarterly itinerary listing for barbecue and wine)• Yosemite Journal

While not all print ads include a mechanism to directly identify and track leads generated, some of the publications do provide direct response leads. For 2015-16, just over 500 leads were received as a result of various print ads. Those related to individual travelers were sent a follow-up email and an invitation to subscribe the VCB’s e-newsletter. Leads related to group or event opportunities were distributed to area hotels.

In addition to paid print advertising, the VCB promotes visits to our community at a number of trade and consumer events. Representatives from local hotels and other hospitality partners regularly join us at these events, increasing our ability to tell the story of Santa Maria. During the past year, the VCB generated 385 new leads through participation at the following events:

• Bakersfield Business Expo

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• San Diego Travel & Adventure Show• LA Travel & Adventure Show• Sunset Travel & Adventure Show (Sonoma)

Public Relations / Media

In addition to paid advertising, the VCB works aggressively to secure media coverage and placement of articles or information in publications that can influence groups or individuals who will be attracted to the Santa Maria Valley. A summary of our PR efforts includes the following:

Wine Country Outreach EventsThe VCB continued its relationship with the Think Tank, a collaborative of local wineries, to promote our region’s wines and by extension our community as a wine destination. Examples of the collaborative work we have supported with this partnership include:

• “Northern Santa Barbara County” Wine Tasting MapA grant from the VCB was used to develop a map of tasting rooms in Los Alamos, Orcutt and Santa Maria, including both “urban” and vineyard tasting rooms. Driving time between tasting rooms was used to help visitors plan their day, while bringing attention to the fact that there is a tasting room within 15 minutes in any direction.

A free tasting (with purchase) offer was used to assess the actual utility of the map, ultimately gaining 253 reported redemptions from 2,500 maps being distributed online and at physical locations (about a 10% redemption rate).

Maps were placed in hotel lobbies in Los Alamos, Los Olivos and Buellton. They were also made available at tasting rooms in Los Alamos, Los Olivos and Orcutt, as well as at welcome centers and various tourism shows.

The VCB grant was also used to test the distribution of these maps via an online landing page, with traffic being driven from search engine queries related to wine tourism in SLO and Paso Robles. 500 maps were digitally downloaded from this channel.

• In Market EventsThe VCB supported efforts to plan and promote wine tasting events in several markets. A blind tasting was held in Ventura in November, with six local wineries featured and attendance of 66 individuals. One third of the attendees reported that they had never visited the Santa Maria Valley prior to this event. As a result of the evening, 77 percent reported that they had discovered a new wine that they loved and all of the attendees indicated that they would consider planning a trip to the region within the coming year.

A second event is scheduled to be held in Bakersfield at the end of September.

United Kingdom Public Relations Co-op

The Central Coast Tourism Council (CCTC) is a regional marketing group for Visit California, promoting hotels, restaurants and attractions from Ventura/Oxnard up to Santa Cruz. As a member of the CCTC, Santa Maria partnered with other local communities to work with a public relations firm, Black Diamond, which specializes in travel media coverage in the United Kingdom. This partnership allows Santa Maria to be included in Familiarization tours with various groups and the opportunity to be included in travel media public relations efforts in one of our key international travel markets.

Canadian Collateral Swap

The VCB was invited to participate in a collateral ‘swap’ with Barkerville (British Columbia) Historic Town and Park. This

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promotion enabled us to place copies of the Santa Maria Visitor Guide in their local visitor center, while in return featuring their visitor brochures in our lobby.

Media Outreach

The VCB continues to work with Mooncatcher Communications for media outreach services. Working with their team, some recent activity and successes in this area include:

• Media Targeted Bulletins & E-NewslettersMooncatcher assisted the VCB in publishing seasonal editions of the VCB’s “Grapevine” media bulletin. The “Grapevine” features five to seven story “bites” to entice editors and journalists to report on Santa Maria Valley attractions and events.

• Press Releases Keep SMV Top of MindSubjects for press releases this year included the new Santa Maria Valley Visitor Guide; the new Tourism Marketing District; the West Coast Kustoms event; J. Wilkes Wines Poured at U.S. State Department; National Tourism Week; new local book on Civil War veterans; Santa Maria Style Barbecue; Santa Maria gains in TOT; a visiting speaker from VISIT CA; and more.

• Media Visits: Seeing is BelievingCoordinated a visit to the area and set up interview appointments and meals for Sarah Tenaglia, on assignment for Westways magazine. Provided detailed information on area barbecue spots and area history. Article published in the August 2015 issue. Stops included Far Western Tavern, Shaw’s, and Jocko’s Nipomo. Also collected quotes for her from area luminaries.

Coordinated visit and detailed itinerary and complimentary tours and meals for travel writer Katherine Belarmino of Travel the World (katherinebelarmino.com) as well as Passports & Cocktails (passportsandcocktails.com). Visit included Dunes Center, Oso Flaco Lake Trail, Filipino Community Food Truck, Riverbench Winery, Rancho Sisquoc Winery, Old Town Market, Cottonwood Canyon Winery, Historic Santa Maria Inn, Radisson Hotel, Museum of Flight, Daren’s Berries, the San Ramon Chapel and La Purisima. Resulted in two travel blog articles published in July of 2015 and August of 2015.

• Strategic Pitching Yields PlacementMedia relations also involves pitching story ideas and providing interview leads, photography and specific information. The past fiscal year involved work with USA Today; Westways magazine; 805 Living magazine; BBQ Magazine (Italy); San Jose Mercury News; Pacific Coast Business Times; KSBY-TV; San Luis Obispo Tribune; Santa Barbara News-Press; Santa Barbara Independent; and the Santa Maria Times.

Mooncatcher also regularly assists the VCB in pitching story ideas to umbrella destination marketing organizations such as the Central Coast Tourism Council, Visit Santa Barbara and Visit California’s What’s New publication. Subjects this past year included the Discovery Museum; downtown trolley; The Pad climbing gym; Hearst & Sugar confectionery; The Valley Art Gallery; 6 Degrees coffee house; The Dunes Center; and Rancho Bowl renovations.

• • Good Press! (The Highlights)Our work with media contacts resulted in a number of articles this year including a “wine and barbecue” story in the October 2015 issue of Sunset magazine; “Travel the World” blog, which published on August 15, 2015; “Backroads Touring” in the September 6, 2015 issue of the Los Angeles Times; a piece on KCBX on the local historic dairy book published by the Santa Maria Historical Society; an article on barbecue in the Napa Valley Register; and pieces on the TOT increase on KSBY in August of 2015; and “Santa Maria Beer Country” in the Santa Maria Sun on October 8, 2015. Articles on J. Wilkes wines in the Santa Maria Times and Pacific Coast Business Times that were inspired by a VCB press release; articles in the San Luis Obispo Tribune, Santa Barbara News-Press and Cervins Central Coast blog inspired by a VCB press release on West Coast Kustoms; articles about the new VCB Visitor ’s Guide in the Pacific Coast Business Times, KSBY-TV, Santa Maria Times, and others. A press release and pitching on behalf of the Civil War book published by the Santa Maria Historical Society and Museum generated extensive coverage from outlets including Lee Central Coast News; Santa Maria Sun; SLO Tribune; KSBY-TV; KCBX radio; Santa Barbara Independent and others.

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The August 2015 issue of Westways magazine delved into “the smoky allure of Santa Maria-style barbecue” in its four-page article entitled, “Open Pit.” Author Sarah Tenaglia introduces readers to the origins of Santa Maria Style Barbecue and local barbecue icons such as Ike Simas of the Santa Maria Elks Lodge and Frank Ostini of The Hitching Post II. She also analyzes what makes this style distinctive, quoting Simas: “In other parts of the country, they put sauces or rubs on the meat because they don’t use choice cuts . . . our meat is of the highest quality, and we like to taste it and not disguise it with alternative flavors.” The article also highlights three favorite dining locations: the Far Western Tavern, Jocko’s and the Hitching Post II.

Meanwhile, recent issues of 805 Living magazine and USA Today also celebrate the local barbecue scene. In its article called “Barbecue Vaquero-Style,” 805 Living magazine showcases the “zesty flavors brought to Santa Maria by the Spanish cowboys of the 1800s.” Writer Jaime Lewis shines a light on the Santa Maria Elks Lodge, Santa Maria BBQ Outfitters, Jocko’s Steak House, the Far Western Tavern and local seasonings such as Jocko’s Mix and Susie Q’s Brand Seasoning.

Digging further, USA Today uncovers “the secret fifth major style of American barbecue,” which is, of course, our very own Santa Maria Style Barbecue. The article touts some of the Santa Maria Valley’s barbecue stars, including the Hitching Post Casmalia; Shaw’s Steakhouse; Far Western Tavern; Old Town Market; Hitching Post II; A.J. Spur’s; Jocko’s Steakhouse; and F. McLintock’s Saloon.

Collateral Distribution

The VCB produces a number of collateral print pieces designed to tell the story of our community and to promote and facilitate specific visitor experiences. After several years without a comprehensive Visitors’ Guide, a new 32-page edition was published

in January 2016. The Guide featured Santa Maria history, barbecue, wine and beer, strawberries, recreational activities, arts and culture, and children/family activities.

Additionally, brochures focused on the area’s wine and beer industry and our barbecue traditions were updated and widely distributed. In addition to making these and other publications available at the Santa Maria Visitor ’s Center and at various community and retail locations in the community, the VCB partners with a company called Certified Folder Display to place the visitor guide and bbq brochure in the California Welcome Center/ Pismo Beach, and to distribute the wine/beer tasting brochure regionally to reach visitors at 68 locations in Santa Maria, Vandenberg Air Force Base, Guadalupe, Lompoc, Solvang, Buellton, and Santa Ynez. As a result of that partnership, a total of 9,000 pieces of literature were distributed during the past year.

Electronic Presence

In order to meet potential visitors and group planners where and when they are searching for information, the VCB maintains a significant presence online, engaging via websites, social media, blogs, and e-newsletters.

SantaMariaVisitor.com

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Currently, the VCB maintains a webpage that is available both through the Chamber’s main website (www.SantaMaria.com) and directly at www.SantaMariaVisitor.com. Traffic to this site continues to increase, with more than 46,000 page visits to the site during the past twelve months. We are particularly pleased to note that traffic during the most recent six months has increased even more, with the average number of monthly visits increasing from 3,500 during the first half of the fiscal year to more than 4,200. Additional key metrics of note this year include:

• The number of pages viewed by visitors once they are on the site increased by 12%.• The amount of time people spent on the site increased by over 15%.• The number of new visitors to the site increased by 4%. In total, new visitors represented 88% of the total traffic

to the site.

