Small Business Recovery Framework

COVID ImpactsSince January 2020

◦ 36.5% fewer small businesses are open, and for those that are revenues are down 34.3%

◦ Consumer Spending is up 1.8% overall, down 15.8% for Restaurants and Hotels and, up 21.3% for Retail

Key ConsiderationsPre Covid• Activating districts through place-making to

increase vibrancy and drive foot traffic• Form a multi department small business

support team• Engage with external main street

associations• In person engagement with businesses

Deal with present

situationRespond

React and emerging stronger

Recover

Prepare for

success in “new

normal”

Thrive

“New Normal”• Enhanced communication and

connection to resources• Technical assistance include digital skills

enhancement• Focus on resiliency• Use crisis as opportunity

Immediate COVID ResponseFinancial Assistance

• Small Business Grants

• Two Rounds through the City, matching funds to Alameda County

• Waiving late fees on Business Taxes

• Promoted Federal Assistance programs including Paycheck Protection Program

Technical Assistance and Communications

• Business Hotline and COVID Business Resource Page

• Gift Fremont

• Pop Up Patio and Park Business Operating Permit (P-BOP)

• Small Business Working Group with Neighborhood Business Associations

Policy

• Small Scale Commercial Eviction Moratorium

• Third-Party Delivery Fee Cap

Analysis and Research

Four Masters students from the University of Southern California researched our small business environment for their Masters Thesis

Interviews, Case Studies, Literature Reviews

Explored where small businesses current get information on resources, and what resources are the most important for the City to provide

Silicon Valley Roundtable Report developed by a local team of experts and outlines recommendations relevant across the region

The Fremont OpportunityDiverse residents and businesses and business districts

Resilient industrial economy and essential workers

Purchasing power from high household income and employment

Example: Maaco of Fremont

Action Steps

Communications and Engagement

Technical Assistance Collaboration with partners

Make effective emergency programs

permanent

Communications and Engagement

• Not one size fits all

• Growing our contact list

• Diversifying our communication channels

• Increasing in person engagement safely

Technical Assistance

oSmall Business Point of Contact

oEnhanced website resources

oMarketing services and business management

oBusiness Resiliency

oReviewing City Regulations and Processes

Collaboration with Partners

Make Effective Programs Permanent

Use the crisis as an opportunity and evaluate emergency programs for long term applicability.

Small Business Recovery Framework

PEOPLE / TALENT Drivers of Economic Development

KeyConsiderations

PRE-COVID

• Intense Competition for talent

• Lack of Employer and Job Seeker Awareness

• Time and Resource Constraints (employer)

• Confusing and lengthy process (misconceptions)

WITH COVID

• Shelter In Place Constraints (digital divide, access to equipment for in-person classes)

• Uncertainty Regarding COVID impact on Business (certain sectors more than others)

• Disproportionate impact of pandemic on women and minority workers

CAUTION:GAPS

AHEAD!

SKILLS GAPDUE TO

AUTOMATION

AWARENESSGAP

EMERGING SECTOR

GAP

WIDENING GENDER AND RACIAL GAP

You Are Here:FREMONT, CA

“Hardware Side of the Bay”

70%

Fremont a Beacon of Opportunity

Not all Jobs are Created Equal

• Median Advanced Manufacturing wagesare $35/hr, and Entry level is $25/hr.

• Advanced Manufacturing sector jobs morebroadly accessible than other industries.

• More than 50% of the sector’s workerspossess less than a bachelor’s degree.

• Fremont companies continued to operateand hire people even during the pandemic.

MakingHigh-Income and Growth Accessible

Welder/Cutter - $53K

Sheet Metal Worker - $74K

First-Line Supervisor- $95K

Industrial Engineer - $115K

CurrentInitiatives

Employer Partners

FUSE Fellowship: Summer Challenge 2019

Educational Partners

Facebook Career

ConnectionsPOLICY INPUT & ADVOCACY

What An Opportunity (To Bridge These Gaps)!

What’s Ahead:

Inclusive Economic Recovery

ELF – Earn and Learn Fremont

“This program is truly worth

it…the skills you learn you can take anywhere.

I’m just thankful for this program giving me an opportunity to

better myself and be a part of

something.”

- Reggie Battle (Previously Unhoused FRC Client)

My name is Maria C. Hernandez. I came to the USA in 1996. I start

working in McDonalds and KFC, 8 years at Club Sport, 15 years

Holiday Inn, 10 years Hilton Double Tree.

Now I have the privilege to work in Evolve company. I have a great

time, excellent teamwork, perfect managers!

I have four kids: Miguel,Diana, Brian and Victoria.

GAME PLAN

Raise Awareness on Mfg Jobs

Economic Recovery Roadmap:Growing Our Tax Base & Ensuring a Financially Healthy City

Fremont Economic Development

Our Mission

Foster business activity and investments in Fremont that lead to a higher quality of life for our residents by facilitating the creation of good jobs, a thriving environment for businesses of all sizes, and a financially healthy government to support City services.

ResidentialProperty Tax,

37%

FranchiseFees, 5%

Services,3%Other, 3%

Sales Tax,26%

BusinessTax, 6%

Hotel Tax,3%

CommercialProperty Tax, 17%

GENERAL FUND REVENUE BY SOURCEFY 20/21 ADOPTED OPERATING BUDGET

How Our Dept.’s Work Supports City

Services

Sales Tax,26%

BusinessTax, 6%

Hotel Tax,3%

CommercialProperty Tax, 17%

GENERAL FUND REVENUE BY SOURCEFY 20/21 ADOPTED OPERATING BUDGET

How Our Dept.’s Work Supports City

Services

EDD’s work directly influences activities accounting for over half of the City’s GF revenues in a typical year.

