welcome [] · 5/27/2020 · welcome. sacramento county . champions training program: economic...
TRANSCRIPT
WELCOMES a c r a m e n t o C o u n t y
C h a m p i o n s T r a i n i n g P r o g r a m :
E c o n o m i c C r i s i s a n d R e c o v e r y S p e c i a l E d i t i o nM a y 2 7 , 2 0 2 0
TODAY’S PROGRAM
1 p.m. Housekeeping Remarks
1:05 p.m. Welcome
1:10 p.m. The Practice, Process and Pillars of Economic Development
1:40 p.m. How to be a Champion Amidst an Economic Crisis
2:25 p.m. Sacramento International Airport Discussion
2:45 p.m. Panel
3:25 p.m. Final Thoughts and Closing
WELCOME
Supervisor, District 1 Sacramento County
Phil Serna
PRACTICES, PROCESSES AND PILLARS OF ECONOMIC DEVELOPMENT
Danielle Casey
Executive Vice PresidentGreater Sacramento Economic Council
PRACTICES, PROCESSES AND PILLARS OF ECONOMIC DEVELOPMENT
GSEC as a best practice regional economic development leader and disruptor
OUR PUBLIC/PRIVATE PARTNERSHIP
BOARD REPRESENTATION
70%
20 Cities/Counties
43 CEOS30%
BOARD INVESTMENT
79%
PUBLIC
PRIVATE21%
Primary functions are to:• Retain business
• Attract business
• Grow business
• Create jobs
• Grow investments
• Develop industries
The Greater Sacramento Economic Council is the catalyst for innovative growth strategies in the Capital Region
DavisWest Sacramento
WoodlandSacramento
Elk Grove
Roseville
Yuba City
LoomisRocklin
Galt
Folsom
Lincoln
Rancho Cordova
Citrus Heights
Competitiveness Council:Advises Board on strategic direction
Industry Councils:Helping to develop approaches for target industry growth – these include the Food and Agriculture Council, Business Development Advancement Council, and upcoming new Industry Consortiums to be announced soon
Champions Program: A manner for education and engagement of the general public and stakeholders, as well as to offer higher level connectivity for Certified Champion investors
Economic Development Directors Taskforce: Monthly connectivity with all community directors and support through research, marketing/public relations and business development services
PARTNERS DRIVE ORGANIZATIONAL SUCCESS
INTERNAL ORGANIZATIONAL PILLARS
8
ResearchIdentifying economic trends, tracking and analyzing critical statistics and building a value proposition
02EngagementBoard of Directors, councils, Champions, Economic Development Directors Taskforce and community programs
01
Business developmentLead generation, prospect handling, project management, deal closing and job creation
04Marketing and PRTelling our story on a local, regional and national platform for brand awareness and economic development
03
ECONOMIC DEVELOPMENT BUILDING BLOCKS
5. Business retention and expansion
4. Prospect identification, development and location
3. Brand development and marketing
2. Create data-driven value proposition
1. Identify strengths and weaknesses through research
1. IDENTIFYING STRENGTHS AND WEAKNESSES
THE BROOKINGS MARKET ASSESSMENT
Compared to the 100 largest U.S. metros, the Sacramento MSA lags in job growth, output per job and median wage growth over the past decade (2006-2016)
Sacramento MSA rankings
67thGrowth
71st
Prosperity
84thInclusion
Widespread poverty is the result of a decade’s worth of poor economic performance.
of the Sacramento region’s residents live in a struggling family, including 1/3
Source: Brookings, “Metro Monitor,” 2018; Brookings analysis of the University of Washington Center for Women’s Welfare County-Based Sufficiency Standard
42%47%of blackresidents
of Hispanicresidents
REGIONAL ECONOMIC CHALLENGES
– Sacramento Bee
“Sacramento recently finished dead last for business friendliness in a survey of small businesses of 82 major cities. The survey, by Thumbtack.com, hit the River City with a report card of mostly Fs in areas like tax code, regulations and ease of starting a business.
