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HomeMy WebLinkAbout07212010 PACAB Work Session PacketSeward Port &Commerce Advisory Board Work Session Economic Development Assessment Review Continued July 21, 2010 Council Chambers Noon Port and Commerce Advisory Board Work session July 21, 2010— Noon — Council Chambers Table of Contents Seward Economic Development Assessment ............................ Page 2 Questions and Ideas to frame discussion (from City Manager)........ Page 19 Notes from PACABS 6-16-10 Work session ............................ Page 21 Christi Bell Feed back ....................................................... Page 23 Laura Cloward Feed back ................................................... Page 29 Tourism & Special Event Grant Program ................................ Page 33 WhyBuy Locally Owned?.................................................................. Page 42 Marry Lowell Conference Center Feasibility Study ..................... Page 44 Seward Area Businesses by Category ..................................... Page 48 Seward Enhancement Association Market Profile, Hyett-Palma, INC. 1988................................. ............................ Page 49 Action Agenda, Seward Enhancement Association Market Profile, Hyett-Palma, Volume III, January 1, 1989 ............................... Page 102 SEWARD ECONOMIC DEVELOPMENT ASSESSMENT Prepared for the City of Seward May 2010 Seward Economic Development Assessment Report Executive Summary To fulfill its contract with the City of Seward, the Seward Chamber of Commerce engaged the TIP Strategies, Inc. (TIP) and the University of Alaska Center for Economic Development (UACED) to perform an assessment of Seward's economic development capabilities. The assessment was accomplished through (1) an analysis of economic and demographic data, (2) an online survey of Seward residents and business owners/managers, and (3) a site visit and interviews with various representatives from the Chamber, the City, and the local business community. The purpose of the assessment is to evaluate Seward's current economic development assets, processes, coordination, and expertise. Key Assessment Findings ■ The data analysis reveals some trends in relation to population, business formation, and employment that should be of concern to the community. Population growth and new business formation in Seward has been flat in recent years. The number of retail establishments has even declined over the past 10 years. In addition, some of the jobs in Seward with the oldest worker profiles are in key professions such as registered nurses, teachers, and general managers. • Twenty percent of the 58 business owners responding to the online survey indicate they plan to move or discontinue their business in 1-2 years. A high frequency of business respondents noted difficulty dealing with the City, unfriendly business climate, and difficulty dealing with the Harbor as reasons they planned to move or close their operations. Forty-two percent of businesses would not choose to start their business in Seward today. ■ Resident respondents were most likely to favor economic development policies and strategies that enhance the quality of life and provide better job opportunities. Business respondents were more likely to favor economic development policies and strategies that reduce regulation, increase the amount of land available, and increase support of local businesses. ■ It is the view of the consulting team that the Seward Chamber of Commerce is an effective economic development organization given its staffing levels and resources. This view was generally supported by business representatives interviewed as part of the assessment. • The team encountered no major impediments presented by City departments or staff to opening or operating a business in Seward. Suggestions for improving the responsiveness and customer friendliness to businesses included more consistent code enforcement across departments; better IT systems integration across departments; the creation of a simple guide for leasing City property; and the development of a single flow chart illustrating the permitting, licensing, and development process for City staff and businesses. • Business representatives interviewed reported new City leadership and staff in recent years has resulted in improved customer friendliness. Still, business owners expressed considerable frustration that City leadership does not "hear" the concerns of the business community. There is also a perception among businesses that City leadership lacks a private sector mentality. • Many business representatives questioned the commitment of City government to expanding private sector investment in Seward and diversifying the tax base. Many fear the prevalence of public sector investments in the City is shrinking the private sector tax base, which results in higher taxes and fees on existing businesses and their customers. TIP Strategies, Inc. & UACED 1 Seward Economic Development Assessment Report • Business representatives advocated for an ongoing forum between City leaders and the business community held outside