With overwhelming support from local business representatives, the Morgan Hill City Council April 19 approved the Economic Blueprint, which has been in the works since 2015.
The Blueprint serves as a long-term guide for city planners and the private sector to grow Morgan Hill’s economy and public revenues by addressing current impediments to such growth and capitalizing on existing opportunities.
The five-member council approved the Blueprint unanimously, after representatives from the Chamber of Commerce, Downtown Association and Morgan Hill Tourism Alliance submitted their comments in support of the document draft released by city staff last week.
In summary, the Economic Blueprint lists four key industries that planners expect to drive the economy and create jobs, revenues and a “fiscally sustainable future:”
• Innovation and advanced manufacturing;
• Retail;
• Tourism, including leisure, agriculture, wine production and recreation;
• Healthcare, particularly the medical service and diagnostics industries.
“By articulating clear intentions with these industries, and developing implementation strategies, the city, the business community, businesses, developers, investors and other economic development partners will be better positioned to realize the dividends of a focused and collaborative effort,” the Blueprint reads. “From the city’s perspective, a primary responsibility is to make land use and policy decisions that will attract investment, remove unnecessary barriers, achieve economic sustainability and in return enhance the community’s quality of life.”
Members of the public who spoke at the April 19 meeting urged the council to keep its eye on what they see as a top priority for the economic health of Morgan Hill: attracting more jobs to town.
John Horner, President and CEO of the Morgan Hill Chamber of Commerce, noted the vast discrepancy between the number of working residents in town versus the number of jobs in the city limits.
“From 2002 to 2014, if jobs growth had kept pace with resident growth, there would be another 3,500 to 4,000 jobs in Morgan Hill,” Horner said.
In a letter to the council, Horner also emphasized the many roadblocks to business growth here that are listed in the Blueprint: higher city planning/building fee structures than neighboring cities, the absence of new commercial or industrial square footage in Morgan Hill and the conversion in recent years of hundreds of acres of undeveloped industrial land for residential uses.
“The Morgan Hill Chamber of Commerce has been very concerned about our city’s decade-plus history of adding working residents at more than 10 times the rate of local job creation,” Horner’s letter states. “Becoming ever more of a bedroom community is unhealthy and unsustainable from economic, environmental and quality of life viewpoints. Contrary to the arguments some have made in the past, adding more places for people to live has not resulted in more local jobs.”
Councilmember Caitlin Jachimowicz commented that the effort to bring more jobs to Morgan Hill is not only a “quality of life” issue; it’s also a public safety concern because all the commuting creates more congestion and traffic hazards on the roads.
“We have a moral imperative to help people with their safety and quality of life, to be able to work in the place that they live,” Jachimowicz said.
Data and measurements
The 59-page Blueprint is full of financial and demographic data that illustrates the need for an ongoing focus on the four categories listed above. For example, residential properties in Morgan Hill generate about 67 percent of the city’s general fund revenue, but account for about 75 percent of general fund costs. By contrast, commercial properties contribute about 28 percent of general fund revenues, but only about 21 percent of the costs, page 16 of the Blueprint draft states.
In addition to the four key industry sectors listed above, the Blueprint also establishes “four pillars” that align with the city’s General Plan 2035 priorities: maintain the quality of life, fiscal sustainability, job growth and tourism.
The Blueprint establishes “benchmarks” that city planners and developers will be encouraged to meet along the way toward these goals. These include policies that facilitate zoning and General Plan allowances for certain types of new development, additional marketing for sports-related and lodging projects, potential new funding sources for property improvements, among many others.
The Blueprint includes detailed “work programs” that offer a timeline of when these benchmarks should be completed, and which city department will take the lead on each strategy.
Another key measurement for the success of the Economic Blueprint will be the frequent evaluation of “economic indicators” in Morgan Hill. These include:
• The city’s unemployment rate (currently 4.1 percent)
• Jobs/housing ratio (1.42 in 2010)
• The number of retail businesses in town (112 in 2015)
• Annual sales tax revenue ($8.8 million projected this year), property tax revenue ($6.3 million), transient occupancy (hotel) tax ($2.6 million)
• Commercial vacancy rate (5.24 percent in 2016)
• Total jobs in Morgan Hill (15,700 at the end of 2015)
• Business to business revenue ($1.18 million in 2016)
• Number of hotel rooms available in town (912 as of October 2016), and the occupancy rate of these rooms (now about 70 percent).
The process of drafting the Economic Blueprint began in 2015, and has been led by city staff members Edith Ramirez and John Lang. It has also included input from the council and planning commission, as well as “thought leaders” and “pathfinders” from the private sector and neighboring public agencies.
The Economic Blueprint draft can be viewed on the city’s website, morganhill.ca.gov.
