creating the places where jobs grow

METRO CORES: CREATING AND SUSTAINING THE PLACES WHERE JOBS GROW

Gregg Logan, Managing Director, January 25, 2011

RCLCO January 2011. All rights reserved, reproduction by permission only.

METRO CORE ANALYTICS “CENTERS” AS KEY ASPECT OF JOB INFRASTRUCTURE

 Economic development depends on many factors:

 Leadership  Vision  Education  Adaptability  Creating, sustaining the

places where jobs grow

 “Job infrastructure:  Employment Cores -

Placemaking • Strengthening Existing Cores • Planning for New Cores

– Greenfield –  Infill and Redevelopment


METRO CORES AND ECONOMIC DEVELOPMENT

 Regions composed of a hierarchy of Cores, or “centers”   30% to 40% of jobs, including highest

paying, locate primarily in these Cores o  The number, quality, characteristics of Cores in a

region influences job growth   Anticipate where Cores are needed,

facilitate (re)development o  Predictability: know the reasons they grow in

specific locations, plan for it   Understand criteria for creating/sustaining

quality job Cores   Provide the features, amenities,

infrastructure required


METRO CORE EXAMPLES REGIONAL JOB PLACES


METRO CORES: REGIONAL JOB FOCAL POINTS   Activity centers   Large concentration of employees, especially the highest paying

“export” oriented jobs   Tend to locate about five miles apart, near major transportation nodes   Understanding the number, composition, size, and location of Metro

Cores in a region   Framework for understanding metropolitan growth trends

enhancing planning for economic development


METRO CORES: REGIONAL JOB FOCAL POINTS   Unique attributes distinguish metropolitan regions   Yet striking similarities in terms of development   “Rules” relative to their location, evolution   Consistent types of “Centers” or employment “Core’s” across

regions   High correlation between number of Cores and total Jobs   On average 38% of jobs, especially highest paying, locate in these

Cores


6

TOTAL JOBS CORELATED TO NUMBER OF CORES

SOURCE: RCLCO

Correlation: More “centers” = more jobs

Number of Employment Cores Relative to Total Employment

Selected Metropolitan Areas

Statistically significant correlation between number of centers and number of jobs


NUMBER OF CENTERS AND NUMBER OF JOBS CORRELATION (WITH SOME ELASTICITY)

  Number of jobs per Core surprisingly consistent

  Metros with highest employment, more jobs per Core

  Largest metro areas (in Jobs), often more mature areas, have o Larger big city downtown o (Older cities) better transportation

network, grid   Jobs per core related to number

of interstate intersections   Similar characteristics,

predictability, can be planned for


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6 TYPES OF JOB CORES SHARE SIMILAR CHARACTERISTICS ACROSS REGIONS

CORE TYPE DESCRIPTION SAN DIEGO REGION’S CORES

Urban Centers •  Cultural, financial, and often governmental centers •  Typically largest concentration of high-density office

Downtown San Diego

Catalytic Core •  Locations determined by individual actors, e.g. governments, corporations, universities

Torrey Pines/UTC/UCSD, Miramar Air Station

SeaWorld

Industrial Core •  Locate around major transportation, major freeways and interstates, rail lines, airports, and seaports

•  Competitively priced land •  San Diego its R&D/Flex use more than warehousing/

distribution or manufacturing

Rancho Bernardo, Sorrento Valley, Kearney Mesa, Poway, Carlsbad, San Diego Airport, San Diego Waterfront, Otay

Mesa Border

Favored Quarter Office Core

•  Fans out from downtown in direction of dominant regional growth

•  Follows executive housing concentrations •  High-end office space often along the region’s principle

interstate

Carmel Valley, Mission Valley, parts of Torrey Pines/UTC/

UCSD

Historic Satellite Cities/Towns

•  Regions grow incorporating smaller cities and towns that were once free standing entities

•  Older commercial stock, smaller employment base, but •  Can grow into more regionally important cores

El Cajon, Escondido

Retail Cores •  Retail cores lacking regional serving/office-oriented employment


THE FAVORED QUARTER CORES GROW WHERE KEY INGREDIENTS EXIST

9

 