COVID-19 Impact on Fremont’s Economy

Historically low 2.7% unemployment

15,000 jobs added since 2015 to over 115,000

$3 billion in Fremont employee wage growth

Jan.2020

April 2020

Today

Unemployment balloons to 11.2%

Over 12,000 Fremont residents out of work

Consumer spending down 35%

Unemployment at 5.4%; 6,200 jobless residents

Consumer spending down 1.3%

$12M FY 20/21 GF revenue loss

ELECTRONICS

Semiconductor wafers & equipment, printed circuit boards, data storage, robotics, & industrial IoT

Includes companies such as Lam Research, Seagate, Western Digital, Synnex & Quanta Computer

LIFE SCIENCES

Fremont’s fastest growing sector and highest sector count at over 115 companies

Includes Boehringer Ingelheim, Evolve Manufacturing, ThermoFisher, Bionova Scientific & Think Surgical

CLEANTECH & AUTOTECH

Battery and solar equipment industry concentration in Fremont including Enovix, Enphase, & Nextracker

Auto-tech & autonomous vehicle growth including Tesla, Waymo, Hyundai, Pony.ai & ZOOX

Fremont’s Growth Sectors are Essential

Fremont’s Diversified Economy Buffered City from Greater Pandemic Losses

-22%

-31%

-31%

-33%

-38%

-40%

-42%

-59%

-60% -50% -40% -30% -20% -10% 0%

Fremont

Union City

Hayward

Newark

Oakland

Milpitas

Pleasanton

San Francisco

Change in Y/Y Per Capita Sales Tax, Q2 2019 to Q2 2020

Fremont’s Industrial Lands are the Modern Silicon Valley Garage

Apple Garage Historic Landmark, 1977

Hyundai’s Urban Air Mobility facility in Fremont, Today

Strategic Value of Fremont’s Industries

• Fremont home to largest inventory of industrial real estate in Silicon Valley, providing flexible space for innovative companies to grow

• Fremont’s hardware ecosystem plays vital role within Silicon Valley’s innovation economy by supporting development of physical products

• The manufacture of these physical products (and equipment used to make them) generates sales & use tax and unsecured business property tax.

Fremont’s Industrial Lands Generate More Sales Tax than all Major Shopping Centers Combined

$- $5,000,000 $10,000,000 $15,000,000 $20,000,000

Gateway Plaza

Warm Springs Area Retail

Irvington Area Retail

Centerville Area Retail

Fremont Hub

Ardenwood Tech Park

City Center

Pacific Commons

Fremont Auto Mall

Fremont Industrial Area

Sales Tax Revenue by Geography, FY 19-20

Case Study: Boehringer Ingelheim

2011: Boehringer Ingelheim (BI) leases 1st

Building in Ardenwood, creates 150 middle wage

and skilled jobs

Company purchases millions in new

equipment, generating use tax and unsecured

property tax

2015: Grows its workforce and invests in second building, more use and property tax

generated

2018: Company expands into 4th building, grows

workforce to 500 employees

2020: Invests $230 million for 3rd bioreactor, increasing output 150% and growing Fremont

workforce to 700

2020: BI Fremont becomes one of the

largest biotech manufacturing

operations in CA

Understanding the Role of Non-Residential Real Estate on Fremont's General Fund

Non-residential real estate accounts for approx. 1/5 of City’s General Fund revenue

More stable than sales tax (less cyclical)

Strong growth in property tax assessments tied to EDD’s facilitation

Industrial is Fremont’s fastest growing CRE asset at 65% increase over past 5 years

Industry generates unsecured business personal property tax assessments

Case Study: Pacific Commons South

• 2.5 million square feet of of state-of-the-art flex space

• One of the largest industrial Projects ever in the Bay Area

• New tenants in computer electronics, medical device manufacturing, clean technology and ecommerce

• Millions in property tax revenue for City, County, and FUSD

Case Study: Artist Walk Apartments

• Revitalized key stretch of Centerville business district on long vacant site

• Development created new gathering location for Centerville Community

• 185 Apartment Units, many leased to Facebook employees

• 30,259 SF of Ground Floor Retail with 800 linear feet of highly visible street frontage

• Retail nearly entirely leased

• Building sold for $110.25M in 2019

Recommended Strategies to Support Investment & General Fund Revenue Growth

Continue to advise on fiscal impact of major development permits and land use change decisions

Work with Staff & Council to establish fees and regulatory processes so they that encourage investment, when up for review

Generate awareness and promote Fremont as a place to invest and do business in

Cultivate and expand external partnerships to further strengthen Fremont’s economy

Promote key industry sectors through strategic policies, marketing, & streamlined processes

Support growth of existing Fremont businesses while assisting new ones who choose to locate in Fremont

Communications/Engagement

Technical Assistance

Collaboration with Partners

Make Effective Programs Permanent

Focus on Employer Needs

Raise Awareness of Mfg Jobs

Advise on Inclusive Strategies

SMALL BUSINESS JOBS / WORKFORCE / TALENT BUSINESS TAX / REVENUE

Expand Partnerships

Identify Funding Sources

Support Key Industry Sectors

Advise/Facilitate on Development

Enhance Business Environment

Promote Fremont as Place to Invest

Provide Business Support

Build on External Network