… Hayes also noted that Sacramento’s best grade – a C in “ease of hiring” – was perhaps the most relevant on the scorecard and shows the region’s abundance of professional talent, a primary factor for site-seeking big businesses. ”
Source: EMSI, ECONOMY OVERVIEW
0%
5%
10%
15%
20%
25%
30%Share of government jobs
LOW RELATIVE GROWTH RATE IN TRADABLE SECTOR JOBS
1.60%1.40%
0.70%0.50%
0.30% 0.30%
-0.10%
-0.50%-0.70%
San Antonio Orlando Columbus Cleveland Pittsburgh Riverside Cincinnati St Louis GreaterSacramento
Annual employment growth rate in tradable sectors (2006-2016)
Source: Brookings, “Metro Monitor,” 2018; Brookings analysis of the University of Washington Center for Women’s Welfare County-Based Sufficiency Standard
2. CREATE A DATA-DRIVEN VALUE PROPOSITION
FAST FACTS ABOUT GREATER SACRAMENTO
#1 fastest growing large community in California(California Department of Finance 2018)
$6 billionin urban core development since 2016(Downtown Sacramento Partnership 2019)
#1 in women founded businesses in the nation(Center for American Entrepreneurship Analysis of Pitchbook Data, 2017)
#6 in small tech markets in North America(2019 CBRE Tech Talent Report))
#3 city in the U.S. for most net millennial in migration (Smart Asset 2018)
9.5%annual growth rate in population with tech degrees (Commercial Café 2019)
#1 MEGAREGION MIGRATION DESTINATION
29,091people move from the Bay Area to
Greater Sacramento each year
That’s more than:Denver (3,156)
Austin (3,017)
and Seattle (7,683)
Combined
Source: US Census Bureau County to County Migration 2013-2017, https://data.census.gov/cedsci/
MEDIAN AGE IN GREATER SACRAMENTO DECREASING
GREATER SACRAMENTO SAN FRANCISCO
PORTLAND SEATTLE
36.8 38.8
37.8 37.1
Median Age
21%MILLENNIALS
2,547,2212019 POPULATION
47.9%RACIALLY DIVERSE
6.20%
19.40%20.87%
19.19% 18.60%
15.74%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Less than 5 5 to 19 20 to 34 35 to 49 50 to 64 65+
Greater Sacramento Population by Age
Source: EMSI 2019.4 Regional Overview
COMPETITIVE COST OF LIVINGGreater Sacramento is more affordable than Chicago, Boston, and the Bay Area.
Source: C2ER Cost of Living Index 2019.3
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
50
100
150
200
250
Austin Atlanta Sacramento Chicago Boston San Francisco
Cost of Living Across Comparison MSA’s
Cost of Living Index Percent More Expensive than Sacramento
GREATER SACRAMENTO OFFERS COST OF LIVING ADVANTAGES TO COMPETING MARKETSConsidering cost of living, Greater Sacramento is more affordable than Denver, Portland, Seattle and the Bay Area.
Source: Redfin October 2019,Zillow October 2019, Sacramento Bee
Housing Cost Comparison Lower Median Millennial Neighborhood Rental Prices
Prop 13: CA’s property tax is capped at 1%.
Sacramento builds more homes than any California city north of LA.
MSA Median Home Price
Phoenix, AZ $282,000Austin, TX $320,000Sacramento, CA $419,000Denver, CO $420,000Seattle, WA $625,000Los Angeles, CA $630,000San Jose, CA $1,185,000San Francisco, CA $1,375,000
$1,441
$1,797 $1,858 $1,877
$2,206 $2,210 $2,260
$-
$500
$1,000
$1,500
$2,000
$2,500
Phoenix Austin Sacramento Denver Portland Seattle Los Angeles
Median Rental Price
HIGHLY COMPETITIVE TALENT PIPELINE
384,660Currently enrolled 4-year university students within 100 miles
Source: National Center for Education Statistics, College Navigator
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
Greater Sacramento Seattle Austin Denver Portland
Comparison Market Talent Access
Greater Sacramento Seattle Austin Denver Portland
HOW WE STACK UP: SOFTWARE
The annual cost of operations for a software company with 500 jobs in comparison to other regions
Source: Applied Economics MetroComp 2018
METRO AREA EMPLOYEE PAYROLL BENEFITS BUILDING LEASE
PAYMENTSPROPERTY TAX
TOTAL OPERATING COST
COST DIFFERENCE
Sacramento $49,231,440 $11,801,621 $3,612,000 $28,450 $64,673,511 -
Austin $48,194,950 $11,418,396 $5,039,000 $55,350 $64,707,696 $34,185
Denver $49,939,470 $11,812,912 $3,618,000 $55,916 $65,426,298 $752,787
San Diego $51,433,250 $12,324,110 $3,516,000 $28,400 $67,301,760 $2,628,249
Los Angeles $52,623,490 $12,606,554 $4,020,000 $29,175 $69,279,219 $4,605,708
Seattle $54,597,410 $13,030,484 $4,650,000 $25,951 $72,303,845 $7,630,334
SACRAMENTO INTERNATIONAL AIRPORT
Source: Google Maps, Departure at 11:30AM on 7/13/2016; Press Release, “Sac Intl Airport Posts 4 Years of Passenger Growth; Has Record-Breaking Jan-Feb-March,” (2018); Federal Aviation Administration, 2015; FAA, Final CY 2019 Passenger Boarding Data, 2018, Whatsnewstoday
Only 10 minutes from downtown
Named Best Airport of its size in the US by J.D. Power and Associates in 2017
Ranked 11 of 31 midsize US airports for enplanements
5th best airport of the 50 busiest in the U.S.