Analysis of the visitor activity associated with the site shows that, after the search engine referrals, the top referring sites to our information include:

• santamaria.com• cityofsantamaria.org• santamariavalleybbq.com• santamariawines.com• westcoastkustoms.com• dadcooksdinner.com• kamadoguru.com• lospadrescounty.net• santamariaedc.com• tailwindsofsantamariabc.com

While the majority of visitors looking at our site for information are located in California and other domestic markets, the site does receive visits from international markets as well. For the past year, the top international locations visiting our site included:

• United Kingdom• Canada• Brazil• India• Germany• Australia• Italy• South Korea• Netherlands

Social Media Presence

The VCB maintains an active presence on Social Media, distinct from that of the Chamber of Commerce. The VCB’s Facebook and Twitter accounts are used to highlight activities, events, and news about the Santa Maria Valley that would be of interest to visitors and friends outside the community. The reach and impact of these tools continues to grow, with the Twitter feed now followed by 999 individuals and our posts were seen by an average of 3,947 people each month. The VCB Facebook profile currently has 1,229 individuals engaging with the site.

Santa Maria BBQ Blog

The Official Santa Maria Style BBQ Blog allows for excellent online ownership of key search terms on Google, ranking very highly on the first page of organic results for terms such as Santa Maria Barbecue, Santa Maria BBQ and Santa Maria Style Barbecue. It also ranks on the first page of organic results for collateral terms such as Pinquito Beans and Santa Maria BBQ Red Oak.

The Official Santa Maria Style BBQ Blog is ultimately a success story of the VCB creating a site from scratch that has taken online ownership of a major visitor attraction by earning high search rankings and providing an authoritative

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educational resource for prospective visitors and anyone curious about this regional culinary tradition. The blog builds a high-profile search presence to inspire and inform journalists who are working on articles. Examples include filmmaker Noah Rosenstein who has produced “Over the Coals,” a documentary on Santa Maria Style Barbecue that premiered in August of 2015 at the Oceanside International Film Festival; and Bob Schwartz, who launched Italy’s first barbecue-themed magazine in May of 2016.

During 2015, a total of 22 posts were published, resulting in 61,000 page views. 2016 is on track for similar results, with 45,000 page views through the first eight months from nine posts have been published. As we move into the fall season and sync the blog with the developing TMD efforts, that pace will accelerate to reach 20 posts by year’s end.

E-Newsletters

The “Fresh Take” e-newsletter enables the VCB to reach and entice a growing number of opt-in subscribers and potential visitors with the latest news about events, deals and experiences in the Santa Maria Valley. The newsletter currently publishes on a quarterly schedule. The average subscriber base for last fiscal year was approximately 615 contacts. E-Newsletter posts have had an average “open rate” on e-newsletters was 30 percent, which is strong for this type of communication.

Additionally, the VCB reimagined and redesigned our “events highlight” publication that was provided to hotels and other tourism-supporting businesses. Now branded as #SantaMaria Fave 5’s, this e-newsletter highlights unique activities occurring in our area each weekend. Initially intended to be used by customer-serving staff to provide recommendations, this tool is now distributed via the Chamber’s e-blast system to all local business members and regularly appears on the Santa Maria Times website.

As these tool are synced with the new TMD marketing program, we expect to increase the frequency of e-newsletters to ultimately distribute on a monthly basis. We also expect the subscriber base to increase dramatically as the TMD marketing program drives individuals to the website and the opportunity to subscribe.

Special Project Grants

The VCB partners with a wide range of event producers to support their marketing efforts targeting visitors from outside of our immediate region. In total, the VCB provided approximately $65,000 to support a total of 25 events produced by 16 distinct organizations.

Grants are provided to organizations who demonstrate that their events meet the following criteria:

• Event/project is held in the Santa Maria Valley• Event/project must result in overnight stays at one or more Santa Maria hotel• Events held in Downtown Santa Maria and/or during the offseason of November to April are given preference• Sponsorship funds must be used to extend marketing efforts that target attendees from outside of Santa Maria

and its immediate neighboring communities

Grants issued during the 2015-16 fiscal year including the following:

1. 14th Annual Santa Maria All Ford Car Show & Swap Meet (Model A’s Ford Club, SM Chapter) 2. 1st Annual Car Show (St. Mary’s School)3. Autumn Arts Festival (PLAY)4. Bent Axles Car Show (Bent Axles Street Rods)5. Big Bottle Bash/Vintners’ Festival (SBC Vintners Association)6. Cruisin’ Nationals Kustom Car Show (West Coast Kustoms)7. Cruzin’ for Life Car Show & Cruise (Cruzin’ for Life)8. Elks Rodeo (Elks Recreation)9. Gala Fundraiser (The Dunes Center)

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10. October Short Course Opener Swim Meet (Santa Maria Swim Club)11. Rodeo Parade (Elks Rodeo)12. Santa Barbara County Fair (SM Fairpark)13. Santa Maria Junior Grand Prix Tennis Tournament (Central Coast Tennis) 14. Santa Maria Open Tennis Tournament (Central Coast Tennis)15. SM City Cruise (West Coast Kustoms)16. Sports Media Guide Advertising (AHC)17. Spring Long Course Coastal Championship Swim Meet (Santa Maria Swim Club)18. Strawberry Festival (SM Fairpark)19. Tae Kwon Do Championship (PLAY)20. Tour & Taste of the Valley (Boys & Girls Club)21. Truck & Tractor Pull (Elks Recreation)22. Windmill Century (Tailwinds Bicycle Club)23. - 25. Wine Tourism Projects (3 projects) (Santa Maria Wine Think Tank)

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Mission 2:In addition to activities designed to increase awareness of our community as a tourism destination and to convince travelers to include us in their plans, the VCB also provides leadership in ensuring that visitors receive the best support and hospitality our community can provide. Activities in this area range from serving as the Visitor Center for the community to providing resources and assistance to group organizers bringing audiences to the community.

Ensure visitors to Santa Maria are well served.

Visitor Center

Often the first stop for visitors, the Santa Maria Valley Chamber serves as the community’s visitor and information center. The center provides detailed information about local attractions, connections to individual businesses and activities, and general knowledge about the community and region. Additionally, the Visitor Center processes requests for information from individuals and organizations outside of the community, delivering visitor guides and a wide range of other collateral material both digitally, by phone, and by mail.

For 2015-16, the Visitor Center processed more than 1200 information inquiries, with about 40% of those being in-person and the rest coming in digitally or by phone.

Additionally, the Visitor Center team is responsible for ensuring that tourism-related information, primarily our Visitor Guide, is available at a number of locations around the community, ensuring that travelers can find resources when they are looking.

Finally, the Visitor Center team prepares VIP Welcome Bags for groups and VIPs visiting our community. These are provided at no cost to the event host. For 2015-16, more than 1,900 of these were created and distributed.

Group Services and Support

In addition to financial support, the VCB provides a wide range of services at no charge for meetings and conven-tions, family reunions, weddings, and sports tournaments as well as group tours and film projects. These services save planners time and money as our team provides business referrals, recommendations, and community information to assist with planning efforts. Examples of the types of services group/event planners can access through the VCB include:

• Activity planning, sample itineraries and themed event ideas• Banquet planning and dining options• Blank name badges and holders• Event facility availability• Hotel rates and availability• Jump Off the Bus! A Santa Maria Quick Trips program• Letter of Welcome• Publicity assistance• Registration assistance on the opening day of your meeting or event• Santa Maria Valley Profile Sheet for planners and tour operators• Site Selection assistance• Welcome Bags• Welcome Banner

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FAM Tours

On occasion, the VCB hosts Familiarization Tours – special itineraries designed to highlight our regions attractions and foodie offerings, as well as overnight accommodations. Depending on the opportunity, these visits can help to generate media coverage, or to finalize the decision of a group or event to come to Santa Maria. Some recent examples of Familiarization (Fam) Tours hosted by the VCB includes:

• Wine Country Fam Tour featuring the LA Wine Writers / June 22-23The VCB partnered with 3 local wineries to host a delegation of eight travel writers. This involved creating an itinerary that was suitable for the writers, contacting each venue regarding availability and confirmation and post-FAM, to share all social media posts. The VCB hosted the meals, accommodations and activities.

• Santa Maria Valley Immersion Tour / June 5-8The Tourism Marketing District hired a marketing firm, KPS3 to handle the scope of work needed to create a new brand and logo for the Santa Maria Valley, and also to implement the marketing plan outlined by Carl Ribaudo, of SMG Consulting. To this end, the VCB planned several days’ worth of visits to introduce the staff and principals of the company to Santa Maria Valley. This aided them in establishing a sense of place, sampling the true flavors of our area, meeting its people and key stakeholders, and experiencing firsthand all the best attractions a visitor will find here.

• Norwegian Airlines Familiarization Tour / May 22-23Because of our relationship with Visit California and the Central Coast Tourism Council, the VCB was invited to participate in a FAM to highlight our community to representatives from Norwegian Airlines, which is rapidly expanding service to both Oakland and Los Angeles. Attendees on this Fam Tour included employees for Norwegian Airlines, as well as a group of key travel agents who will be selling travel and transportation through this flight service. Visitors on the FAM were introduced to Shaw’s Steakhouse, Cambria Winery, Rancho Sisquoc Winery, the Holiday Inn Hotel & Suites, the Historic Santa Maria Inn, Oso Flaco Lake, and the Guadalupe-Nipomo Dunes Center.

• SoCal Food & Beverage Magazine Tour of Santa Maria / June 7-8The VCB received a referral from the Historic Santa Maria Inn, which led to a Fam Tour for a senior editor of SoCal Food & Beverage Magazine. The tour allowed us to spotlight our tasting rooms, vineyards and wineries for residents and visitors in the Southern California region. Local restaurants, including purveyors of our famous barbecue were included in the schedule.

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Looking to the Future...Much of the 2015-16 fiscal year was spent developing, authorizing, and planning for the launch of the new Tourism Marketing District. The District was formally approved by the City Council in January 2016 and assessment collection began by the hotels on February 1.

During the spring of 2016, the VCB worked with the local hotel leadership to develop the strategic foundation for a marketing program, create a brand which defined and captured the assets and unique value that we can offer to visitors, and to begin the creation of the tools and assets that will need to be in place when a full campaign is launched.

As we move into the fall of 2016, the TMD and VCB teams are working with our advertising agency and other partners to complete a new website, create marketing materials including print, broadcast, and digital ads, and identify the appropriate markets and media for our first full marketing campaign. That campaign and the new website will have a soft launch in October of 2016, with the campaign fully engaging following the federal election campaign season.