of the City offices to discuss theses concerns. • It is not clear from either the City or Chamber websites the appropriate process for new investment prospects to initiate a business location inquiry. The City and Chamber should establish a formal protocol for prospect assistance, which is then clearly described online and in printed literature. Recommendations • The most important contributing factor to a successful economic development program is the involvement and support of the existing business community. As a consequence, the City and Chamber should involve the business community the community's economic development activities, including business retention, expansion, and recruitment. ■ The City and Chamber must jointly commit to more aggressively retaining, expanding, and attracting private investment. This likely will involve greater resources dedicated to economic development. It is the view of the consulting team that the Chamber is the proper organization to lead Seward's economic development efforts. However, before any resources are spent, a community -wide economic development strategic plan should be developed and put in place to guide resource allocation. • The community should organize economic development teams consisting of public officials, City and Chamber staff, and business representatives. These teams would be assembled for hosting new investment prospects and calling on outside companies. ■ The City should explore ways for offering an expedited permitting process for qualified new, expanding, or relocating businesses. Such a process would commit the City to streamlining and simplifying governmental permitting processes where possible. • The City of Seward and the Seward Chamber of Commerce should collaborate to expand the community's business retention and expansion program. TIP Strategies, Inc. & UACED 2 Seward Economic Development Assessment Report About the Economic Development Assessment To fulfill its contract to the City of Seward, the Seward Chamber of Commerce engaged the TIP Strategies, Inc. (TIP) and the University of Alaska Center for Economic Development (UACED) to perform an assessment of Seward's economic development capabilities. As part of the assessment, the consulting team evaluated Seward's current economic development assets, processes, coordination, and expertise. In addition, the team conducted a general assessment of the commitment to economic development among the local partners, including the Chamber, the City of Seward, local businesses, and other community organizations. The Chamber and the City will use the assessment as a basis for approaching how the community of Seward can better accomplish its economic development goals. Approach The assessment utilizes three approaches to gathering input and analysis. First, an analysis of various economic and demographic indicators provides a brief snapshot of Seward's economic strengths and weaknesses, revealing recent trends for indicators such as population, employment, and business creation. Second, the team administered an online survey of Seward residents and business owners/managers. The survey gauged perceptions regarding challenges and opportunities for living, working, and operating a business in Seward. Four groups were targeted and contrasted: 1) business owners, 2) general Seward residents, 3) senior citizens, and 4) high school seniors. Third, team members conducted a site visit and met with various representatives from the Chamber, the City, and the local business community to assess local economic development priorities, responsiveness, opportunities, challenges, and capabilities. TIP Strategies, Inc. & UACED 3 Seward Economic Development Assessment Report What We Learned TIP Strategies and UACED performed both quantitative and qualitative analyses as part of the economic development assessment. First, the team conducted an analysis of economic indicators for Seward. In addition, UACED carried out an online survey targeting Seward business owners, general residents, senior citizens, and high school seniors. The survey was designed to assess perceptions regarding challenges and opportunities for living, working, and operating a business in Seward. Finally, team members from TIP and UACED travelled to Seward to interview public officials and local business owners regarding economic development issues and opportunities. The section below summarizes key findings from each analytical component. Economic Trends TIP analyzed various economic and demographic indicators for Seward to form a brief snapshot of the community's economic strengths and weaknesses. While not comprehensive, the analysis does shed some light on recent trends for indicators such as population, employment, and business creation. Population Figure 1 below illustrates Seward's population growth between 1990 and 2008. It includes official U.S. Census Bureau counts (brown bars), intercensal estimates (blue bars), and Alaska Department of Labor and Workforce estimates (brown line). The graph shows the Census Bureau significantly overestimated Seward's population growth in the 1990s. By 1999, the Census Bureau estimated