179NONSTOP FLIGHTS
40 NONSTOP NATIONAL
DESTINATIONS
04 NONSTOP INTERNATIONAL DESTINATIONS
Nonstop Flights from SMF17 Daily Nonstop Flights to Seattle
16 Daily Nonstop Flights to Los Angeles
10 Daily Nonstop Flights to Phoenix
6 Daily Nonstop Flights to Denver
5 Daily Nonstop Flights to Salt Lake City
4 Daily Nonstop Flights to Chicago
4 Daily Nonstop Flights to Las Vegas
4 Daily Nonstop Flights to Portland
1 Daily Nonstop Flight to Austin
#2 Ranked state forFortune 500 HQs
$3.9B#2 Average profit
Fortune 500 Companies
411% more than
Arizona
374% more than
Colorado
22% more than Washington
76% more than Oregon
116% more than Texas
56% more than New York49
Source: Fortune 500, 2018 List
A PROFITABLE STATE FOR BUSINESS
WITH A CAPITAL NETWORK THAT IS EXPANDING
Target Area: Technology, media, telecommunications, financial services, manufacturing and
distribution industries
Target Area: Healthcare, and internet/consumer application sectors
Source: AGR Partners, DCA Partners Moneta Ventures, Sacramento Business Journal, The March Fund, Pitchbook 2019
Target Area: Food and Agribusiness companiesTarget Area:
Biotechnology, machine intelligence and sustainable
nutrition solutions
Target Area: Civic tech, cybersecurity, fintech, big data,
telecom and media sectors
Over $800 millionin venture capital funds
AND INCREASED INVESTMENT IN REGIONAL FIRMS
57% increase in the number of investment deals for companies in the Greater Sacramento region since 2015.
Since 2014, 472 additional investors invested in companies in the region, a 50% increase.
The amount of capital invested is now over $24 billion, which grew by 50% in the last 5 years.
There are now 670 exits in the region, which is an additional 219 companies, growing by 48% since 2014.
3. BRAND DEVELOPMENT, MARKETING AND PUBLIC RELATIONS
THE STORY BEING TOLD BY OTHERS
POSITIONING FOR IMPACT ON ALL LEVELS
Global National Megaregional Regional
Foreign Direct Investment (FDI) direct outreach and marketing campaigns emphasize the value of locating to California’s vibrant economic ecosystem.
#CaliforniaOption
Country-wide sales trips, presence at events, PR campaigns and marketing activations ensure consistent visibility on the national stage.
#CaliforniaOption
The megaregion proposition emphasizes shared value proposition with the Bay Area.
#CaliforniaJobsMatter
Building and communicating our regional value proposition and core assets ensures a consistent strategy and message on the ground.
#WeAreGreaterSac
Business Xpansion Journal
An ad alongside a featured editorial was seen in the November 2019 issue, reaching 10,000 readers in print and 65,000 digitally.
Major League Soccer is Official for SacramentoMedia coverage garnered 7,254 views, 1,945 engagements and 32,393 impressions
Site Selector Familiarization TourOne significant new prospect requirements already received as a result
Media coverage garnered 1,671 video views, 559 engagements and 17,992 impressions
NATIONAL CONSULTANT OUTREACH
RECOVERY MESSAGING CAMPAIGN
• Leveraging of IEDC Economic Development Week to promote positive messaging underscoring the work of economic development orgs
• Launch of comprehensive marketing strategy to promote recovery and maintain brand visibility
• Launch of pivoted regional business retention and attraction strategy with focus on life sciences, fintech, workforce development and talent retention and attraction
MEDIA AND PR IMPACTS SINCE MARCH 13
9 millionbroadcast media reach (Aug. – Oct. <50k)
32%Release open rates(double industry average)
141 millionNews potential reach (Aug. – Oct. 30 m)
$1.4 millionAd value estimate(Aug. – Oct. $285k)
4. LEAD AND PROSPECT DEVELOPMENT
PRIMARY CLIENT LOCATION SERVICESGreater Sacramento works directly with companies evaluating the region to provide turnkey solutions to their needs.