Significantly expanded marketing activity.

Visitor Center

Often the first stop for visitors, the Santa Maria Valley Chamber serves as the community’s visitor and information center. The center provides detailed information about local attractions, connections to individual businesses and activities, and general knowledge about the community and region. Additionally, the Visitor Center processes requests for information from individuals and organizations outside of the community, delivering visitor guides and a wide range of other collateral material both digitally, by phone, and by mail.

For 2015-16, the Visitor Center processed more than 1200 information inquiries, with about 40% of those being in-person and the rest coming in digitally or by phone.

Additionally, the Visitor Center team is responsible for ensuring that tourism-related information, primarily our Visitor Guide, is available at a number of locations around the community, ensuring that travelers can find resources when they are looking.

Finally, the Visitor Center team prepares VIP Welcome Bags for groups and VIPs visiting our community. These are provided at no cost to the event host. For 2015-16, more than 1,900 of these were created and distributed.

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SummaryThe Santa Maria Valley Chamber and Visitor and Convention Bureau is committed to growing tourism and group/event activity as part of our local economic vitality. We appreciate the support of the City of Santa Maria in recognizing the value of this segment of our local economy, and for providing resources to support these efforts. We also recognize the significant investments and efforts of our private sector partners who continue to improve their businesses and deliver exceptional customer service. This results in memorable experiences for Santa Maria visitors and repeat visits in the future.

As always, we invite you - our stakeholders and partners – to be part of the work the VCB does by actively participating in our programs and working with our VCB members. This means helping to spread the word on our affordable accom-modations and all there is to see and do in our city and bringing visitors to Santa Maria.

ATTACHMENTS

1. Sample Advertisements2. Media Coverage Report3. TOT Data4. Financial Statements

For Additional Information, please contact:

Glenn Morris, President & CEO805.925.2403 x825glenn@santamaria.com Jennifer Harrison, VCB Director805.925.2403 x815jennifer@santamaria.com

Terri Prouty, Group & Visitor Services805.925.2403 x851terri@santamaria.com

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Appendix 1:Sample Advertisements

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Appendix 2:

Pacific Coast Business TimesFebruary 19 – 25, 2016“Valley Scoop: Santa Maria Valley has a new magazine-style Visitor ’s Guide” – Inspired by press release

Santa Maria TimesMarch 15, 2016“New guide hopes to attract visitors to SM Valley” – Article inspired by press release

Pacific Coast Business TimesApril 29 – May 5“Santa Maria Forms Tourism District” – Worked with writer on details/provided information

Santa Maria TimesMay 5, 2016“Event recognizes tourism efforts” – Story inspired by press release

KSBYMay 5, 2016“Santa Maria Forms Tourism Marketing District” – Story inspired by press release

Cervins Central Coast (cervinscentralcoast.blogspot.com)May 13, 2016“Baby You Can Drive My Car: West Coast Kustoms” – Story inspired by press release

San Luis Obispo TribuneMay 23, 2016“Car Show Features Classic Batmobile” – Inspired by press release

Santa Barbara News-Press May 24, 2016“Our Town: Batmobile on view during car event ” – Story inspired by press release

BBQ Magazine (Italy’s first-ever bbq magazine, premier issue) www.bbqmagazine.itJune 2016

2015-16 Media Coverage Report

Cover story: “Santa Maria Barbecue” – Worked closely with writer on research; photography and sent samples of pinquito beans and Susie Q’s to Italy

Pacific Coast Business TimesJune 3 - 9, 2016“Wine for Washington” – Story inspired by press release on J.Wilkes Winery

Santa Maria TimesJune 8, 2016“J. Wilkes wines from Santa Maria Valley served at two U.S. State Department events” – Story inspired by press release

New Times (circ. 33,764)August 13, 2015“Good Press for BBQ” – Inspired by press release

Santa Maria Times (circ. 10,749)August 1, 2015“Good Press for BBQ” – Article inspired by press release

KSBY-TVAugust 31, 2015“TOT increase” – Story inspired by press release

Santa Maria Times (circ. 10,749)September 1, 2015“TOT increase” – Inspired by press release

Pacific Coast Business Times (circ. 2,896)July 31, 2015“Good Press for BBQ” – Story inspired by press release

Passports & Cocktails (blog)August, 2015“Santa Maria Valley Wine Country” – Story inspired by media visit

Westways Magazine (circ. 4,249,331)August 1, 2015“BBQ” – Provided information and interview leads to writer

Data Provided by:

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Travel the World (blog)August, 2015“destination story” – Inspired by media visit

Santa Maria Times (circ. 10,749)September 11, 2015“VCB presentation at SM City Council” – provided journalist with informationPacific Coast Business Times (circ. 2,896)September 10, 2015“TOT increase” – Story inspired by press release

Los Angeles Times (circ. 954,010)September 6, 2015“backroads touring” – Provided information to journalist

KCBS radioAugust 12, 2015“newly published historic dairy book” – inspired by press release

KSBY-TVSeptember 17, 2015“local Civil War book” - inspired by press release

Napa Valley Register (circ. 11,659)September 1, 2015“BBQ” – Provided information to journalist

Santa Maria Times (circ. 10,749)September 5, 2015“Santa Maria Beer Country” – Article inspired by press release

Sunset Magazine (circ. 1,264,308)October 2015“wine and bbq” – Story inspired by media pitch

Santa Maria Sun (circ. 17,505)October 8, 2015“Santa Maria Beer Country” – Inspired by press release

Pacific Coast Business Times (circ. 2,896)October 22, 2015“The Pad – Climbing Gym” – Story inspired by media pitch

Santa Maria Times (circ. 16,121)October 24, 2015“Visit CA Presentation” – Article inspired by press release

Chowhound.com October 26, 2015“BBQ”

Washington Post (circ. 431,521)October 28, 2015“BBQ” – Story inspired by media pitch

What’s New (VISIT CA)November 2015“Dunes Center” – Inspired by pitch

What’s New (VISIT CA)November 2015“Discovery Museum” – Inspired by pitchPacific Coast Business Times (circ. 2,896)November 5, 2015“Visit CA Presentation” – Story inspired by press release

Santa Maria Times (circ. 16,121)November 5, 2015“New Civil War Book: Cemetery Walking Tour” – Article inspired by press release

Noozhawk.comNovember 9, 2015“BBQ – CA DreamEater” – Inspired by press release

New Times (circ. 35,244)November 19, 2015“BBQ – CA DreamEater” – Inspired by press release

Santa Maria Sun (circ. 17,505)November 19, 2015“BBQ – CA DreamEater” – Inspired by press release

Santa Barbara Independent (circ. 40,000)November 23, 2015“BBQ – CA DreamEater” – inspired by press release

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Appendix 3:Transient Occupancy Tax Data

TRANSIENT OCCUPANCY TAX COMPARISON

(BASED ON THE MONTH THE ACTUAL RENTAL OCCURRED)

2015-16 2014-15 MONTHLY YTD

MONTHLY YTD MONTHLY YTD % INCREASE % INCREASE MONTH TOTAL TOTAL TOTAL TOTAL (DECREASE) (DECREASE)

JULY

359,488.97

359,488.97

309,554.89

309,554.89 16.13% 16.13%

AUGUST

330,118.99

689,607.96

316,543.54

626,098.43 4.29% 10.14%

SEPTEMBER

383,594.45

1,073,202.41

318,422.91

944,521.34 20.47% 13.62%

OCTOBER

267,901.94

1,341,104.35

252,065.32

1,196,586.66 6.28% 12.08%

NOVEMBER

196,452.24

1,537,556.59

190,094.52

1,386,681.18 3.34% 10.88%

DECEMBER

251,121.24

1,788,677.83

236,492.32

1,623,173.50 6.19% 10.20%

JANUARY 177,927.10

1,966,604.93 174,074.24

1,797,247.74 2.21% 9.42%

FEBRUARY

195,538.15

2,162,143.08

197,275.41

1,994,523.15 -0.88% 8.40%

MARCH

294,837.15

2,456,980.23

302,834.90

2,297,358.05 -2.64% 6.95%

APRIL

241,636.31

2,698,616.54

247,547.61

2,544,905.66 -2.39% 6.04%

MAY

274,154.06

2,972,770.60

268,708.33

2,813,613.99 2.03% 5.66%

JUNE

422,550.59

3,395,321.19

410,798.70

3,224,412.69 2.86% 5.30%

$3,395,321.19 $3,224,412.69

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Appendix 4:Financial Statements

Santa Maria Valley Chamber of Commerce / Visitor & Convention Bureau / Economic Development Commission Income Statement, FY2016

Total

Chamber Total EDC Total VCB TOTAL

Income 41000 · Membership Dues & Program Fees 41100 · New Members Dues 25,213.50 0.00 0.00 25,213.50

41200 · Processing Fees 1,725.00 0.00 0.00 1,725.00

41300 · Renewing Members Dues 169,470.00 0.00 0.00 169,470.00

Total 41000 · Membership Dues & Program Fees 196,408.50 0.00 0.00 196,408.50

42000 · Program Revenues 42100 · Program Fees 61,054.00 0.00 0.00 61,054.00

42200 · Program Sponsorships 41,255.00 0.00 0.00 41,255.00

42300 · Program Contract Income 188,750.00 154,620.00 549,770.00 893,974.26

Total 42000 · Program Revenues 291,059.00 154,620.00 549,770.00 996,283.26

43000 · Contributions 43100 · Voluntary Dues Contributions 7,825.00 0.00 0.00 7,825.00

Total 43000 · Contributions 7,825.00 0.00 0.00 7,825.00

50000 · Advertising Revenues 1,380.00 0.00 0.00 1,380.00

53000 · Sales & Royalties 53100 · Non-taxable Sales 385.00 0.00 0.00 385.00

53200 · Retail Product Sales 41.57 0.00 14.24 55.92

53300 · HR Product Sales 1,834.58 0.00 0.00 1,834.58

53700 · Affinity Program Royalties 10.83 0.00 0.00 10.83

Total 53000 · Sales & Royalties 2,271.98 0.00 14.24 2,286.33

59000 · Miscellaneous Income 59100 · Interest Income 301.55 102.85 308.47 712.87

Total 59000 · Miscellaneous Income 301.55 102.85 308.47 712.87

Total Income 499,246.03 154,722.85 550,092.71 1,204,895.96

Expense

61000 · Administrative Expenses-Shared 61100 · Advertising - General 19,366.00 7,161.00 21,789.00 48,316.00

