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Thursday, May 17, 2012
Regional Focus: August 2008
A Little Less Conversation
Elk Grove turns in its red tape for a red carpet to welcome business
Story by Rebecca Adler
It’s no secret Elk Grove has more people than jobs — with some estimates at a 7-to-1 ratio — but perhaps lesser known are the steps the city is taking to correct that balance.
The past several months, the city of Elk Grove has implemented measures to lure new businesses and keep established companies happy. These include creating a fee-deferral program to offset development costs, increased investment with the Sacramento Area Commerce and Trade Organization to find leads on prospective companies, creating an Economic Development Corp. to bring in new businesses, and creating a monthly customer service forum.
The City Council recently increased the city’s annual contribution to SACTO to $10,000 for the next fiscal year. Previously the city had only contributed $1,000 annually. Other changes, such as the fee-deferral program and revised plan submittal for a business license and certificate of occupancy, have already begun making it easier on businesses and developers.
“Fees and red tape can be deal breakers in today’s slowing economy,” says Jason Brown, partner and vice president of development for Folsom-based Redfern Development LLC. “Cool Hand Luke’s is a perfect example of a company helped by the new programs in Elk Grove.”
Cool Hand Luke’s, a steakhouse chain based in Fresno, almost balked at locating in Elk Grove after learning about the fee schedule imposed by the city. After discovering that the company was able to defer payments for up to five years after opening, it agreed to the deal late last year.
“I don’t think it’s a secret that Elk Grove has had issues in the past,” Brown says, “but I’ve seen a concerted effort to change. Elk Grove is still a young city. Of course there are some kinks that need to be worked out, but the direction they are taking is a positive step.”
In the long run, the fee-deferral program doesn’t cost the city anything, and it’s a huge incentive for businesses looking to take the next step in launching or relocating says Elk Grove Mayor Gary Davis. “There are costs associated with relocating or starting a business, and it can be difficult to have more fees added to those costs,” he says. “With the new scenario, businesses are given the opportunity to start turning a profit before they begin paying the fees, and even then they are given the choice to pay in installments.”
Some of the other businesses that have already benefited from these changes include Tops Yogurt, owned by Raymond Wheeler, Center Pointe at Laguna West and Petrovich Development with its Calvine Pointe project.
But it’s not just about fees, says Steve Czarnecki, executive director of the Economic Development Corp. It’s about growing the business community in Elk Grove and bringing in high-paying jobs. Czarnecki says Elk Grove’s focus in the past has been on rooftops, causing a disparity between the city’s population and its employers.
“Elk Grove has done a tremendous job in growing its population. In the past 10 years the city has grown from 70,000 to 140,000 residents. Last year alone it grew 2.5 percent. Even with the down economy, Elk Grove is growing,” Czarnecki says. “One place we haven’t seen a lot of growth has been in high-end jobs and commercial industrial. Now we’re looking at what we can do to bring those high-end, high-value jobs to the city.”
To that end, one of the first things the city of Elk Grove did was to form the Economic Development Corp. The city has committed a $150,000 annual contribution to the EDC over the next five years, with an agreement that the EDC will launch an aggressive, sustained effort to attract more jobs to Elk Grove.
“That is a very wise investment that we expect will pay real dividends to Elk Grove taxpayers in the form of a healthier local economy that will generate more revenues and help fund essential local services,” says Christine Brainerd, public information officer for the city of Elk Grove.
With the help of the EDC, Elk Grove is looking to lure tech companies, from biotech to electronics. “Elk Grove is really poised to be successful. We have a strong talent pool of workers. We have land available for development. Our medical infrastructure is growing,” Czarnecki says. “We’re in a very strong position to bring in these companies.”
While there are those who credit the changes to the longtime criticism of Elk Grove’s business practices, the city’s mayor says the improvements have been made to help stimulate the economy, improve quality of life and create viable jobs for residents.
“We are making changes to the way we do business because it is important that the city be more aggressive about bringing jobs to Elk Grove,” Davis says. “High-paying jobs are what we had in mind when we began making changes — nothing industry specific — but we’re definitely looking for companies with higher paying, office-type jobs to locate in the community.”
Bringing more jobs inside the community will cut down on traffic problems, thereby improving air quality and decreasing commute times, which will create a better quality of life for citizens. “Our need to streamline the business approval process is directly related to job growth and is intertwined with other issues like traffic and air quality,” he says.
In the past there have been issues with getting fire permits, having meters connected with utilities, or any number of minor issues that become major when a business can’t open on time because it’s waiting on approvals.
In order to streamline the process, the city is working to connect the utilities needed for approval, such as the Sacramento Municipal Utility District and the Sacramento Regional County Sanitation District, just to name a couple.
“A project manager on the city side should coordinate all these different agencies,” Davis says. “If a particular business calls and asks what they need for approval, they need to get a clear answer. Having a go-to person is absolutely necessary to ensure this happens.”
For developers, getting agencies to work together is huge, says John Costa, senior legislative advocate for North State BIA. “One of the biggest issues for developers — aside from fees — is time,” Costa says. “The amount of time it takes to get an application processed, especially if there are holdups along the way, can really slow down a project.”
Costa says business practices in Elk Grove have long been an issue for homebuilders and developers, who have faced high fees and delays because of holdups among the many agencies needed for approval. However, he says the past issues can be attributed to the city being new and growing fast.
“Because it’s a new city, they have kind of had to take a step back and look closely where they want to go as far as business and growth,” he says. “There is a lot of opportunity in Elk Grove. Now that the city is focused on bringing in businesses they’ve brought in an economic development director — something major they were lacking for a long time. Bringing in talented people shows that Elk Grove is being proactive about attracting businesses and keeping them.”
He also credits the city for its approach in contacting the business community for suggestions and keeping an ongoing dialogue with business owners and developers.
“The city is really looking at what’s working and what’s not. How they can bring businesses to the community, and what they can do to keep the companies they currently have,” Costa says.
Janet Toppenberg, president of the
Elk Grove Chamber of Commerce, says even the small changes, like the customer service meeting once a month or giving local vendors priority in city bids, are a sign to the business community that Elk Grove is serious about making lasting changes in how it deals with bringing — and keeping — employers in the area.
“There is always room for improvement in the development process,” she says, “But the point is that Elk Grove is striving to make things better, and that’s a really good thing.”