PROVIDE ACCESS TO TALENT
CREATE CAPACITY IDENTIFY NEEDS AND OPTIONS
o Provide access to talent
o Partnerships with universities for workforce delivery programs
o Identify base of qualified graduates/experienced workers
o Real estate, site, talent and timing needs
o Provide list of options that meet requirements
o Lead custom tours of shortlisted communities
o Real estate, site, talent and timing needs
o Provide list of options that meet requirements
o Lead custom tours of shortlisted communities
TOP FACTORS FOR SITE SELECTION (2018)
Rankings Factor Very important/important %
1 Availability of skilled labor 100
T1 Proximity to major markets 100
T1 Highway accessibility 100
4 Labor costs 98.1
5 State and local incentives 98.0
6 Available land 96.1
6T Available buildings 96.1
6T Training programs/technical schools 96.1
6T Energy availability and costs 96.1
6T Proximity to suppliers 96.1
Source: Area Development Magazine, 2018
THE REQUEST FOR INFORMATION PROCESS
Requirement Received • Site requirements
• Decision making criteria
Value proposition
development
• Site requests from regional communities
• Incentive offerings compiled
• Unique value proposition developed
Final proposal
submitted and
monitored
• Site tours hosted• Facilitated meetings held• Follow up and additional
information
BUSINESS DEVELOPMENT AND NEW MARKET PENETRATION
Bay Area / San Jose: 100
6 visits and two eventsLos Angeles / Orange County: 1007 visits and two events
Additional Domestic Markets:• Dallas• Austin• Washington, D.C.• San Diego• Chicago
• 250 Target List• Consulates• 800+ broker contacts, 30+
multipliers• 60+ individual meetings
Seattle: 503 visits
and one event
International Markets:• Germany (Hanover)• United Kingdom (tentative)
• Top 100 list• 10+ FDI targets• 20+ national site selection
consultants• Targeted development
industry firms
• Top 100 list development• 20+ existing relationships
BROKER MOU’S AND TOOLKIT DELIVERY
Now have SEVEN Memorandums of Understanding executed with brokerage partners
Critical partnerships for generating market interest and aligning messaging
5. BUSINESS RETENTION AND EXPANSION
INITIAL BUSINESS SURVEY RESULTS
• Strong mix of respondent companies: 12% healthcare; 24% service; 13% professional, technical and scientific; 8% retail; 3.3% construction; 3% wholesale; 4% real estate and 4% educational
• 88% have seen a revenue decrease, half of which have seen a 90% or more loss; 9.6% have had no change
• Employee loss has occurred for 46% of respondents; a near even split between layoffs and furloughs
• Average response for survival before shutdown timeline was 11.2 weeks
• 48% had applied for EIDL loans, and 59% at the time of response were pending, 14% successful and 27% unsuccessful
• 58% had applied for PPP, and at the time of response 28% had been successful
• Consistently, when asked what was needed, most common answer was allowing businesses to reopen safely as soon as possible; next, it was PPE, tax breaks, and other financial support
517 responses over 3-week period, distributed through newsletter, website, via partners and directly to industry firms
LAUNCH OF NEW SUPPORT TOOLS: SIZEUP
In first week was the 4th
most visited page on our site since November
In THE last month, ranks as the third most visited page overall
ECONOMIC UPDATE COVID-19 IMPACTS
Source: Wall Street Journal
GDP Growth RatesQ2 2020 GDP growth rate forecasts are in the range of -25% to -40%
-25%: Wells Fargo-30%: Beacon Economics, & New York Federal Reserve Bank-38%: Congressional Budget Office -39%: Goldman Sachs-40%: JP Morgan
Labor Markets U.S. Labor Department has reported that 2.4 million Americans filed for unemployment claims in the week ending May 16. The total number of Americans who have filed for unemployment benefits in the past nine weeks is now 38.9 million.
The Sacramento MSA unemployment rate is 14.2%, Sacramento County at 14.7%.
ECONOMIC UPDATE COVID-19 IMPACTS
Recovery• U.S. Federal Reserve Chairman Jerome Powell has
indicated that it might take over a year for the U.S. economy to recover from the aftermath of COVID-19 and expects unemployment to rise through June.
Businesses Reporting Growth• U.S. tech companies Facebook, Apple, Amazon, and
Microsoft have made $7.5 billion worth of deals in the first six weeks of Q2 2020 (Source: Pitchbook).
• Walmart has reported that its quarterly sales increased by 10% with e-commerce sales going up by 74% as consumers have switched to online ordering and home delivery.
Optimism Level Type of Recovery
Most Optimistic Z-Shaped
Still Very Optimistic V-Shaped
Somewhat Pessimistic U-Shaped
Very Pessimistic Nike-Swoosh
Still Very Pessimistic W-shaped
Most Pessimistic L-Shaped
Source: Brookings Institute
Q & A
Danielle Casey
Executive Vice PresidentGreater Sacramento Economic Council
HOW TO BE A CHAMPION AMIDST AN ECONOMIC CRISIS
Barry Broome
President & CEOGreater Sacramento Economic Council
HOW TO BE A CHAMPION AMIDST AN ECONOMIC CRISIS
WHY THE GSEC ORGANIZATION WAS BUILT
In the 2008 economic crisis, Greater Sacramento was the hardest hit regional economy in the western half of the U.S.
The region was:• 40% dependent on government jobs• 2nd highest in young adult unemployment
rate in the nation• Ranked 91st in inclusion out of the 100
largest metros according to the Brookings Institute.
“Sacramento recently finished dead last for business friendliness in a survey of small businesses of 82 major cities. The survey, by Thumbtack.com, hit the River City with a report card of mostly Fs in areas like tax code, regulations and ease of starting a business.
… Hayes also noted that Sacramento’s best grade – a C in “ease of hiring” – was perhaps the most relevant on the scorecard and shows the region’s abundance of professional talent, a primary factor for site-seeking big businesses. ”
5-YEAR IMPACTS TO SACRAMENTO COUNTY
$42:1 Return on Investment on Direct Local Tax Revenue
$3,906:1 Return on Investment on Economic Output
Since GSEC’s inception in 2015, it has delivered the following impacts to Sacramento County:
$1,134,190Total investment over 5 years
$47,047,8335-year local tax revenue
FY 19/20 ADDITIONAL AND CUSTOM SUPPORT SERVICES DELIVERED
• Four specific research requests delivered to Sacramento County estimated at 14 hours total staff time
• July 2019 episode of "The Download" Featuring Phil Serna - 687 views, 18,596 impressions and 355 engagements
• Aggie Square support, partnership and developer event featuring Wexford with 130+ CoreNet Global attendees
• Service on Advisory Board for California Mobility Center and staff partnership for marketing and facility launch
DUPLICATION COST OF DATA SOURCES AND SERVICES AVAILABLE TO SACRAMENTO COUNTY VIA GSEC
MARKETING & WEB PRESENCE, VIDEO PRODUCTION AND PAID AND EARNED SOCIAL MEDIA
Hosting and maintaining an economic impact model, tourism impact model and a metro comparison model allows GSEC to produce impact reports for all projects and analyze return on investment for local incentives.