61200 · Bad Debt Expense 0.00 0.00 0.00 0.00

61300 · Bank and Finance Charges 2,009.40 532.50 1,502.67 4,044.57

61400 · Board of Directors Expenses 560.14 318.83 956.38 1,835.35

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61500 · Equipment Rent & Maintenance 4,826.24 1,809.97 5,429.56 12,065.77

61600 · Insurance 2,443.60 916.35 2,749.05 6,109.00

61700 · Office Supplies 4,557.31 1,835.19 5,084.28 11,476.78

61800 · Postage & Shipping 3,062.99 1,158.04 3,548.91 7,769.94

61900 · Sponsorships & Contributions 12,691.80 4,196.99 12,590.77 29,479.56

Total 61000 · Administrative Expenses-Shared 49,517.48 17,928.87 53,650.62 121,096.97

62000 · Building Expenses - Shared 62100 · Building & Grounds 2,607.11 977.52 2,931.72 6,516.35

62200 · Facility Maintenance 627.77 248.62 693.09 1,569.48

62300 · Office Rent 9,269.55 3,476.08 10,428.25 23,173.88

62400 · Property Taxes 694.00 260.26 780.75 1,735.01

62500 · Storage Rent 1,061.60 398.10 1,194.30 2,654.00

62700 · Telephone & Internet 4,910.46 2,027.52 5,338.50 12,276.48

62900 · Utilities 2,438.07 914.55 2,742.86 6,095.48

Total 62000 · Building Expenses - Shared 21,608.56 8,302.65 24,109.47 54,020.68

63000 · Personnel Expenses - Shared 63100 · Salaries & Wages 186,754.34 70,032.89 210,098.64 466,885.87

63200 · Payroll Taxes 15,826.35 5,934.92 17,804.65 39,565.92

63300 · Benefits Contributions 34,032.85 12,762.43 38,286.92 85,082.20

63400 · Retirement Contributions 2,596.00 973.50 2,920.50 6,490.00

63500 · Payroll Fees 146.29 69.05 150.41 365.75

63600 · Workers Comp Insurance 1,205.60 452.10 1,356.30 3,014.00

Total 63000 · Personnel Expenses - Shared 240,561.43 90,224.89 270,617.42 601,403.74

64000 · Professional Services - Shared 64100 · Accounting & Legal Service 2,772.00 1,039.50 3,118.50 6,930.00

64200 · HR Support Services 1,872.74 702.28 2,106.85 4,681.87

64300 · Investment Services 1,640.65 615.29 1,845.73 4,101.67

64700 · Technology Support Services 5,638.58 2,114.47 6,343.40 14,096.45

64900 · Other Contracted Services 8,446.40 3,167.40 9,502.20 21,116.00

Total 64000 · Professional Services - Shared 20,370.37 7,638.94 22,916.68 50,925.99

71000 · Operations Expenses 71100 · Committee Expenses 1,017.68 60.00 0.00 1,077.68

71200 · Contract Expenses 60,410.07 0.00 0.00 60,410.07

71400 · Member Supplies 2,058.52 0.00 0.00 2,058.52

71600 · Staff Meals 1,711.85 834.97 1,329.71 3,876.53

71700 · Staff Mileage 2,477.51 962.08 2,045.05 5,484.64

71800 · Travel Expenses 2,264.93 922.41 328.14 3,515.48

71900 · VAFB Expenses 2,500.11 0.00 0.00 2,500.11

Total 71000 · Operations Expenses 72,440.67 2,779.46 3,702.90 78,923.03

72000 · Prof. Development Expenses 72100 · Dues & Subscriptions 3,865.84 929.17 2,658.32 7,453.33

72200 · Education & Training 2,178.95 2,115.16 0.00 4,294.11

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Total 72000 · Prof. Development Expenses 6,044.79 3,044.33 2,658.32 11,747.44

73000 · Marketing & Sales Expenses 73100 · Advertising Expenses 1,384.48 15,412.80 41,509.97 58,307.25

73200 · Business Attraction Expenses 144.60 6,963.48 2,478.82 9,586.90

73300 · Marketing Collateral Expenses 0.00 0.00 19,716.04 19,716.04

73400 · Product Sales Expenses 1,697.55 0.00 0.00 1,697.55

73500 · Public Relations Expenses 3,189.02 1,283.50 28,631.81 33,104.33

73600 · Special Event Grants 0.00 0.00 67,190.00 67,190.00

73700 · Trade Show Expenses 0.00 0.00 21,654.12 21,654.12

73800 · Website & Social Media Expenses 383.09 277.97 407.94 1,069.00

Total 73000 · Marketing & Sales Expenses 6,798.74 23,937.75 181,588.70 212,325.19

81000 · Event Expenses 81100 · Advertising & Promotional 3,754.59 0.00 0.00 3,754.59

81200 · Awards & Plaques 5,917.46 64.41 0.00 5,981.87

81300 · Catering 49,798.21 0.00 647.01 50,445.22

81400 · Entertainment & Speaker Fees 3,394.75 0.00 100.00 3,494.75

81500 · Facility & Decorations 12,575.82 3,386.30 0.00 15,962.12

81700 · Miscellaneous Event Expenses 7,093.28 227.76 119.18 7,440.22

Total 81000 · Event Expenses 82,534.11 3,678.47 866.19 87,078.77

Total Expense 499,876.15 157,535.36 560,110.30 1,217,521.81 Net Income -630.12 -2,812.51 -10,017.59 -12,625.85

Accrual method

614 S. BroadwaySanta Maria, CA 93454Tel: (805) 925-2403info@santamaria.comwww.santamaria.com

A N N U A L R E P O R T

Santa Maria Economic Development Commission

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2 | S A N T A M A R I A E C O N O M I C D E V E L O P M E N T C O M M I S S I O N

The mission of the Santa Maria Valley Economic Development Commission is to advocate and promote economic growth and vitality throughout the Santa Maria Valley

Table of ContentsExecutive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . .p 4

About the EDC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p 5

Economic Prof i le & Act iv i ty . . . . . . . . . . . . . . .p 6

Strategic Initiatives................................p 8

FY 2016-17 Priorities & Opportunities.............p 14

Appendix 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p 15

Appendix 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p 16

Appendix 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p 18

Appendix 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p 21

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ExecutiveSummaryThe Santa Maria Valley Chamber of Commerce’s Economic Development Commission has spent the past year refining its processes and identifying new tools and resources which we believe will help us meet our twin objectives, e.g. support the growth and success of existing local business while promoting our community as a premier business location opportunity.

Changes at the staff level continue as we identify the right individual to lead this effort. As this report is drafted, the Chamber is interviewing a number of candidates and expects to have an individual on board shortly.

New tools and partnerships are being put into service that will enhance the EDC’s ability to raise awareness of its services and economic opportunities for the area, deliver relevant, service-oriented information to local business owners and startups, as well as help offer business research and competi-tive intelligence by industry and region.

Significant steps have been taken to strengthen the EDC’s relationships with organizations and allies in the community and across our region as a way to leverage efforts toward economic vitality and growth.

Among the groups are:

• Economic Vitality Team of Santa Barbara County

• EconAlliance• Santa Barbara County

Workforce Development Board

• Softec• SCORE• SBDC

Additionally, the EDC maintains close ties with the local office of the Employment Develop-

ment Department, MIYB Spaces, chambers of commerce in communities across our region, and the Home Builders Associa-tion of the Central Coast.

The Chamber and EDC have

become further engaged with our local educational partners to address workforce readiness issues. Specifically, we have partnered with the Santa Maria Joint Union High School District to provide connections, advice, and support as they build their Career Pathways program. We are also an active participant with the County Workforce Develop-ment Board on a grant-funded program targeting youth employ-ment training and experiences.

Significant steps have been taken to strengthen

the EDC’s relationships with organizations and

allies in the community and across our region

as a way to leverage efforts toward economic

vitality and growth.

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About the Economic Development CommissionThe Economic Development Commission (EDC) is a department of the Santa Maria Valley Chamber of Commerce, which partners with the City of Santa Maria and the Santa Maria Public Airport to market our community to prospective companies. The EDC also provides business retention programs geared toward strengthening our current base of industrial, retail and manufacturing. The City of Santa Maria has made a continuing investment in economic devel-opment by providing funding for the EDC. The Santa Maria Public Airport District also contributes. The Chamber of Commerce provides the additional necessary resources and financial support to accomplish the activities that the EDC currently offers.

The EDC has been consistent in its advertising and marketing efforts, making sure that Santa Maria is on the radar screen of companies looking to relocate and expand. The EDC:

• Promotes the many advantages of Santa Maria as a prime business location• Provides business information to potential and existing companies• Works directly with local agencies, commercial brokers and the City of Santa Maria to provide information,

resources and contacts for both new and expanding businesses• Features active involvement with agencies that provide incentives, workforce training, and outreach to businesses

and organizations.

The EDC and the Chamber of Commerce appreciate the continued support from the City of Santa Maria, the Santa Maria Public Airport, and the many businesses and organizations that participate in its programs.

Economic Development Commission Members

During the past fiscal year, the Economic Development Commission was restructured. Individuals were selected and invited to become members of the EDC because of a specific role that they play in the local development community. The Commission is charged with providing input and direction to the EDC staff to identify key barriers to economic growth and the development of action plans designed to address specific issues. The Commission also ensures accountability on those action plans as we report on progress, lessons learned, and successes achieved. The current Commission membership, appointed by the Chamber Board of Directors and/or the respective partner organization, includes the following individuals:

Larry Appel, City of Santa MariaDan Blough, Dan Blough Construction (CRE Developer)Jim Bray, Pacific Coast Energy (Energy)Anne Cremarosa, MIYB Spaces (Sm. Business)Dave Cross, Fletcher Cross Associates (Land Use/ Planning)Danny Deveraux, CalPortland (Transportation)Jason Diani, Diani Companies (Gen. Contractor)Mark Fugate, Charter Brokerage (CRE Developer)Angelica Gutierrez, Rabobank (Banking)Tony Guy, Zodiac Cabin Interiors (Lrg Employer)Jay Hardy, Hardy Diagnostics (Lrg Employer)Chris Hastert, Santa Maria Public AirportRick Haydon, City of Santa MariaRob Himoto, SMV Railroad (Transportation)

Mike Kirkwood, Community West Bank (EconAlliance)Sofia Lariz, Emerald Broadcasting (Sm. Business)Kerin Mase, Marian Regional Medical Center (Healthcare)Tim Ritchie, Home Motors (Chamber Board)Steve Scott, Scott Construction (Gen. Contractor)David Swenk, Urban Planning Concepts (Land Use/ Planning)Dr. Kevin Walthers, Allan Hancock College (Education)Brooks Wise, Heritage Oaks Bank (Banking)