 EXAMPLE: Favored quarter location of executive housing …where majority of office-oriented, higher paying jobs concentrate…


SAN DIEGO: JOBS CONCENTRATE NEAR EXECUTIVE HOUSING LABOR FORCE HOUSING IS TO THE SOUTH AND EAST

10

Greater than $600,000

$450,000 to $600,000

$300,000 to $450,000 $150,000 to $300,000

Less than $150,000

Darker red = higher average Single-Family Home Sales Price San Diego County, California

SOURCE: SANDICOR

Employment Cores

High quality, high paying tech and office jobs are virtually all located near executive housing.


11

Small Region (<1.5M Jobs) Core Characteristics

Small Regions (Employment Below 1.5 Million) Average Number of Cores 8 Size Range (#Jobs) of Cores: 15,000-58,000 Average Size of Cores in Excluding CBD: 29,000

Average % of Employment Within Cores 38%

Source: RCLCO


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LARGE REGION CORE CHARACTERISTICS

Large Region (Employment Above 1.5 Million)

Average Number of Cores 14

Size Range (# Jobs) of Cores : 47,000-74,000

Average Size of Cores Excluding CBD: 53,000

% of Employment Within Cores 38%

Source: RCLCO


Predicting Growth Three Core Types Drive Growth

 Existing Core – large employment cores already shaping regional growth patterns-tend to have more than 25,000 jobs

 Emerging Cores – enough job growth over next 10 to 20 years to shape regional growth and development patterns - will have approximately 25,000 or more by 2030

 Likely New Core – areas of regions likely attract significant employment growth in the next 20 years, but will have less than 25,000 jobs in 2030


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CENTRAL FLORIDA: CONNECTING FOR GLOBAL COMPETITIVENESS CONNECTING ECONOMIC CENTERS - RAIL

SOURCE: RCLCO

14

Existing Employment Cores

Emerging Employment Cores

Likely New Employment Cores


APPLYING THE CENTERS ANALYIS

 Connecting for Global Competitiveness • Tampa Bay Partnership, MyRegion

Orlando – Identifying the economic centers – Link via transit and 30 year spatial

vision  Orange County – Innovation Way, a

New Center •  County and major land owners to planning

new major employment center  Lake Nona – Medical City •  City of Orlando and land owner creating a

new major employment center


ENVISION UTAH: NEW EMPLOYMENT CORE IN NW QUADRANT HURT DOWNTOWN?

 Is a new center needed?

 Detract from existing centers?

 OR will a new “Center” in the Northwest Quadrant impact downtown?

 Plan:   Strengthen existing centers   Add new center on Northwest

Quadrant  Conclusion: New Centers needed

even as existing centers grow


PHOENIX – RE-USE OF MESA PROVING GROUNDS

GM PROVING GROUNDS Utilizing “Centers Analysis” for the former GM Mesa Proving Grounds; can it become a new regional job center? SUPERSTITION VISTAS finding the balance between Market Demand and Sustainable Development Can Superstition Vista’s lead with jobs? What catalysts would be required? Can it evolve into a job center?