ESRI Business Analytics and Big Data available through GreaterSacramentoSites.com along with property listing tools and custom community demographics, business data and infographics. GSEC also holds licenses to CoStar, allowing access to all marketed listings and analytics.
Estimated replacement cost of data services including subscription and hosting costs as well as associated staff management time: $250,000 + annually
GIS BASED BUSINESS DATA TOOLS, STORY MAPS AND COMMERCIAL REAL ESTATE LISTINGS
Website hosting and maintenance cost to provide a trackable, regional promotional tool with integrated data sets and sources, along with social media management and tools.
GRANULAR LABOR DATA ANALYSIS AND CUSTOM LOCAL DEMOGRAPHICS
Using EMSI, GSEC can analyze labor, job posting, demographic, industry and occupational trends to the 6-digit NAICS code level. Cost of living C2ER database provides cost comparisons to articulate value proposition to prospects. The recently launched SizeUp small business tool supports local small business and is free to all.
LEAD GENERATION AND PROSPECTING TOOLS FOR NEW OPPORTUNITIES
GSEC, on behalf of the region, subscribes to Pitchbook and other data sets such as external market lists, Hoovers D&B, Fortune 500 and Inc. 5000 for lead generation purposes for the region.
ECONOMIC IMPACT ANALYSIS AND METRO COMPARISON MODEL
TOTAL IMPACT DELIVERY SINCE GSEC’S INCEPTION
The following statistics are the total economic impact to the region and California since 2015:
Average wage: $61,762
Direct economic impact: $3.58 billion
Total local tax revenue: $76.5 million
Total jobs: 14,787
Total jobs added to California: 15,637
Total economic impact to California:
$7.05 billion
Total tax revenue to California:
$129 million
DEMOGRAPHICS AND INTENTIONAL STRATEGIES DRIVE A MODERN ECONOMY
California is frequently ranked last in the U.S. for business climate due to high taxes and complex regulations.
To succeed in a modern economy we must:• Build a university-led model
• UC Davis as a research institute• Sacramento State as an applied institute • Los Rios Community College as a training
institute• Optimize the region’s innovation ecosystem • Improve the region’s retention of college
graduates• Promote equity
27%
27%
28%
28%
29%
29%
30%
30%
31%
31%
32%
2015-2016 2016-2017 2017-2018
Percent of UC Davis graduates that stay in Greater Sacramento
BEST AND WORST METROS FOR GRAD RETENTION
Four-year institution college grad retention rates
Best Large Metros Retention Rate
New York-Northern New Jersey-Long Island, NY-NJ-PA 71.1%Riverside-San Bernardino-Ontario, CA 70.6%
Detroit-Warren-Livonia, MI 70.2%
Houston-Sugar Land-Baytown, TX 66.1%
San Jose-Sunnyvale-Santa Clara, CA 65.2%
Seattle-Tacoma-Bellevue, WA 64.6%
Atlanta-Sandy Springs-Marietta, GA 64.2%
Dallas-Fort Worth-Arlington, TX 63.7%
Louisville-Jefferson County, KY-IN 63.0%
Los Angeles-Long Beach-Santa Ana, CA 62.9%
Worst Large Metros Retention RatePhoenix-Mesa-Glendale, AZ 18.0%
Hartford-West Hartford-East Hartford, CT 26.4%
Virginia Beach-Norfolk-Newport News, VA-NC 31.6%
Providence-Fall River-Warwick, RI-MA 31.9%New Orleans-Metairie-Kenner, LA 33.3%Rochester, NY 34.0%Buffalo-Niagara Falls, NY 35.8%
Sacramento-Arden-Arcade-Roseville, CA 37.3%
Austin-Round Rock-San Marcos, TX 38.4%Oklahoma City, OK 39.3%
Source: Citylab; includes aggregate graduate data
WHERE YOUR ECONOMY COMES FROM
Where Sacramento County Workers Live (2017)
Share
Sacramento County, CA 60.79%Placer County, CA 7.48%Yolo County, CA 3.91%
El Dorado County, CA 3.10%San Joaquin County, CA 2.83%
Solano County, CA 1.97%Contra Costa County, CA 1.96%
Alameda County, CA 1.94%Santa Clara County, CA 1.56%
• 40% of Sacramento County’s workforce comes from outside the County
• Other counties in the region such as Placer, Yolo and El Dorado contribute significantly to the workforce
ADOPTING TARGET INDUSTRY CLUSTERS AND STRATEGIES
$44 Million for Green City
Future Mobility Agricultural Technology Health & Life Sciences
TECH TALENT IS LEADING GLOBAL INNOVATION
The high-tech industry has accounted for about 20% of major office-leasing activity in the U.S. since 2018 – the most of any industry.