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Business Name Address Size (sq ft)

Type # of Employees

Crunch Fitness Town Center East 40,000 Fitness Center 20

DCCA 2811 Airpark Drive 13,000 VAFB Engineers 50

Dunn Edwards 2339 S Broadway 5,500 Pain store 5

Glopak 3070 Skyway 17,000Wine Glass Distribution

5

Hans Duus Blacksmith2976 Industrial Parkway

6,000Blacksmith/ Specialty Lighting Fixtures

10

Maxco 807 W Main 40,000Agricultural Packaging

10

MindBody 2815 Airpark Drive 15,000Call Center & Admin

100

MIYB Spaces 731 S Lincoln 7,000 Business Services/Co-Work Space

5

Rabobank 2100 S. Blosser 63,000Regional Banking Admin

350

SM Tire 619 S Oakley 23,000 Manufacturing 10

Solve-it! Engineering 2360 Thompson 4,800 Manufacturing 10

Wine direct 1427 Fairway Drive 50,000Case Goods Distribution

10

New and Expanding Business (Sample of 2015-16 Activity)

Economic Profile and Activity

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Year Labor Force Employed Unemployed Unemp. Rate

2016 (prelim) 49,100 46,300 2,900 5.8%

2015 48,200 45,300 2,900 6.0%

2014 48,200 44,800 3,500 7.2%

Santa Barbara County 223,900 213,200 10,700 4.8%

SLO County 142,500 136,000 6,500 4.6%

Santa Maria City Workforce Data (August 2016)

Business Satisfaction Survey

Business Improved over prior year 71%, with 29% saying “much improved”Expect Continued Improvement 60%Expect to Hire This Year 44%Top concerns Rising costs Continued slow growth in economy Increasing cost of regulation Health care costs Finding trained workers

Current Economic Development Metrics (Last 6 months)

Website Page Views: 4,800Inquiries/Assists/Projects: 30

8 | S A N T A M A R I A E C O N O M I C D E V E L O P M E N T C O M M I S S I O N

Primary to the mission of the EDC is to provide assistance and support for businesses looking to expand, shore up their operations, or start in the city. The EDC regularly receives requests from businesses looking for information, connection to resources, assistance with regulatory processes, or advice about their business.

Expanding the Network of Business Services.

In addition to providing a number of resources that we can share in person or via our website, the EDC has committed to strengthening the network of business support services available to local businesses in our community. This strategy recognizes that many times businesses need specialized information or assistance and that we have partners who are better positioned to provide those specific services.

In 2015-16, the EDC was pleased to work with the SCORE organization as they entered the community and began providing consulting services to residents and businesses in Santa Maria. SCORE was featured at a Chamber mixer in May and has been cooperating with the Chamber to provide informational articles in our monthly newsletter. Addition-ally, the EDC has been working with the SBA Small Business Development Center serving Ventura and Santa Barbara Counties to expand their services into northern Santa Barbara County. The SBDC was successful in securing a grant to support business outreach in our area as part of a service expansion. The EDC will be working with SBDC to identify potential clients and to recruit consultants to work in our area.

Expanding Online Resources

Many new business owners and those already operating small businesses need access to business support off-hours, when it’s convenient for them to access the information. To serve this need and to make available free tools to all businesses in the community, the EDC has focused on adding new tools to its website.

Tools for Business offers ready-made answers and links to additional resources for business owners. Among some of the categories information seekers can explore include:

• See Everything Local• Start a Business• Grow my Business• Hire/Manage Employees• Get Business Training• Go Green• Find Financing / Manage Money• Protect my Business• Comply with Government Requirements

SizeUp allows business owners to compare their business performance to others in the industry throughout the region. SizeUp provides three core features that enable business owners to make more intelligent decisions.

• Benchmark your business - See how your business sizes up by comparing your performance to all other competitors in your industry. Isolate areas where you can improve and find ways you can save money.

• Map your competition - Map where your competitors, customers, and suppliers are located. Determine how you can best serve existing customers, find new customers, and pick suppliers. Use the map to isolate areas

Strategic Initiatives

Strategy I: Provide services to support business expansion and retention activities within the

City of Santa Maria.

At the beginning of the 2015-16 program year, the EDC reaffirmed its primary roles and objectives related to creating a vital local economy. This report will highlight the key strategies and activities undertaken this year related to each of the key areas.

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with many potential customers but little competition.• Find the best places to advertise - Identify the best areas to target your next advertising campaign. Choose

from pre-set reports to find areas with the highest industry revenue, most underserved markets, and where average business revenue is highest, or create your own custom demographic and/or business report.

Connecting Businesses to Opportunities and Resources

The EDC continued this year to provide a wide range of meetings, events, and special programs for local businesses. These ranged from job fairs to business tours to special events at which local businesses could connect with each other and with national business opportunities. Some highlighted events held during the past year include:

• Vandenberg Small Business Outreach Event. This annual event connects both local and out-of-area businesses with the contracting program at Vandenberg. Presenters from the base share information about how to become a vendor or contractor to their programs. Additionally, representatives from units at the base who have the ability to purchase local products or services attend the event to connect with businesses and discover potential new vendors.

• Industry Tours and Forums. Formerly branded as Manufacturing Association events, these programs offer local businesses the opportunity to tour local businesses and/or to hear updates about significant economic impacts in the community. Programs in 2016 included tours of the Santa Maria Times and Mission Hope Cancer Center, along with forums featuring a business forecast panel featuring local executives, an update from the Santa Maria Public Airport and an overview of current opportunities and issues related to the Santa Maria Valley Railroad.

• Trade Show and Job Fairs. In addition to the Santa Maria Chamber Business Expo, the EDC also partnered with local workforce agencies to sponsor two job fairs during the year.

Connecting Businesses to Opportunities and Resources

The EDC either manages or provides leadership to a number of regional business partnerships, each designed to provide specialized resources to local businesses. Among these programs are the Santa Barbara County Energy Watch Partnership, the Recycling Market Development Zone, and the Green Business Program of Santa Barbara County.

• The Chamber of Commerce/EDC is the Partnership Administrator of the Santa Barbara County Energy Watch Partnership program. The purpose of the partnership is to assist municipalities and businesses with retrofit options that provide energy efficiency and cost savings. Partners include PG&E and SoCal Gas, along with the City of Santa Maria, County of Santa Barbara, Guadalupe, Solvang and Buellton. Since January 2015, the program has assisted 58 Santa Maria businesses, resulting in significant savings both of energy and cost.

• In 2016, the EDC became the Zone Administrator in Santa Barbara County for the Recycling Market Devel-opment Zone (RMDZ). This program operates under the California Integrated Waste Management Board (CIWMB) and combines economic development and recycling goals by promoting the processing and use of recycled materials to produce new products. Through the RMDZ Program, a variety of incentives are offered to businesses that use recycled materials to make new products, including below market rate loans, targeted marketing assistance such as feedstock sourcing, networking with other businesses, zones, and governmental agencies, and referrals for business planning, etc.

• The EDC is a leading funder and member of the steering committee for the Green Business Program of Santa Barbara County. The program provides resources and assistance to businesses wanting to be green, certi-fies businesses through workshops and trainings, on-site visits & evaluation, and highlights certified businesses so that local consumers can shop green.

The Santa Maria Public Airport District as an Economic Driver.

The Santa Maria Public Airport District represents a unique and critical element of our local economic vitality. In addition to being a key connection to the rest of the world, the Airport currently hosts a significant number of businesses and is actively working to expand the number of businesses operating on its property.

The EDC works regularly with the Airport management to support their efforts to create economic activity through increased commercial air travel, attraction of additional airport uses such as US Customs services, and locating new

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businesses on airport property.

During the past year, the EDC provided support to the Airport’s efforts to increase traffic on United Airlines flights to San Francisco. Advertisements produced by the Airport were featured in a variety of Chamber publications. Additionally, the EDC distributed several surveys which included questions designed to collect information that the Airport can use to improve marketing of the service.

Since the announcement that United Airline will cease service from Santa Maria in October, 2016, the EDC has been actively supporting the Airport in recruiting new airline service for our community.

Strategy II: Market Santa Maria to targeted industries and businesses.

Complementing our commitment to supporting the growth and sustainability of existing businesses in our community, the EDC is committed to promoting our community to potential new businesses. While we recognize that many different entities (land owners, real estate professionals, city staff, etc.) are ultimately involved in the process of securing a new business in Santa Maria, the EDC’s plays a number of key roles in the effort.

Increasing Awareness of Santa Maria among Regional Business Leaders.

The EDC is convinced that one of the best sources for new businesses in our community is our region. We are fortunate to be located between two major research universities in a region known for creating new businesses. By increasing top-of-mind awareness among business decision makers in our surrounding communities, we believe that we can position Santa Maria as a primary expansion market for growing regional businesses. As part of that strategy, the EDC continues to strengthen our relationships with partners in our region.

• EconAlliance of Northern Santa Barbara County. Made up of business leaders from northern Santa Barbara County, the EconAlliance seeks to foster education and policy discussions aimed at creating an environment for economic growth. Their programs and initiatives align well with the strategies of the EDC, but for many years the two organizations have operated independently with little to no coordination or communication. During the past year, leaders from the EconAlliance and the Economic Development Commission have been meeting to share plans and activities and to begin the process of cooperating where shared activity makes sense for both organizations. We anticipate this collaboration will continue leading both to joint initiatives, as well as identification of areas where each partner can lead out without duplicating the work of the other.

• Economic Vitality Team of Santa Barbara County. The Economic Vitality Team (EVT) was formed in 2014 with a start-up grant from the Board of Supervisors. Managed by the Santa Barbara Chamber of Commerce, the EVT is made up of Chambers of Commerce from across the County, as well as representatives from cities and key industry stakeholders. The Santa Maria Economic Development Commission became a member of the EVT in 2015, appointing Glenn Morris, Chris Slaughter, and Cameron Stephens as voting members of the organi-zation. The EVT is working on a range of issues, ranging from a regional Broadband Initiative to developing a national marketing strategy recruiting industrial and larger employer projects to the region.

• Workforce Development Board. The Workforce Development Board (WDB) is charged with developing strat-egies to promote the growth of high-value employment sectors and to assist in transitioning individuals and companies from declining career clusters to those that are growing in our market. During the past year, the program was reorganized to align with new federal mandates. As part of that restructure, a new Board was appointed. Working with the County staff, the EDC was instrumental in ensuring that a number of Santa Maria and northern SB County leaders were appointed. Board representatives from our region now include Glenn Morris (SMVCC), Kevin Walthers (Allan Hancock College, Sandra Dickerson (Your People Professionals), Adrienne Dodd (Marian Regional Medical Center), Charles Huddleston (IBEW Local 413), Steve Lavagnino (SBC Super-visor), Morgen McLaughlin (SBC Vintners Association), Gabriel Morales (CET), and Ken Ostini (Lompoc Chamber).