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SAN DIEGO: 15 EXISTING EMPLOYMENT CORES AND 4 MORE DEVELOPING CORES

SOURCE: RCLCO

1

8

13 14

11

15

10

9

7

6

5 4

3

2

12

E4

E1

E2 E3

MAP KEY CORE TYPE OF CORE

2008 TOTAL EMPLOYEES

2050 TOTAL EMPLOYEES

1 Camp Pendleton Catalytic/Military 30,960 35,460 2 Carlsbad/Palomar/Vista Industrial 41,300 59,400

3 Rancho Bernardo High Tech Industrial 41,500 51,900

4 Poway Industrial 31,200 41,000 5 Carmel Valley Office 17,900 21,800

6 Torrey Pines/UTC/UCSD Catalytic 106,100 126,300

7 Sorrento Valley High Tech Industrial 53,300 63,800

8 Miramar Air Station Catalytic/Military 33,400 38,600 9 Kearny Mesa Industrial 87,300 104,300

10 Mission Valley Office 52,600 64,900 11 San Diego Airport Industrial 28,300 33,700 12 Downtown San Diego Urban Core 78,200 95,800 13 NAS North Island Catalytic/Military 14,800 19,800 14 San Diego Waterfront Industrial 81,600 104,700 15 Border Industrial 17,200 66,500 E1 Oceanside Industrial Industrial 17,200 29,700 E2 San Marcos Catalytic 26,200 43,100 E3 Escondido Industrial 30,600 37,500 E4 El Cajon Industrial 25,000 35,200


ECONOMIC GROWTH HAS BEEN ENHANCED BY INVESTMENTS IN IMPORTANT CATALYSTS

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MAP KEY CATALYSTS

Tourism

1 Convention Center & Waterfront

2 Balboa Park & San Diego Zoo

3 Sea World

4 San Diego Wild Animal Park

5 Lego Land

Military

6 NAS North Island/Coronado

7 32nd St. Naval Station

8 Miramar Air Station

9 Camp Pendleton

Research & Development

10 University of San Diego

11 San Diego State University

12 University of California San Diego

13 Salk Institute

14 Torrey Pines

15 Scripps Research Institute

16 Sanford Burnham Institute

17 California State University San Marcos

6 7

8

9

1

2 3

4

5

10 11

12 13 14 15

16

17


SAN DIEGO: FOUR MAJOR INDUSTRY SECTORS PROVIDE DIVERSITY

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INDUSTRY EMPLOYEES ECONOMIC IMPACT

Military 76,000 Military 14,000 Civilian $16.1 Billion

Life Sciences and Biotechnology 40,000 $9.2 Billion

High Tech and Communications 39,000 $16 Billion

Tourism 150,000 $18 Billion

SOURCE: SDMAC; San Diego Regional Economic Development Corporation


SAN DIEGO: CHALLENGES TO GROWTH ENVIRONMENT (LAND) AND FISCAL CONSTRAINTS

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➤  Existing Job Cores/Centers nearing capacity ➤  Constrained land availability (environmental protection)

  Limited greenfield sites for where future Centers will develop   New growth areas likely to be re-development

➤  Anti-growth sentiment ➤  Housing “un”-affordability

  Best jobs northside, attainable housing southside ➤  State of California fiscal and regulatory liabilities


PLANNING FOR NEW CENTERS ➧  Infill or Greenfield? Both.

  Infill often more attractive to communities •  More efficient use of transportation investments,

infrastructure

•  Reduce driving, environmental impacts, sometimes less costly to provide services

•  Placemaking, walkability, as catalyst

  Greenfield less costly to the developer •  Lower land costs •  Fewer financing barriers •  Less expensive infrastructure (e.g. less transit, open

parking) •  Responsive to consumer preferences for lower density

  Do “better greenfield”? •  More compact, walkable, centers and corridors,

connected

Stapleton, Denver

Mueller, Austin

METRO CORES: CREATING AND SUSTAINING THE PLACES WHERE JOBS GROW

Gregg Logan, Managing Director, January 25, 2011

RCLCO January 2011. All rights reserved, reproduction by permission only. ATLANTA │ AUSTIN │ LOS ANGELES │ ORLANDO │ WASHINGTON, DC

RCLCO specializes in real estate economics, strategic planning and management consulting, and advisory services for real estate investors and developers, public agencies, financial institutions, and non-profit organizations.

Economic Development Services   Metropolitan Growth Trends

Analysis- Employment Centers   Market and Feasibility Studies   Fiscal/Economic Impact Analysis   Economic Development and

Revitalization   Value Capture Forecasting/Transit-

Oriented Premium Analysis   Affordable/Workforce Housing   Public/Private Partnership

Structuring   Smart Code Review   Strategic Planning   Litigation Services

ABOUT RCLCO

creating the places where jobs grow

Documents

cores rclco

characteristics of cores

number of jobs rclco

cores o

number of cores source

hierarchy of cores

types of job cores

location of metro cores