The number of tech talent workers has increased by 16% in the past five years, adding 693,000 jobs to the U.S. economy at a pace more than twice the national average.
The 5.2 million tech talent workers in the U.S. account for 3.7% of total workers.
Tech talent job growth has a multiplier effect that positively impacts economic growth.
Source: 2019 CBRE US Tech Talent Report, Cyberstates 2018
At $1.6 trillion, the tech sector is one of the largest components of the nation's economy.
GREATER SACRAMENTO LIFE SCIENCES COMPANIESUniversity-led research parks allow for services and innovative partnerships that reach companies and communities across the region.
City of RocklinBusinesses : 25Employees: 172Ex: Cell Marque Corporation
City of Elk GroveBusiness: 36Employees: 49Ex: Diagnostic Radiological Imaging
City of RosevilleBusinesses : 50Employees: 462Ex: PASCO Scientific
City of GaltBusiness: 3Employees: 23Ex: Moore Biological Consultants
City of FolsomBusiness: 38Employees: 142Ex: InVision 3D-4D Ultrasound
City of Yuba CityBusinesses: 21Employees: 92Ex: West Coast Pathology Laboratories
City of WoodlandBusiness: 35Employees: 228Ex: JR Scientific
City of Rancho CordovaBusiness: 37 Employees: 389Ex: Ampac Fine Chemicals
City of SacramentoBusiness: 260Employees: 847Ex: Immuno Concepts
City of West SacramentoBusiness: 28Employees: 322Ex: Idexx Reference Laboratories, Inc.
City of DavisBusiness: 101Employees: 767Ex: Evolve Biosystems
City of LincolnBusinesses : 5Employees: 30Ex. Quest Diagnostics Incorporated
Town of LoomisBusinesses : 5Employees: 20Ex. Command Sourcing
Aggie Square
City of Citrus HeightsBusiness: 16Employees: 30Ex: Derm Defense, LLC
Source — Number of businesses: DB Hoovers, Job Count: EMSI
UC DAVIS AGGIE SQUARE OVERVIEW
About Aggie SquareA UC Davis technology and innovation park that will house 2 million square feet of life science-anchored commercial lab space. • $1 billion investment 2020• Technology focus:
• Cell and Gene Therapy • Genomics • Imaging Modalities
• 10,000 direct and 27,000 induced jobs
Source: UC Davis Aggie Square 2019
About WexfordWexford Science & Technology and GMH Capital Partners were selected as the official developers of phase one of Aggie Square. • University of Maryland BioPark
• 350,000+ square feet of sophisticated lab and office space and housing for early bioscience companies
• Cortex Innovation Community, St. Louis, Missouri
• Over 500,000 square feet of lab and office space and home to a regional Microsoft HQ
Current Status • IMB and Alice Waters Institute
for Edible Education are announced anchor tenants
• 28 companies with intent interest
• 4 anchor institutions each investing in 100,000 square feet of R&D lab space
FUTURE MOBILITY AND THE CA MOBILITY CENTER
City of Rancho CordovaBusiness: 31 Employees: 371Banalogic
City of SacramentoBusiness: 95Employees: 1,249Rex Hutchison Racing Engines
City of West SacramentoBusiness: 18Employees: 173Enoven Truck and Body
City of RocklinBusinesses : 17Employees: 55Lawton Industries
City of Elk GroveBusiness: 13Employees: 40Gnb Corp
City of RosevilleBusinesses : 23Employees: 243Sinister Manufacturing Company
Placer CountyBusinesses : 21Employees: 460Autoflow Products
El Dorado CountyBusiness: 16 Employees: 228Rack-It Truck Racks
Sacramento CountyBusiness: 67Employees: 1,854Pacific Truck Tank
Yuba CountyBusinesses : 2Employees: 11Auto Gear Performance
Yolo CountyBusiness: 11Employees: 505Enersys inc
City of WoodlandBusiness: 7Employees: 304Elite Motorsports
CALIFORNIA MOBILITY CENTER
German led, state-of-the-art center focused on prototyping future mobility including autonomous, electrification, connectivity and shared mobility technologies.
• $100 million Enertech Capital fund• $15 million in partnerships• Center chaired by Arlen Orchard, CEO of
SMUD• $50 million investment by Los Rios Community
College District to develop a state-of-the-art training center
• Engineering programs from UC Davis andSacramento State will consolidate engineering programs for the Center
• Fall 2020 launch date
Source: Sacramento Business Journal Oct. 2019
DIGITAL TRANSFORMATIONS: CONSORTIUM MODELS
Makeup include leaders in regional and Bay Area firms in banking, mortgage, lending and wealth advisory and experts on fintech and digital innovationconcepts
• 8,824 fintech jobs
• 52 fintech companies
• Technology focus on helping small business, lending and digital banking
Life Science
Composed of private biotechnology,pharmaceutical and medical devicebusinesses, education institutions and healthcare providers
• 500+ life science companies
• 17,350 jobs in life science
• 10% job growth rate since 2014
• Strong focus in agbiosciences, biotechnology and medical devices
Fintech
In partnership with Per Scholas, CodeBridge provides no-cost training in web development and job placement assistance forindividuals from underrepresented communities, with over 250+adults trained todate.