• Softec. With over 2,000 members, Softec creates and promotes technology-themed events for enthusiasts of all ages to connect, network, educate and learn in San Luis Obispo and north Santa Barbara County. The EDC is a sponsor and a participant in its monthly activities. Softec is focused on helping align local businesses,

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individuals and educational resources in our community to produce a thriving hub of innovation on the Central Coast. Starting in October, 2016, the EDC will be partnering with Softec to launch a Santa Maria version of Softec’s popular TechBrew series.

• Broadband Coalition. The EDC is actively involved in the Broadband Coalition of the tri-county area, including Ventura, Santa Barbara and San Luis Obispo counties. The coalition is assessing broadband coverage in the area for business services as a step toward applying for state funding to increase capacity along the Central Coast.

Targeting Santa Maria-style Businesses.

As we expand our outreach to invite businesses to expand or relocate to Santa Maria, the EDC believes it’s important to target those businesses who have the greatest potential for success in our community. The EDC regularly hosts industry roundtables with small groups of local business decision makers. These informal discussions allow us not only to identify opportunities for us to provide services to our existing businesses, but also help us in building a profile of businesses that are already successful here. Adding that local information to resources like the WDB’s industry cluster analysis and other demographic tools, we believe we are better able to target potential new businesses.

Building Awareness through Advertising.

The EDC maintains an active program of advertising both regionally and nationally. Publications in which the EDC placed ads in 2015-16 include:

• California Manufacturers, published by the California Manufacturers & Technology Association• Business Facilities guide• California Association of Economic Development Directory• Pacific Coast Business Times• SLO Tribune• Site Selection Guide’s California Investment Guide• Directory of California Manufacturers• SBC Economic Vitality Team’s Economic Profile

Strategy III: Support alignment and effectiveness of workforce development programs with

current and future employers.

The Chamber/EDC has long been involved in programs designed to connect the workforce development system to the needs of our local employers. During the past year, we have engaged in a number of new programs that further this investment.

Allan Hancock College

The EDC provides both financial and marketing support to Allan Hancock College and their career awareness/prepara-tion programs. Among the programs that received direct support during the past year were the following:

• Stem Week Of Discovery: This four-day program introduces interested graduating high school students to a variety of science, technology, engineering and mathematics (STEM) majors, and features hands-on activities related to these majors. The goal is to give students an introduction to the world of STEM while also making them aware of the services that can help them be successful college students as they prepare for careers in today’s technical work force.

• Career Exploration Day: This event exposes college and high school students to career opportunities within our community. It showcases the programs at Allan Hancock College which provide the necessary training and education students need to pursue these employment options. Last year, the event drew nearly 2,000 high school students and hundreds more from Allan Hancock College.

• Career Fair: This event allows local employers to showcase their businesses and talk about careers within their

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specific industry with AHC students. Additionally, local non-profits share the countless opportunities that are available to our AHC students for volunteer work within their own community. Universities share unique programs available on their campuses and the resources available for students while they consider where to apply and once they begin their transition to university life.

SMJUHSD Career Pathways

The EDC have been actively involved with the High School district as they prepare and launch a new career pathways centered model. The program will support local economic and workforce development efforts by creating partnerships between local industry, college, and university programs to promote the knowledge and skills necessary to transition directly from high school local employment and postsecondary education programs. Through this program, students will gain the experience, technological skills, academic fluency, strong work ethic, soft skills, and critical thinking neces-sary to complete for local high-wage, high-skills employment.

The program envisions nine career pathways that students can affiliate with to focus their preparation. The pathways will include:• Agriculture & Natural Resources• Arts, Media, & Entertainment• Business & Finance• Energy, Environment, & Utilities• Engineering & Architecture• Health Science & Medical Technology• Hospitality, Recreation, & Tourism• Information & Communications Technology• Manufacturing & Product Development

The EDC is working with the school district to connect local businesses to this program through including on-campus experiences like serving as a guest speaker, classroom mentor, or mock interviewer; work-based experiences like job shadowing, field trips, or internships; or program wide support by serving as a member of an advisory board and/or donating resources to support program and student activities.

Workforce Development Board / Youth Jobs Program

The EDC have been actively involved with the High School district as they prepare and launch a new career pathways centered model. The program will support local economic and workforce development efforts by creating partnerships between local industry, college, and university programs to promote the knowledge and skills necessary to transition directly from high school local employment and postsecondary education programs. Through this program, students will gain the experience, technological skills, academic fluency, strong work ethic, soft skills, and critical thinking neces-sary to complete for local high-wage, high-skills employment.

Additional Community Based Programs

Finally, the EDC partners with various local organizations who are offer programs that address specific workforce devel-opment needs. Examples of programs that we currently support would include sponsorship of an IBEW Apprenticeship program and workforce literacy programs facilitated by the United Way.

Strategy IV: Advocate for policies, procedures and services which result in a local economic

environment favorable to business growth and success.

Finally, the EDC believes that one of the most important things we can do is to act as the voice for local businesses in helping influence public policy in ways that ensure our community is an environment in which businesses have the maximum opportunity possible to succeed. To that end, during the past year, the EDC have partnered with our

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counterparts across the county and state to speak on legislative and regulatory issues that could have significant impacts for good or bad on business.

At the County level, we have weighed in to support specific projects and to encourage favorable policy treatments of important regional industries, including both energy production and the wine industry.

At the state level, we have joined coalitions and provided input on a wide range of bills addressing issues ranging from overtime wages in the ag industry to extending prevailing wage requirements to additional construction-related industries. We have supported proposals to increase school accountability and to rein in unneeded legal attacks related to ADA-related issues. We have opposed proposals that would increase the amount of protected and paid leave forced on small business owners, and legislation that would increase business costs by increasing costs associ-ated with additional regulatory burdens.

Locally, in addition to supporting specific businesses appearing before the Planning Commission and/or City Council, the EDC has worked closely with city officials to support the downtown specific plan revisions and securing the streetscape planning grant. We continue to work with staff on downtown related issues.

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FY 2016-17Priorities and OpportunitiesAs we look to the next year, we see both opportunities and challenges ahead for our community’s economic vitality. The EDC staff is committed to working with our Commission members, partners, and local industry leaders to address the challenges and to maximize the opportunities.

On the challenges front, we anticipate having to deal with additional layoffs as key employers continue rightsizing their operations. Additional challenges that will need to be addressed include the need to replace commercial air service at the Airport. And, in a good news/bad news way, we see continued constriction in industrial inventory.

On the positive side, there are large businesses in Santa Maria that are expanding their operations and others that are ready to begin major development projects. Add to that the energy and awareness that will come to the community as the Enos Ranch and other retail projects move forward and the next couple of years have the opportunity to be transformational for the City.

The EDC looks forward to being the lead agency working to capture that energy and leverage it to getting us the chance to share with even more prospective businesses why they should consider Santa Maria.

Attachments

1. Sample Advertisements2. Online Tools Preview3. Financial Statements4. Commercial/Industrial Real Estate Analysis

For Additional Information, please contact:

Glenn Morris, President & CEO805.925.2403 x825glenn@santamaria.com

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Appendix 1:Sample Advertisements

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Appendix 2:Online Tool Previews

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Tools for Business

Total

Chamber Total EDC Total VCB TOTAL

Income 41000 · Membership Dues & Program Fees 41100 · New Members Dues 25,213.50 0.00 0.00 25,213.50

41200 · Processing Fees 1,725.00 0.00 0.00 1,725.00

41300 · Renewing Members Dues 169,470.00 0.00 0.00 169,470.00

Total 41000 · Membership Dues & Program Fees 196,408.50 0.00 0.00 196,408.50

42000 · Program Revenues 42100 · Program Fees 61,054.00 0.00 0.00 61,054.00

42200 · Program Sponsorships 41,255.00 0.00 0.00 41,255.00

42300 · Program Contract Income 188,750.00 154,620.00 549,770.00 893,974.26

Total 42000 · Program Revenues 291,059.00 154,620.00 549,770.00 996,283.26

43000 · Contributions 43100 · Voluntary Dues Contributions 7,825.00 0.00 0.00 7,825.00

Total 43000 · Contributions 7,825.00 0.00 0.00 7,825.00

50000 · Advertising Revenues 1,380.00 0.00 0.00 1,380.00

53000 · Sales & Royalties 53100 · Non-taxable Sales 385.00 0.00 0.00 385.00

53200 · Retail Product Sales 41.57 0.00 14.24 55.92

53300 · HR Product Sales 1,834.58 0.00 0.00 1,834.58

53700 · Affinity Program Royalties 10.83 0.00 0.00 10.83

Total 53000 · Sales & Royalties 2,271.98 0.00 14.24 2,286.33

59000 · Miscellaneous Income 59100 · Interest Income 301.55 102.85 308.47 712.87

Total 59000 · Miscellaneous Income 301.55 102.85 308.47 712.87

Total Income 499,246.03 154,722.85 550,092.71 1,204,895.96

Expense

61000 · Administrative Expenses-Shared 61100 · Advertising - General 19,366.00 7,161.00 21,789.00 48,316.00

61200 · Bad Debt Expense 0.00 0.00 0.00 0.00

61300 · Bank and Finance Charges 2,009.40 532.50 1,502.67 4,044.57

61400 · Board of Directors Expenses 560.14 318.83 956.38 1,835.35

61500 · Equipment Rent & Maintenance 4,826.24 1,809.97 5,429.56 12,065.77

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Appendix 3:Financial Statements

61600 · Insurance 2,443.60 916.35 2,749.05 6,109.00

61700 · Office Supplies 4,557.31 1,835.19 5,084.28 11,476.78

61800 · Postage & Shipping 3,062.99 1,158.04 3,548.91 7,769.94

61900 · Sponsorships & Contributions 12,691.80 4,196.99 12,590.77 29,479.56

Total 61000 · Administrative Expenses-Shared 49,517.48 17,928.87 53,650.62 121,096.97

62000 · Building Expenses - Shared 62100 · Building & Grounds 2,607.11 977.52 2,931.72 6,516.35

