San Fernando Valley Business Enhancement Survey

1. San Fernando Valley Business EnhancementSurvey Presented by Douglas H. Svensson, AICP Managing Principal, Applied Development Economics

2. About the Survey • 9,898 surveys sent. • 656 received and tabulated. • 35,500 employees, or about four percent of the total employment in the San Fernando Valley, represented in the survey.

3. Survey Sample and Respondents 0%

4. Survey Geography

5. Size of Firms

6. Years In Business Year Founded

7. Types of Organizations Represented

8. Strengths Identified In Survey • Growing economic base. • Strong indicators of private investment. • Good transportation access and visibility. • Quality labor force.

9. Strength 1: Growing Economic Base • 82 percent of the responding firms see their own industry in a growth period or stable. • More of the construction, finance and real estate, and transportation firms tend to see their industry as growing. • Entertainment, manufacturing, and wholesale firms tend to see their industry in a period of stability. • Only 14 percent of firms responding feel that their industry is in a downturn.

10. Strength 1: Significant Growth Factors • Overall health of the economy. • Health of the aerospace industry. • Other concerns include advances in technology, policies regarding trade agreements, population growth, and demographic changes.

11. Strength 1: Employment Growth • Nearly half of the firms expect to hire in the next two years. • Strongest expected growth is with financial and real estate firms, 60 percent of whom plan employment increases. • More than half of manufacturers and wholesalers expect employment growth in the next two years. • In the entertainment industry, about one-third expect employment growth.

12. Strength 2: Business Investment • Two-thirds of the respondents have invested in new facilities and equipment over the past three years. • About 51 percent of the respondents expect to make capital improvements over the next three years.

13. Strength 3: Locational Advantages • Centrality and access to transportation. • Visibility. • Access to customers. • Proximity to owner’s residence.

14. Strength 4: Quality Labor Force • About 78 percent of respondents report they can recruit the skilled labor force they need locally. • More than 70 percent of firms indicated that commute time and housing affordability and availability are not issues in attracting workers. • 75 percent of employees are reported to live in the area.

15. Strengths: Overall Assessment About 70 percent of responding firms would locate in the San Fernando Valley again if given the choice today. • Key issue: Customers, suppliers, and homes are local. • Other issues: Transportation, infrastructure, and economic opportunities.

16. Weaknesses Identified In Survey • Lack of building space for expansion. • Lack of parking. • Concerns about quality of life. • Low awareness of economic development programs and resources.

17. Weaknesses 1 and 2: Lack of Building Space and Parking

18. Weakness 3: Quality of Life • While perceptions of the valley’s image are generally positive, the region’s suburban character was cited as a limiting factor. • Other quality of life issues include the crime rate and traffic congestion. • The impact of these perceptions is on the interest of entrepreneurs locating their businesses and themselves in the valley.

19. Weakness 4: Awareness of EconomicDevelopment Organizations

20. Weaknesses: Overall Assessment About 30 percent of responding firms would not locate in the San Fernando Valley again if given the choice. Key issues include • Taxes. • Fees. • Permits. • Business climate. • Other issues include statewide regulations, workers compensation, and state income taxes.

21. Opportunities Identified In Survey • Employment growth and workforce training. • Expansion and relocation. • Business information and services network.

22. Opportunity 1: Training Needs

23. Opportunity 1: Sources UsedTo Hire Employees

24. Opportunity 2: Expansion and Relocation Nearly 40 percent of respondents plan expansion or relocation. • Most expansions and relocations are for larger spaces, accommodating new products, or moving specific activities. • Other reasons for expansions or relocations include reduced costs, and changing labor force.

25. Opportunity 2: Expansion and Relocation in the San Fernando Valley

26. Opportunity 3: Information Needs From Local Governments and Institutions Scale 1=not at all 2=somewhat important 3=important 4=very important 5=critical Importanttocritical

27. Opportunity 3: Requests for Information From Economic Development Organizations

28. Threats Identified In Survey • Economic downturn. • Traffic congestion. • Housing costs. • Lack of skilled workers. • Building space demands.

29. Threat 1: Economic Downturn • The first threat is that 14 percent of the firms see their industry in a downturn. Manufacturers lead this perception with 21 percent, followed by entertainment at 15 percent and financial, insurance, real estate firms at 11 percent. • Manufacturers with this view included • Aerospace and heavy manufacturing: 28% • Apparel: 33% • Hi-tech: 21% • Other manufacturing: 11%

30. Threat 2: Traffic Congestion • 28 percent see the commute as an adverse factor in recruiting employees. Only 20 percent of small firms said this, but 40 to 50 percent of firms ranging in size from 50 employees up to 1,000 said this is a problem. • There is some variation by city. About 40 percent of Glendale firms cited the commute as a problem, but only 22 percent of firms in Burbank. The other cities were all at or below the average of 28 percent.

31. Threat 3: Housing Costs • 21 percent of respondents see the lack of affordable housing as a deterrent. • This was true for 16 percent of small firms but 30 to 40 percent of firms between 100 and 1,000 employees. • There was much less variation by location for this question than for the commute issue. The responses ranged from 25 percent in Glendale who said housing issues affected their recruiting to 19 percent in Burbank.

32. Threat 4: Lack of Skilled Workers • 22 percent find of respondents find themselves unable to recruit skilled workers locally. • The industries that said this most often were apparel, construction and business services. • High-tech and aerospace industries were at 23 percent and 25 percent, respectively. • Only 11 percent of other manufacturing firms see the lack of skilled workers as a threat.

33. Threat 5: Building Space Demands • Half of the firms are leasing their space, which equals one-third of the total sample, will have their leases expire in 2002. For many, this is a key time to move if they are going to. • Overall, nearly one-quarter of firms who said their facility or production lines are currently at capacity would not relocate in SFV. • There was an overwhelming desire for more space from the respondents. The lack of space or the inability to expand their present facilities was the most often cited barrier to expansion. • Lack of parking ranked second and was also frequently cited among the overall disadvantages of the valley.

34. Conclusions The San Fernando Valley is in a period of significant opportunity for economic development. Many firms plan to grow, although some have concerns about their ability to find the space they need, and many are unaware of the resources available to them that can help their business expand. • City and regional business retention and expansion services need to move forward. • Expect continued demand for more building space, and services such as permit processing, zoning, and use adjustments. • Businesses are also interested in utility services and financing to support expansion plans. • Employment and training agencies can help businesses find qualified workers, provided that outreach efforts are made. • The San Fernando Valley economy is very healthy and needs room to grow.