Walnut Creek Set to Discuss Economic Development Action Plan

On Tuesday, the Walnut Creek City Council is set to review and discuss its draft economic development action plan to focus on its strategies over the next two years.

The update comes after the city adopted a five-year strategy in 2018, however, due to COVID-19, the city had to divert from the efforts of the plan, which was built on 2017 and 2018 data which is not dated.

The staff report highlights traditional data sets are now lagging too far behind the emerging trends and industries have changed while dealing with supply chain issues, work from home and labor shortages. Staff is seeking developing a shorter-term and more action-oriented economic development plan would be beneficial during this continued time of economic uncertainty.

The city interviewed 55 companies and organizations to understand how Walnut Creek was viewed in the marketplace and current conditions.

These interviews included large property owners, brokers, developers and employers. Local competitors, neighboring cities, and regional economic development organizations also provided input. Small group discussions with key stakeholders were held in partnership with the Walnut Creek Chamber of Commerce (the Chamber) and Walnut Creek Downtown (WCD). Additional interviews were conducted with regional and national site selectors, investors, brokerage houses, and industry experts.

Highlights from the Feedback

• Walnut Creek is seen as a highly successful community and should build on its strengths.
• There was general agreement that the recent retail, office and medical office studiesprovided many strong recommendations that should be incorporated into next steps. An executive summary of the findings and the studies themselves are available at https://www.walnut-creek.org/departments/economic-development/lifestyle .
• The City’s proactive responses in the pandemic to support businesses were appreciated and seen as effective in helping multiple types of businesses. From flexibility in the use of parking spaces for curbside pickup, temporary signage, fast-tracking tenant improvements to meet COVID guidelines, and the very popular outdoor dining, the City responded quickly to lend assistance to businesses of all types.
• Walnut Creek was not immune to the change around us but generally, our businesses fared well and, in some cases, did better than our surrounding competitors. That said, Walnut Creek cannot afford to rest on its past success and must take proactive steps to stay ahead of a field with more direct competition.
• Different industries had very different experiences through the pandemic and have different
  future needs. For instance:
  • RETAIL: Downtown as a whole continued to thrive. Sales tax receipts dropped but are now back at pre-pandemic levels. Broadway Plaza is the highest leased property in the corporate portfolio. Restaurants blossomed with the combination of outdoor dining and grants, including restaurant grants authorized by the City Council. Even older neighborhood centers did well in refilling spaces. The main challenge ahead is the impact on independent retailers, who continue to face high rents and difficulty attracting
    market share. It is also important to revisit retail/ground floor commercial North Downtown Specific Plan (NDSP) + West Downtown Specific Plan (WDSP) and some other small zoning tweaks needed. Of lesser concern is finding creative ways to repurpose or demise large-format vacancies like Stein Mart.
  • HEALTH CARE AND MEDICAL OFFICE: With the advent of the two new cancer centers by BASS Medical and John Muir Health, demand for medical office space continues to be high. The market analysis predicts between 130,000 to 200,000 square feet of new demand from the cancer centers alone, which would fill all current medical office building vacancies. This could provide opportunities for the aging Class B and Class C office spaces
  • AUTO: Auto sales soared in the pandemic and continue to be strong. Several dealerships renovated their properties (Volvo, Mercedes Benz, Subaru). There is currently active debate on the future of auto dealerships. Walnut Creek has been of great interest to electric vehicle manufacturers. Interestingly, some are only seeking showroom space, while others are seeking more traditional dealership footprints that would also allow service. There is debate on whether dealerships can successfully go vertical or if they will simply relocate inventory and service to offsite locations. Maintaining Walnut Creek’s reputation and presence in the auto marketplace is an important source of jobs and an amenity for our residents and visitors
  • OFFICE: Perhaps the most impacted segment of Walnut Creek’s economy has been office. Walnut Creek has long been known as a job center with quality office product. Pre-pandemic, the Class A office buildings near BART were prime office locations, and vacancy levels citywide were low. With the dramatic increase in work-from-home, office vacancy rates skyrocketed. The market is unsettled and likely will be so for several years. Attention needs to be paid to marketing Walnut Creek as a strong option for businesses looking to open satellite locations near their employees and positioning for a market rebound.

Note — the staff reports highlights 45 points regarding economic development which some include:

Walnut Creek City Council Meeting
May 16, 2023
6:00 pm – City Council Regular Meeting
City Council Chamber, 1666 N Main St, Walnut Creek
Staff Report: Click Here