Seward had 3,315 residents. However, the actual Census count in 2000 revealed only 2,813 residents. Consequently, Census Bureau estimates since 2000 have been less aggressive. The latest population estimate for mid -year 2008 is just over 3,100, giving Seward an overall population increase of about 10 percent since 2000. While the U.S. Census Bureau has tempered its post-2000 population growth estimates for Seward, the Alaska Department of Labor and Workforce Development (ADLWD) has been even less optimistic. ADLWD estimates show Seward's population declining from 2,830 in 2000 to 2,619 in 2008. If correct, these estimates mean Seward's current population is about the same or less than it was at the time of the 1990 Census, nearly 20 years ago. TIP Strategies, Inc. & UACED 4 Student enrollment data are also accurate indicators of overall population trends. Data collected by the US Department of Education's statistical unit counting all U.S. schoolteachers and students by Zip code indicate an enrollment pattern consistent with ADLWD population estimates. According to Figure 2, between 1995 and 2000 the number of primary and secondary school students in the 99664 Zip code peaks and then begins leveling off. From 2001 to 2006, the number of students steadily declines. In Seward Economic Development Assessment Report Figure 2: Students and Teachers Counted in 99664,1990-2006 Total 1000 1.00 Total number of primary & number of secondary 900 90 teachers (line) school students _ S00 -' - (columns) , -t. -: - - - - - - - - - - - - 80 a 700 - - - - - - - -- -- 70 600 60 Soo t , � kx 50 400 40 300 - - - - - -1 30 zoo - - - - - zo _ 100 l.o 0 0 1990 199119921993199419951996199719981999200020012002 2003 200420052006 SOURCE: U.S. DepatmentofEducation, National Center for Educational Statistrs(NCES)(via Moody'sAnv6fics) NOTE: Data represent total counts within 99664 ZlP Code. fact, Seward's student population fell from a high of 896 in 1995 to a 17-year low of 649 in 2006. Reflecting the overall decline in student enrollment, the number of local teachers also remained flat or declined since 1996. Economy As shown in Figure 3, between 1998 and 2007 net business formation in Seward remained relatively flat. During this period, the private -sector economy within Zip code 99664 added just nine new business establishments. However. Figure 3: Private -Sector Economy' within 99664,1998-2007 Number 195 1,300 Number of private o, sector 180 M - - - - - - - 1,200 establish- RM jobsvred mentc 165 j•' '?)' I,� (col . umns) 'M .,1.(line) ]00 4kl 150 - �tE - - - 1,000 135 -+ - } - -- - 900 i��.. 120 800 105 - t, - - - - - - 700 t• 90p 600 y ? 60 y - - - - - 400 45 s 300 ` E E 30 - € t 'a, - - 200 3,• t 15 p 3,. Baas T" 100 `, F. a o 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 SOURCE: U.S. Census Bureau, Zip Code Business Patterns Based on covered employment, wAth t)pxally exckides government workers and the self-employed. TIP Strategies, Inc. & UACED private sector employment gained almost 200 new jobs. This means the average number of workers employed at Seward businesses increased over the period. In 1998, local businesses employed an average of 6.1 workers. By 2007, this figure had risen to 6.8 workers. In addition, the total private - sector payroll (unadjusted for inflation) nearly doubled from $27.2 million in 1998 to $50.6 million in 2007. Figure 4 below displays the number of private sector establishments in zip code 99664 by industry sector. Accommodation & food services is the largest category of business establishments in Seward. As of 2007, 40 businesses operating in this sector had a 99664 address. A decade ago, retail establishments rivaled motels, restaurants, and bars for the most important sector of the local economy, but over the past 10 years, the number of retail outlets Seward Economic Development Assessment Report Figure 4: Private -Sector Business Establishments within 99664,1998.2007 Number 45 of private sector establish- 40 ._...Accommodation & food ments by Industry services sector35 ------------------ Transportation & warehousing 30 Retail trade 25 Personal & other services 20 ----------------------------- ---- -Health care & social r.:„ .> assistance* —Construction 10 —Professional services 5 —Manufacturing 0 has declined from 32 to 21. Retail trade now ranks third in the number of local establishments behind transportation & warehousing. The number of transportation & warehousing businesses spiked between 2003 and 2005, but fell sharply in 2006 and 2007. The sectors registering establishment growth in the last two years of available data include healthcare, personal services, and professional services. Figure 5 illustrates the relatively small size of most businesses in Seward. Two of every three businesses (68 percent) have fewer than five employees. Just 6 percent of the business establishments employ 20 or more workers. Figure 5: Size of Business Establishments within 99664, 2007 2049 50-99 100+ Size category Number of businesses 0-4 employees 127 5-9 30 10-19 18 20-49 5 50-99 4 100+ 2 All establishments 186 SOURCE: US Bureau of the Census, Zip Code Business Patterns 2007 (latest available) TIP Strategies, Inc. & UACED IV Seward Economic Development Assessment Report The composition of the local workforce by age is also an important economic development consideration. If workers in key occupations are older, will there be enough new workers to replace them? Do the jobs currently filled by younger workers offer the potential for further professional and technical development? Figure 6 indicates some of the jobs in Seward with the oldest worker profiles are in key professions such as registered nurses, teachers, and general managers. More than two-thirds of Seward's workers in these three occupations are over the age of 45. For managers, this age profile is intuitive since this is an occupation that a worker advances into over time. The age profile for teachers and registered nurses, however, should include a higher percentage of younger workers. Having such a large percentage of teachers and nurses over the age of 45 represents a red flag for potential future labor shortages in key occupations. Figure 6: Occupational Composition` of Seward's Workforce by Age Occupations Number Age Breakout: Under 45 (%) 45 or older (%) Janitors & Cleaners 11 18 82 ► Teachers & Instructors, All Other 25 20 80 ► Registered Nurses 17 29 71 ► Managers, All Other 10 30 70 ► General & Operations Managers 16 NNE 31 69 Retail Salespersons 24 ' 38 63 Healthcare Support Workers, All Other 13 38 62 Correctional Officers & Jailers 50 40 60 Customer Service Representatives 14 43 57 Bookkeeping, Accounting, & Auditing Clerks 25 44 56 Teacher Assistants 11 45 55 Office & Administrative Support Workers 24 46 54 Office Clerks, General 17 47 53 Personal & Home Care Aides 10 50 50 Meat, Poultry, & Fish Cutters & Trimmers 12 50 50 Executive Secretaries & Admin Assts 17 53 47 Hotel, Motel, & Resort Desk Clerks 18 56 44 Captains, Mates, & Pilots of Water Vessels 25 56 44 Maintenance & Repair Workers, General 10 60 40 Electricians 10 60 40 Bartenders 13 62 38 Laborers & Freight, Stock, & Material Movers 21 62 38 Cashiers 43 63 37 Food Preparation Workers 19 68 32 Waiters & Waitresses 29 72 28 Sailors & Marine Oilers 22 73 27 Cooks, Restaurant 17 76 24 Dishwashers 10 80 20 Maids & Housekeeping Cleaners 11 82 18 Construction Laborers 14 86 14 SOURCE: Alaska Department of Labor and Workforce Development Includes the 30 occupations in Seward that employ at least 10 workers TIP Strategies, Inc. & UACED 7 Seward Economic Development Assessment Report Survey Results UACED administered an online survey of Seward residents and business owners/managers through Zoomerang between February 20 and March 28, 2010. The survey was intended to assess perceptions regarding challenges and opportunities for living, working, and operating a business in Seward. The survey targeted and contrasted the following four groups: 1) business owners, 2) general Seward residents, 3) senior citizens, and 4) high school seniors. Questions were designed to gauge business owners' perceptions on issues of workforce, land and property, services provided to businesses, and operating a business in Seward. Questions also were designed for residents to access purchasing habits, identify potential businesses opportunities, and gather perceptions of Seward's strengths and limitations. The Seward Chamber of Commerce communicated the opportunity to participate in the survey through multiple ads in the Seward City News, announcements at Chamber meetings, through the weekly Chamber newsletter, and direct communication with the high school and senior center. Of the 110 surveys completed, input was received from the following: business owners (58), residents (19), senior citizens (12), and 2010 high school seniors (21). Business Surrey Summary Key findings of the business owners/managers survey are highlighted below: • Most respondents are small businesses with three or fewer employees. About one-third have lived in Seward 25 years or more. Almost 50 percent of respondents have been in business 7-24 years; 21 percent have been in business 25 years or more years. ■ Businesses responding represent a minimum of 295 jobs in Seward. ■ About one-third of businesses expect revenue to decrease this year; 41 percent expect it to stay the same; and 25 percent expect revenue to increase. ■ Business respondents indicate that regulatory practices, economic issues, and lack of a well - trained labor force have a negative effect on businesses in Seward. One -fifth plan to move or discontinue their business in 1-2 years; half of these noted difficulty obtaining permits to operate or expand. A high frequency of respondents noted difficulty dealing with the City, unfriendly business climate, and difficulty dealing with the Harbor as reasons they planned to move or close their operations (see box). 