18 -week program, including 12 week GA Software Engineering Immersive training
PRESS“Year ago this guy was a janitor. Now he’s working for a hot start up.”
CodeBridge
Interapt is a small, Louisville-based services firm that’s partnered with GA to bring opportunities to underserved parts of the Louisville. Just last month, all 20 graduates of the pilot were offered full-time jobs - as registered apprentices -working on projects for Humana, Kindred, and GE.
GA’s 12 week immersive training in Software Engineering
PRESS“GA Partners with Interapt to Launch in Kentucky and Bring Best-in-Class Tech Training to New Markets”
Disney’s CODE:Rosie program trains women employees in non-technical roles to become software engineers, therebyincreasing gender diversity intheir tech organization.
GA’s 12 week immersive training in Software Engineering
PRESS“How Disney is turning women from across the company into coders”
UPSKILL STRATEGY: GENERAL ASSEMBLY
To date, GA has enabled over 1,000 individuals from underserved communities to access training and pursue careers in tech at no cost and teamed up with leading companies to invest in building diverse tech talent pipelines.
Provides scholarships in local communities for immersivedigital. trainings. Participants are placed in a technical internship following completion of the program, with 65 students served to date.
GA’s 12 week immersive training in UX Design and Software Engineering
PRESS“The Adobe Digital Academy: An Apprenticeship for Today’sWorld”
UPSKILL STRATEGY: GENERAL ASSEMBLY
The goal of this effort is to provide those impacted by COVID-19 an opportunity to reskill for career tracks in tech that have strong long-term prospects and build a diverse talent pipeline to attract tech jobs to Greater Sacramento.
Our goals:● Reach 100 adults in underserved communities, lay the
foundation to scale to reach up to 2,000● Goal is to create a proof-point -- demonstrate that
reskilling for a software engineering or IT career can be done -- and then scale the impact using $10M of deployable funding through 12/31/2020
● There is value in creating talent with skills and credentials attractive to big tech employers like Google, Salesforce, Microsoft and Amazon to draw their investment to Greater Sacramento
Their proposal:● A localized reskilling program centered on two
career tracks:○ GA’s Software Engineering Immersive, for entry-
level roles as developers○ Google’s IT Professional Certificate, for entry-
level roles in IT (through GA’s partners MeritAmerica)
● GA will stand up a virtual team to coordinate program management of this initiative, includingadmissions, training and facilitating job outcomespost-program
● Total estimated investment is $720,000, net of a $100,000 contribution from The Adecco Foundation
UPSKILL STRATEGY: GENERAL ASSEMBLY
Offers reskilling opportunities to exit into entry-level jobs in high-demand tech jobs. Provides both a software engineering track and IT profession track to maximize access while deploying programs with strong records for job outcomes.
DiscoverGA and Merit will host
virtual information sessions to help
candidates choose a program and apply.
ApplyProspective students
apply. Successful applicants are invited to
enroll.
ReskillStudents complete their program pathway with ongoing support until
they’re successfully placed into a job.
1 2 3
DIGITAL TRANSFORMATION OF THE REGIONAL ECONOMY
The Greater Sacramento region was one of the first regions to recover from the 2001 recession but one of the last to recover in 2008.
In the Brookings Institute’s 2018 report it noted that 24% of the occupations in the region now require high level digital skills, up from only 6.2% in 2002.
RECOVERY PLAN: THE PROBLEM TO ADDRESS
• Aspen Institute for Upskilling America noted that more that 8 in 10 middle-skill jobs (82%) require digital skills.
• The number one program or skill that can remove people from poverty was obtaining a Salesforce certification.
Source: Digital US: Building A Digitally Resilient Workforce, Digital US Coalition and Aspen Institute
RECOVERY PLAN: VALUE EXPLANATION
UC Berkeley’s Dr. Enrico Moretti demonstrates the value of tradable sector jobs and their impact on the economy:
• Digital jobs have the highest multiplier effect, creating 4.9 jobsfor every high tech and digital job created.
• Conversely, a non-tradable job like a barber or restaurant worker supports <1 additional job.
• Government jobs have some of the lowest multiplier effect creating 0.25 jobs for every one government job.
• This is due to the fact these jobs do not have a supply chain, do not scale, have no global connectivity and do not create wealth.
