Snapshot of Pacifica's Economy Reveals a City 'Constrained By the Lack of Business Space Available'

In a report drafted by consultants for the City of Pacifica, the Pacifica Economic Development Plan describes the market forces and constraints that impact efforts to expand business activity, fill commercial vacancies, diversify the economy, and improve Pacifica's fiscal conditions.

Prepared by Wahlstrom & Associates, the findings and recommendations were generated from interviews with City staff and other community stakeholders; a review of the economic, real estate and demographic data; and an analysis of the local economic development opportunities and constraints. 

When it comes to Pacifica's economy, here's what the report reveals:

Pacifica’s economy suffered during the recession, with 400 jobs lost between 2006 and 2010 — nearly all of the jobs lost were in the tourism industry. However, the economy is recovering well with 260 new jobs created in the health, professional, and business service sectors between 2010 and 2011. Tourism is making a gradual comeback. 

Despite the ups and downs of the national and regional economy, Pacifica’s economic development opportunities are constrained by the lack of business space available to technology and other startup companies. Without the development of new businesses space, Pacifica’s economy will remain dominated by low wage retail and tourism jobs, with little opportunity to capture a share of the regional investment in the creation of software, biotechnology or other tech sectors.

Potential technology businesses and other commercial/office users attracted to Pacifica will pay high wages, retain some out-commuters to work in Pacifica, and generate good fiscal benefits from property tax and business-to-business sales receipts. 

The report recommends that the need to build new business space is not a task that the City can accomplish on its own. New commercial development will ultimately require a partnership between the City and private property owners, with the private sector taking the lead. Key sites like the Quarry cannot be developed until an owner emerges with the intention and financial capacity to invest in the site in a manner that is consistent with city values. The City can require the property owner and their developer partners to build new Class A office and/or laboratory space as a project approval condition. However, the City’s ability to encourage new development requires cooperative and assertive property owner/developer partners. 

The plan also recommends that the City should support proposals to expand the number of hotel rooms, which will generate Transit Occupancy Tax (TOT) revenues and additional visitor spending tax receipts. New hotel rooms generate TOT revenues and they attract visitor spending into the City. 

Objectives and recommendations to make this happen can be found on page 2 of the Pacifica Economic Development Plan here. 

According to the report, Pacifica has a very small economy with approximately 39,000 residents and 21,000 employed workers, of which 18,000 leave town five days per week to commute to other employment centers.

Local employers generate only 4,400 jobs, of which 2,000 commute into Pacifica from out of town. This means that the City’s population shrinks to 23,000 people during the workdays, which greatly reduces the capacity to populate restaurants and purchase services and retail products at local business establishments.

Approximately 530 private sector employers are located in Pacifica, who generate 4,390 jobs. Government and non-profit employers supplement the jobs generated by private employers.

Relatively low wage retail and hospitality establishments generate nearly 40 percent of the local jobs. Retail jobs are supported by local spending, and leisure and hospitality jobs are dependent on weekend tourism spending. Other significant economic sectors that generate good paying jobs include health and private education services (840 jobs), professional and business services (560 jobs) and construction (530 jobs). 

Pacifica’s economy is comprised primarily of small firms that employ fewer than five employees. Approximately 65 percent of local firms are in this category, and 85 percent of establishments have 10 or fewer employees. The average Pacifica business employs 8.3 workers.

An administrative draft report of the Pacifica Economic Development Plan can viewed on the City of Pacifica website here.

Do you think Pacifica needs to build new office space to capture a share of the regional investment in the creation of software, biotechnology or other tech sectors? What about expanding the number of hotel rooms, which will generate Transit Occupancy Tax (TOT) revenues and additional visitor spending tax receipts? How do you think Pacifica can improve fiscal conditions?