0 When asked about hiring issues, 46 percent of respondents expressed difficulty finding skilled employees. Twenty-nine percent reported difficulty hiring laborers, managers, and part-time employees, respectively. Thirty-eight percent of the businesses hire employees 18 years or younger. TIP Strategies, Inc. & UACED 8 Seward Economic Development Assessment Report ■ About two-thirds of respondents indicated lack of satisfaction with the City Council (elected); 66 percent reported a lack of satisfaction with the City of Seward (Administration). Approximately three-quarters of business respondents were satisfied or very satisfied with the Seward Chamber and 70 percent were satisfied with the Alaska Vocational Technical Center (AVTEC). ■ Respondents were asked to rate Seward as a place to do business. Over 50 percent rated Seward weak or somewhat weak in the following areas: access to affordable financing, affordable utilities, affordable housing, simplified permitting and local regulations, active downtown core and land use planning. Business respondents indicated that quality of life (e.g., cleanliness, safety, and recreational opportunities) has positive effects on Seward as a place to do business. Over 50 percent rated Seward's quality of life as somewhat strong or very strong. • Business respondents suggested increased collaboration with other businesses for marketing Seward as a tourist destination, making a case for state support, and encouraging development of a downtown core. • Increasing awareness of resources available to local businesses and better responsiveness to Seward business concerns by City staff and the Council were the most important items for improving Seward as a place to do business. • Forty-two percent of businesses would not choose to start their business in Seward today. • The top sources of information used by businesses include the Seward City News, the Seward Chamber of Commerce website, and the City of Seward website. Resident Survey Summary Key findings of the survey of Seward residents are highlighted below. Differences between general resident, senior citizens, and high school seniors are noted where applicable. • The majority of resident respondents have lived in Seward more than four years. Almost a quarter of both general residents and senior citizens have lived in Seward 25 or more years. Fifty-seven percent of high school seniors have lived in Seward more than 15 years. • Survey respondents indicated the following were the most important items in defining the character of Seward: locally owned businesses, outdoor recreational opportunities, and community events. • All residents make the majority of their purchases outside of Seward. Products most frequently purchased outside of Seward by senior citizens include clothing, home furnishings, and appliances. High school seniors are most likely to purchase clothing, electronics and computers outside of Seward. General residents are more likely to purchase electronics, computers, home furnishings, and appliances. Non -high school respondents reported purchasing most groceries outside of Seward. • Survey respondents purchase a majority of fishing supplies, auto parts and services, and hardware and lumber locally. Respondents also patronize local restaurants. • When asked what most influenced respondents' purchases made outside of Seward, product pricing was the reason given by all. Availability and selection were the second most influential reason given. • All resident respondents rated Seward as a place to raise children as "very good," a place to retire as "good", a place to work as "good" and safety of residents as "very good." TIP Strategies, Inc. & UACED 9 Seward Economic Development Assessment Report ■ Respondents were asked to rate their level of agreement with statements describing Seward as "strongly agree," "agree," "neutral," "disagree," or "strongly disagree." All residents agree that Seward is a clean city, has good air and water quality, and has accessible health care. All respondents "strongly agree" that Seward has a sense of community. None of those responding agree that living is Seward is affordable. ■ All respondents use the Seward City News as their major source for community issues, services, and programs. Economic Development Implications from Surveys Respondents perceive significant barriers to economic development in Seward: regulations, permitting, and a lack of focus and support for economic development by government. Residents perceive governmental attitudes and lack of coordinated economic development activities as further barriers to economic development. Resident respondents were most likely to favor economic development policies and strategies that enhance the quality of life and provide better job opportunities. Business respondents were more likely to favor economic development policies and strategies that reduce regulation, increase the amount of land available, and increase support of local businesses. An important — but often overlooked — and effective aspect of economic development is assisting existing small businesses to succeed and making the business climate friendly to expansion. Site Visits and Intelrviews Representatives from TIP and UACED traveled to Seward on February 17-18, 2010, to conduct a site visit and meet with various representatives from the Chamber, the City, and the local business community. The consulting team toured the community and visited each of Seward's primary economic development sites and assets. In addition, the