62200 · Facility Maintenance 627.77 248.62 693.09 1,569.48

62300 · Office Rent 9,269.55 3,476.08 10,428.25 23,173.88

62400 · Property Taxes 694.00 260.26 780.75 1,735.01

62500 · Storage Rent 1,061.60 398.10 1,194.30 2,654.00

62700 · Telephone & Internet 4,910.46 2,027.52 5,338.50 12,276.48

62900 · Utilities 2,438.07 914.55 2,742.86 6,095.48

Total 62000 · Building Expenses - Shared 21,608.56 8,302.65 24,109.47 54,020.68

63000 · Personnel Expenses - Shared 63100 · Salaries & Wages 186,754.34 70,032.89 210,098.64 466,885.87

63200 · Payroll Taxes 15,826.35 5,934.92 17,804.65 39,565.92

63300 · Benefits Contributions 34,032.85 12,762.43 38,286.92 85,082.20

63400 · Retirement Contributions 2,596.00 973.50 2,920.50 6,490.00

63500 · Payroll Fees 146.29 69.05 150.41 365.75

63600 · Workers Comp Insurance 1,205.60 452.10 1,356.30 3,014.00

Total 63000 · Personnel Expenses - Shared 240,561.43 90,224.89 270,617.42 601,403.74

64000 · Professional Services - Shared 64100 · Accounting & Legal Service 2,772.00 1,039.50 3,118.50 6,930.00

64200 · HR Support Services 1,872.74 702.28 2,106.85 4,681.87

64300 · Investment Services 1,640.65 615.29 1,845.73 4,101.67

64700 · Technology Support Services 5,638.58 2,114.47 6,343.40 14,096.45

64900 · Other Contracted Services 8,446.40 3,167.40 9,502.20 21,116.00

Total 64000 · Professional Services - Shared 20,370.37 7,638.94 22,916.68 50,925.99

71000 · Operations Expenses 71100 · Committee Expenses 1,017.68 60.00 0.00 1,077.68

71200 · Contract Expenses 60,410.07 0.00 0.00 60,410.07

71400 · Member Supplies 2,058.52 0.00 0.00 2,058.52

71600 · Staff Meals 1,711.85 834.97 1,329.71 3,876.53

71700 · Staff Mileage 2,477.51 962.08 2,045.05 5,484.64

71800 · Travel Expenses 2,264.93 922.41 328.14 3,515.48

71900 · VAFB Expenses 2,500.11 0.00 0.00 2,500.11

Total 71000 · Operations Expenses 72,440.67 2,779.46 3,702.90 78,923.03

72000 · Prof. Development Expenses 72100 · Dues & Subscriptions 3,865.84 929.17 2,658.32 7,453.33

72200 · Education & Training 2,178.95 2,115.16 0.00 4,294.11

Total 72000 · Prof. Development Expenses 6,044.79 3,044.33 2,658.32 11,747.44

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73000 · Marketing & Sales Expenses 73100 · Advertising Expenses 1,384.48 15,412.80 41,509.97 58,307.25

73200 · Business Attraction Expenses 144.60 6,963.48 2,478.82 9,586.90

73300 · Marketing Collateral Expenses 0.00 0.00 19,716.04 19,716.04

73400 · Product Sales Expenses 1,697.55 0.00 0.00 1,697.55

73500 · Public Relations Expenses 3,189.02 1,283.50 28,631.81 33,104.33

73600 · Special Event Grants 0.00 0.00 67,190.00 67,190.00

73700 · Trade Show Expenses 0.00 0.00 21,654.12 21,654.12

73800 · Website & Social Media Expenses 383.09 277.97 407.94 1,069.00

Total 73000 · Marketing & Sales Expenses 6,798.74 23,937.75 181,588.70 212,325.19

81000 · Event Expenses 81100 · Advertising & Promotional 3,754.59 0.00 0.00 3,754.59

81200 · Awards & Plaques 5,917.46 64.41 0.00 5,981.87

81300 · Catering 49,798.21 0.00 647.01 50,445.22

81400 · Entertainment & Speaker Fees 3,394.75 0.00 100.00 3,494.75

81500 · Facility & Decorations 12,575.82 3,386.30 0.00 15,962.12

81700 · Miscellaneous Event Expenses 7,093.28 227.76 119.18 7,440.22

Total 81000 · Event Expenses 82,534.11 3,678.47 866.19 87,078.77

Total Expense 499,876.15 157,535.36 560,110.30 1,217,521.81 Net Income -630.12 -2,812.51 -10,017.59 -12,625.85

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Appendix 4:Commercial/Industrial Real Estate Update 2016Note: This analysis was commissioned by the Santa Maria EDC and produced by Pacifica Commercial Realty at the beginning of 2016. The information presented here is offered as a snapshot of the local market. The data was accurate to the best of our understanding at the time it was generated; details related to specific projects, properties, and values may have changed in the interim.

General Update

Commencing in January 2014, we began to see a noticeable increase in demand. Construction (both residential and commercial), which came to a screeching halt in early 2009, began to increase moderately. Projects that were halted with an unknown re-commencement date started to show signs of life. New Retail projects began to show signs of life after a prolonged dormancy (Regal Cinemas Town Center Mall, Joann’s Fabrics, WalMart Market- 2 locations, Fallas Department Store). Residential tracts that were paused during the downturn started building once again (LaVingna, Westgate Ranch, Rice Ranch-Orcutt). Though our residential market (like similar markets nationwide) was dramatically affected by illogical sales and equally illogical lending, adjustments were made and our home buying public seems to have returned, albeit at a materially lower price point. We are once again approaching a Seller ’s market with anemic interest rates making very attractive opportunities to ‘qualified’ buyers.

General Market Values: Rental rates and sales prices have increased from recent years as market trends continue to improve. Higher demand and lower supply are allowing slow but steady increases in lease rates with higher rates of appreciation for sales values. Capitalization Rates for quality investment properties in the Santa Maria Valley are hovering in the 5% to 6% range. Many tenants (across all market sectors) are renegotiating their leases with landlords in an effort to establish longer-term tenancies based upon previously suppressed lease rates.

Specific Lease Rates: Within the last 18 months, overall market values have experienced reasonable adjustments. Industrial lease transactions that peaked in the $.75nnn to $.95nnn range dropped dramatically and are now being executed in the $.50 Gross to $.75 nnn range. Retail rents once found in the $1.75nnn to $2.50nnn range are now found in the $.80 nnn to $2.50 nnn range. Office rents are by far the least affected by increased market variables and remain in the $1.00 nnn to $1.75 nnn range (with the exception of Medical Office Rents, which are generally higher due to increased parking requirements and heavy utility needs within the space).

Specific Sale Prices: Although we have seen significant increases in the sale prices of Industrial buildings, we are not nearing ‘top of the market’ (2007) prices once found in the City of Santa Maria. Some of the highest recent Industrial Sale Comparables are found in the $110 to $125 per square foot range. Most of the higher priced sales were smaller, owner-occupied buildings (3,000 sf to 10,000 sf) in the Southwest Sector. Retail building sales once recorded in the $300+ per sf range are trading in the $200 to $250 square foot range for newer properties (with several exceptions to due to specific high-demand locations). Office building sales range from +/-$125 to $200 per square foot. Industrial Land Sale comparables are generally found at $6 to $7/sf range, and Retail and Office Land Sale comparables are found in the $14 to $25 per sf range. In general, overall commercial/industrial sale prices are increasing, but remain off of their peak by +/-20%.

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Significant Market-wide Events & Developments

Area 9: The addition of approximately 900 acres of industrial land into the City of Santa Maria by annexation of parcels bordered by Betteravia, Black, and Stowell Roads (Area 9) were initially thought to be long-term industrial growth for Santa Maria. However, Windset Farm’s large scale Hydroponic Greenhouse operation acquired a significant portion of the annexed land and is operating over one million square feet of greenhouse/growing/processing facilities on Black Road.

Betteravia Plaza: Approximately 56 acres of land, which was part of the Santa Barbara Research Center/Hughes Aircraft Company was being processed for subdivision into +/-30 industrial parcels. However, lack of demand by industrial users for that location prompted a ‘rethinking’ of the property’s future. Bordered by two of the most highly traveled thoroughfares in the Southwest Sector (Betteravia & S. Blosser/Skyway Drive) this future subdivision was re-zoned through a General Plan Amendment and will be home to signficiant Retail/Commercial services, Commercial Professional Offices, and Multi-family units serving the Southwest Sector

Santa Maria Police Department: The culmination of nearly seven years of effort resulted in the occupancy of 1111 West Betteravia by the City of Santa Maria’s Police Department. In a very strategic move to meet the long-overdue facility needs of the Police Department, the City went above and beyond in the refurbishing of a 72,000 square foot former R&D building to create a state-of-the-art Law Enforcement facility that has the capability to provide Regional and Statewide Law Enforcement Training and Emergency Services.

Enos Ranch: The last sizable retail development with Highway 101 visibility in the city limits of Santa Maria is on slate to become a reality in 2016. The long-awaited Enos-Buss Site will be transformed into Enos Ranch. This +/-111 acre site bordered by S. Bradley, Betteravia, College, and Battles roads will contain Regional Retail, Auto Dealerships, and Residential uses. Regional Retail users include Costco, Lowes, Dicks Sporting Goods (& a host of smaller retailers), along with +/-13 acres of new automobile dealerships.

Federal Express Ground Transportation Facility: Construction bids have gone out for a new +/-160,000 square foot Fed Ex facility to be located in the 1500 Block of Fairway Drive. With anticipated ground-breaking in 2016, this facility will add to Santa Maria’s stable industrial employment base.

Spec Warehouse Facilities. Two new 50,000 square foot warehouse facilities immediately adjacent to the future Fed Ex site were recently built and are ready for occupancy.

Santa Maria’s agricultural employment base that continued to thrive throughout the general economic downturn still thrives. Included in the agricultural segment are numerous Wineries, Wine Processing/Storage/Bottling facilities and Processing/Cooling/Packaging operations (Lineage Logistics, Seaside Packaging, Gold Coast Packaging, Brothers Best Produce/Agro-Jal, Maxco Packaging).

Industrial Sector

Our database shows that the Santa Maria Industrial Market is comprised of approximately 8,650,000 square feet of buildings (both vacant and occupied). This total includes all existing buildings and substantially completed new construction in the M1, M2, and CM zoning areas (excluding mini-storage). A recent survey shows a total current vacancy in the Industrial Market of approximately 325,000 square feet (up/ from +/- 190,000 square feet as reported in 2013, but +/-100,000 sf represents new inventory on the market). The overall vacancy factor in our Industrial Sector now stands just below 4% percent.

Industrial Land: There are relatively few parcels of industrial land available for sale in the Santa Maria Valley. Those available are listed for sale in the $7.00 to $9.00 per square foot range. Most of the vacant parcels of land that were being processed with development plans or for build-to-suit opportunities saw little or no activity during the downturn. When our Industrial market vacancy dipped below 5%, we started to see the return of speculative construction.