REGIONAL RECOVERY PLAN RECOMMENDATIONS
Enterprise Retention and Scale Up Fund • Loans to tradable sector companies• Offers permanent working capital to businesses
ELEVATE convertible debt fund • Offers assistance to companies ready to scale so
they can expand and hire faster
Excellence in Student Entrepreneur Program • Supports new student entrepreneurship venture
programs
Digital Upskilling • Training and placing of displaced and
disadvantaged workers in digital skills• Offering incentives to companies for hiring
these workers
Arts to Technology • Focus on upskilling artists in digital skills by
training arts and creative types so they can work and produce art for the community
Q & A DISCUSSION
Barry Broome
President & CEOGreater Sacramento Economic Council
SACRAMENTO INTERNATIONAL AIRPORT UPDATE AND DISCUSSION
Mark Haneke
Air Service Development and Marketing ManagerSacramento International Airport
SACRAMENTO COUNTY AIRPORT SYSTEM
GSEC Champions Program
COVID-19 Impact on SMF’s Air Service Development ProgramMay 27, 2020
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2019 Was a Banner Year for SMF!
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Source: Sacramento County Airport System
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Summer 2020 Looked Promising
Aeromexico planned double-daily flights to Guadalajara (Jul)
Air Canada planned to launch 2nd daily nonstop flight to Vancouver (Jul-Sep)
jetBlue planned to launch 2nd daily (daytime) nonstop flight to JFK (Jun-Sep) and extend seasonal SMF-BOS nonstop flight (May-Oct)
Southwest Airlines planned 100 weekday flights to 23 destinations (Jul)
Volaris planned double daily flights to a combination of Guadalajara/Leon/Morelia (Jun-Aug)
SMF was anticipating 175+ flights/day to 40+ nonstop destinations by July 2020
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ount
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SMF TSA Counts and % of 2019 Totals
TSA Counts SMF 2020 as % of 2019
Then COVID-19 Reality Hit
Passenger demand fell off a cliff in mid-March
We hit bottom around April 20
Source: Sacramento County Airport System
77
Over 50% of US Passenger Carrier Fleets are Grounded
Airlines struggle in attempts to match capacity to passenger demand
Source: Airlines for America
78
Airline Capacity Continues to Outstrip Passenger Demand
Delta is artificially capping its flights at 60% to comply with social distancing recommendations
Source: Airlines for America
79
New Recovery Hope Springs Eternal in May
SMF outpaces the US National Average by 3.5 percentage points throughout May
Source: Sacramento County Airport System
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SMF 2020 as % of 2019 US 2020 Avg as % of 2019
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Sacramento Economic Fundamentals have Changed since the Financial Crisis of 2008-09
Sacramento lies in the upper quartile of 2020 Metro GDP growth
81
Sacramento is Better Poised to Weather the Covid-19 Crisis
Sacramento lies in the upper right quadrant of medium-term Metro GDP growth
82
Metro Areas with strong Tourism/Entertainment Sectors Will Take Longer to Recover
Restoration of nonstop capacity to some Leisure-oriented markets might take longer
Source: Oxford Economics
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Uncertainties Remain
V, U, W, L-shaped recovery?Double-dip in Fall 2020?24-/36-/48-/60-month recovery to CY2019 levels?
Leading economists differ in their recovery projections
84
Past Precedent Suggests Recovery OpportunitiesVFR and leisure markets tend to recover faster than business markets following an economic downturn
Potential for increased service to sun/beach destinationsMore Hawaii (Kona, Lihue)More Mexico (Cabo, Cancun, Puerto Vallarta)More sun (Palm Springs, Florida (Orlando/Ft. Lauderdale))
Historical Precedent:Hawaiian Airlines launched nonstop service post 9/11 to SMF in June 2002Alaska Airlines launched nonstop service post financial crisis to Maui in April 2010
85
Encouraging Schedule Developments at SMF
Volaris resumes SMF-GDL service June 1 following a two-month suspensionDelta adds back SMF-ATL #2 in June and plans to resume SMF-MSP nonstop service in JulyHawaiian and Southwest plan to resume nonstop service to Honolulu and Maui after the Governor lifts the 14-day mandatory quarantine for all arriving passengers (~July)Southwest advised anecdotal evidence of SMF outpacing other California airport recovery rates
86
Conclusions
Initial SMF traffic recovery statistics are encouragingWe are comparing our initial Covid-19 recovery traffic projections with several other econometric models and will revise as neededBiggest unknowns at this point include:Will there be a second resurgence of the virus in fall 2020?Will it take 24-/36-/48-/60- months to recover to 2019 traffic levels?
Transatlantic/transpacific aspirations are likely delayed 2-3 years as traffic recoversNew short/medium-haul sun/beach destination service opportunities will likely emerge within the next 12-18 months (more Hawaii, more Mexico, more Florida)
SMF is well-poised for a solid recovery
Questions?
Thank you!
MODERATOR: ECONOMIC RECOVERY NEXT STEPS IN SACRAMENTO COUNTY
Rico Rivera
CEO & RealtorSilicon East Real Estate
Michael JassoAssistant City Manager City of Sacramento
Michael Ault Executive Director Downtown Sacramento Partnership
Ken Turton President Turton Real Estate
PANELISTS: ECONOMIC RECOVERY NEXT STEPS IN SACRAMENTO COUNTY
FINAL THOUGHTS AND CLOSING REMARKS
Patrick Kennedy
Supervisor, District 2Sacramento County
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