Industrial Buildings: New, speculative development opportunities broke ground in 2014 in anticipation of demand for mid-year 2015. However, the total area of these projects does not exceed 150,000 square feet. Large industrial facilities vacated in recent years were leased on long-term commitments by some of Santa Maria’s most prominent private employers (Zodiac Aerospace, Windset Farms, Agro-Jal).

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Santa Maria Office Sector

The Office component of Santa Maria’s commercial real estate market is comprised of approximately 1 million square feet, both occupied and vacant.

For the purpose of tracking information, observing trends, and maintaining statistics, we have demised Santa Maria’s Office real estate market into four Sectors within the City Limits (SW Sector, SE Sector, NW Sector, & NE Sector). For the purpose of establishing geographic boundaries, the Sectors are demised by the Broadway/Highway 135 (running north & south) and Stowell Road (running east & west). For the purpose of this study, office properties owned and occupied by governmental agencies are not included in our Office Sector Base.

Vacancy Factor: It is believed that our Vacancy Factor in the Office Market (contained in all three product types) is less than 3.5%. This low vacancy factor represent a considerable advantage to existing building Owners with respect to market lease rates (“Landlord’s Market”) and potentially higher lease rates being paid by tenants (especially those with specific criteria/amenities in their Site Searches. 2013 through 2015 saw significant movement in Santa Maria’s Office Sector. With the leasing of 2050 South Blosser (32,000 sf) and 302 West Carmen Lane (12,000 sf) the largest vacant office properties are now occupied by long-term tenancies. Furthermore, the medical office spaces within the 116 S. Palisades Building (‘Marian Hancock Building’) have been leased, and that project is enjoying 100% occupancy.

Vacant land that can be used for the construction of new Office product is also substantially below what is considered typical for most markets. There is one remaining lot at McCoy-Depot project with the most recent construction of a new 7,200 square foot ‘spec’ office building. The Santa Maria Wisdom Center project will soon break ground as part of the McCoy-Depot project. There are few ready-to-build parcels of land suitable for the construction of new Office Projects at this time.

Office Space/Product Types: There are two general types of Office Space within the City of Santa Maria: General/Professional Office Space, and Medical Office Space. Demand and values for each vary greatly based upon location, age, and tenancies.

General/Professional Office - The majority of Santa Maria’s Office Market could be described at either General Office Space or Professional Office Space. The ‘Use’ of the building is the determining factor between ‘Professional Office’ or ‘General Office’. In many cases, there is a subjective line between the two categories of office space users, and some multi-tenant properties contain both General and Professional Office users. Professional Office uses include: Accountants/CPAs, Lawyers, Architects, Engineers, Escrow & Title Offices, Real Estate Brokerages, Appraisers, Financial Advisors, and Insurance Agents. General Office uses include Corporate Offices, Non-Profit Agencies, Consultants, Service Providers, and Government Offices.

Santa Maria’s Office Market consists of buildings that have been built using a wide range of construction methods. General Office space and Professional Office buildings are found throughout the City on both major arterials and secondary streets. Buildings in Santa Maria’s General/Professional Office categories include a wide range of variables, including:

• Older construction, refurbished to current Building Codes • Converted/Up-zoned structures (commercial, industrial, and/or residential) • Single-story/Multi-story; Elevator served; ADA Compliant; current Building Code • Varied Parking Ratios

Office Space/Buildings are dispersed throughout the City. Because the north end of the City Limits tends to be older residential units & commercial space, most of Santa Maria’s General and/or Professional Office Space is found along the Main Street corridor south to the Community of Orcutt. Santa Maria’s Office Base consists of newer & older structures, single-tenant & multi-tenant buildings, and single story or multi-story structures. Similar to Medical Office Buildings (“MOBs”), building trends and the general age of Office Space/Buildings often determines the type of construction used when they were built. Most of the older structures are made of wood/stucco, while the newer structures are made of either concrete tilt-up panels or steel frame/stucco. The City of Santa Maria requires General and Professional Office Space/Buildings to meet a Parking Ratio of 4 parking spaces/1000 square feet of building area. General/Professional Office Space is generally found in the CPO (Commercial Professional Office) Zoning, C2 (Commercial/Retail) Zoning, or PF (Public Facilities) Zoning.

Medical Office Buildings (“MOBs”) - A significant majority of the Medical Office Space is within close proximity to Dignity Hospital. However, there are multiple medical ‘submarkets’ in the City wherein medical office uses and MOBs are clustered. Santa Maria MOBs are constructed from various building materials (often determined by age/trends) and in a wide range of

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sizes. City Zoning Ordinance requires MOBs to meet a Parking Ratio of 6 spaces/1000 sf of building area. Within the City of Santa Maria, there are several geographic areas where a higher concentration of MOBs are found, including:

• Dignity Hospital Area (includes Palisade Drive, Cypress, & Stratford) • Broadway Corridor (and one-block side streets both north and south) • Main Street Corridor (both east and west) • East Stowell Road • Betteravia Road (east and west)/W. McCoy Lane

Commentary

The Commercial/Industrial Real Estate market of the Santa Maria Valley remains stable. Demand for existing facilities has been steady throughout the last twelve months with a mixture of prospects looking for facilities to lease or buy. Our strong employment base of local and regional employers in both medium technology and agricultural sectors remains our City’s greatest asset.

Most of the vacancy factor throughout the market can be found in larger freestanding buildings in the range of 25,000 to 50,000 square feet. Most multi-tenant industrial parks with smaller unit sizes (less than 1,500 square feet) have experienced increasing demand from smaller firms looking to either start up in Santa Maria or expand from other regional locations. Similarly, demand for medium sized units (3,000 to 6,000 sf) has increased over the prior 12 months.

As discussed in prior Industrial Market Profiles, the Santa Maria Industrial Market is segmented into four main Areas:

Area Major Streets Southwest Skyway/Betteravia Northwest Blosser/W. Stowell/Main East E. Stowell/E. Boone North Roemer/Preisker/Carlotti

Southwest Area – The Southwest area recognized several significant events during the 2013 through 2015 time period. Company expansions coupled with construction of new facilities has increased the overall base and the vacancy factor as well. The current vacancy factor in the Southwest area (including completion of the buildings under construction) represents approximately 2.3% (or approximately 200,000 square feet). One half of the SW Sector vacancy is attributed to two brand new, state of the art, High Bay Distribution buildings (totaling 100,000 square feet); The 58,000 square foot facility at Skyway/Betteravia (formerally occupied by UPS Teleservices was purchased, remodeled, and occupied by Rabobank in January 2015. This facility now serves at the permament home to Rabobank’s Regional Banking Center; Several Wine and Agricul-tual companies expanded their related companies in the SW Sector, and Zodiac Aerospace leased an additonal 157,000 square feet (two former Den Mat facilities on Skyway Drive) during the 2013 through 2014 time period. Federal Express will break ground on a new +/-160,000 square foot build to suit on Fairway Drive; and Hayward Lumber is under construction with an additional +/-20,000 square foot warehouse building materials on West McCoy Lane. The North County Jail Facility is scheduled to break ground in 2016. This 500 bed, state of the art Detention Facility will create even more stable jobs to the Santa Maria Valley and further drive demand for services and housing in the Southwest Sector.

Northwest Area – This submarket is the second largest in the City. Current Vacancy in the Northwest Area stands at close to zero. Several events occurring in the Sector are noteworthy. Bonita Packing, Cal-Giant, Driscoll Strawberries, Gold Coast Packing and Linneage Logistics have built and occupied large processing and cooling facilites near the westernmost City Limits. Three separate industrial buildings of +/-10,000 square feet each in the NW sector were sold within +/-6 months of each other (Western Avenue/Morrison). The former Sears Warehouse (36,000 square feet) was leased to On-Trac (an overnight package delivery service).

East Area – The most significant property in this Sector is represented by the Columbia Business Center. There remains minimal availability in the +/-157,000 sf CBC complex of less than 10,000 square feet. A portion of the CBC was sold to Shepard Eye Center in 2014 and converted into an Optimology Facility. North Area –The combined Gateway Business Park and Gateway Plaza projects remain at approximately 90% occupancy. Those projects along with several trucking, equipment, and food related companies currently make up the bulk of the North

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Sector. Three new projects to be built (with construction to start 4th quarter 2016 or early 2017) will absorb the +/-4.5 vacant acres south of Gateway Plaza. The North Area was further boosted by the addition of two new Hotels at N. Broadway and Preisker Land. The North Area inventory is approximately 560,000 square feet with +/-27,000 square feet vacant resulting in a vacancy factor of 4.8%.

Summary Commentary

The supply of finished, industrial zoned land has essentially been depleted. Most all of the parcels which were 1 to 5 acres have been sold. The Santa Maria Public Airport District has commenced with the marketing of their industrial parcels south of the Airport.

Investor interest in the Santa Maria market is steady and growing. Unfortunately, quality leased investments are few.

Demand for Retail services continues to be a very strong component of Santa Maria’s economy.

We believe that Central Coast of California will continue to outpace the rest of the nation. Quality of life remains one of the strongest factors affecting demand. Affordability of housing, labor, and pro-business/development climate will retain Santa Maria’s position as an economic leader in Santa Barbara County.

Summary of Property ValuesSales and Lease values are summarized as follows (all values are expected to remain in these ranges through 2016 but will likely rise as vacancies are absorbed):

Industrial

Projected Building Sales: High-end space over 50,000 square feet $90.00-$120.00/sf High-end space 20,000 to 50,000 square feet $100.00-$125.00/sf High-end space under 20,000 square feet $110.00-$135.00/sf Lower-end space $75.00-$95.00/sf

Projected Lease Rates: High-end space over 50,000 square feet $0.60-$0.75/sf NNN High-end space 20,000 to 50,000 square feet $0.65-$0.80/sf NNN High-end space under 20,000 square feet $0.50-$0.70/sf NNN* Lower-end space $0.50-$0.60/sf Gross *or lower due to higher percentage of older buildings

Projected Land Value: $6.00-$8.00 per square foot

Retail/Office (excludes leased investments & MOBs)

Projected Building Sales: High-end space 20,000 to 50,000 square feet $180 - $200/sf High-end space under 20,000 square feet $190 - $225/sf Lower-end space $100 - $125/sf

Projected Lease Rates: High-end space 20,000 to 50,000 square feet $0.75-$1.50/sf NNN High-end space under 20,000 square feet $1.50-$2.50/sf NNN Lower-end space $0.80-$1.25/sf NNN

Projected Land Value: $14.00-$25.00 per square foot

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