team met individually with Chamber staff as well as various City leaders and departments to assess local economic development priorities, responsiveness, and capabilities. Finally, the team spoke with representatives of the local business community individually and in a focus group format to discuss the primary challenges and strengths to doing business in Seward. A summary of the team's key findings is presented below. Chamber of Commerce It is the view of the consulting team that the Seward Chamber of Commerce is an effective economic development organization given its staffing levels and resources. The Chamber is led and staffed by an experienced and capable team. The three main areas of focus for the Chamber include membership services and development; visitor and tourism promotion; and business retention, expansion, and attraction activities. The executive director is knowledgeable about the issues affecting Seward's business community as well as the practice of economic development. Nearly every business representative expressed the view that the Chamber is a strong advocate for local business issues and effectively markets Seward to visitors and businesses with the resources at its disposal. City of Seward In order to assess the economic development views, capabilities, and responsiveness of the City of Seward the consulting team interviewed the mayor, city manager, and several department managers and staff, including the electric utility, city clerk's office, fire chief, building and engineering, harbor master, and community development department. A summary of the key findings is presented below. • Overall, the consulting team encountered no major impediments presented by City departments or staff to opening or operating a business in Seward. Each person interviewed seemed professional and open to helping businesses succeed in Seward. TIP Strategies, Inc. & UACED 10 Seward Economic Development Assessment Report • Some managers reported a lack of consistent enforcement of codes and regulations across departments. This has been attributed to departments being located in different facilities and some codes not being aligned. One suggestion is for the City to develop a single flow chart illustrating the permitting, licensing, and development process for City staff and businesses. • Improvements and upgrades to the City's information technology system would help in faster processing of licenses and tax forms. The clerk's office does have a program that would speed up the process; however, they report not having the staff time needed to implement it. It was also suggested that an IT system better integrated across departments would improve the process. • The weekly meeting of department managers to discuss projects is seen as a valuable tool for staying on top of developments that impact multiple departments. ■ It was reported both inside and outside the City that the process for leasing City property and space, including boat slips, is confusing and takes too long. One suggestion is for the City to produce a simple guide to leasing property. Business Interviews The consulting team interviewed a number of local businesses individually and in a focus group format. Below is a summary of the key findings. • Many businesses reported that, historically, the City of Seward has not been business friendly. However, in recent years new leadership and staff resulted in improved customer friendliness. • Considerable frustration was expressed that City leadership does not "hear" the concerns of the business community. There is a perception that City leadership lacks a private sector mentality. • Many questioned the commitment of City government to expanding private sector investment in Seward and diversifying the tax base. They point to the fact that most of City's large economic development assets and significant investment involves the public sector, resulting in a declining private tax base. Because Seward is relatively land -locked, less land is available for private ownership and development. Many fear this is not a sustainable model for long-term economic vitality in Seward. ■ The shrinking private tax base has resulted in higher taxes and fees on existing businesses and their customers. ■ Several commented that the City actually competes with the private sector and cited examples of the boat harbor, the Seward Marine Industrial Complex, and the Seward Resort. The City should evaluate privatizing its primary economic development assets where it can. ■ There needs to be an ongoing forum between City leaders and the business community held outside of the City offices. The positives aspects about living and working in Seward are too great that the local economy should suffer due to a lack of direct communication between the City and businesses. TIP Strategies, Inc. & UACED 11 Seward Economic Development Assessment Report Web Profile Websites for the City of Seward and the Seward Chamber of Commerce are both professional, attractive sites. However, each is lacking key components critical for prospective investors and site selectors. The adjacent text box provides information on fundamental pieces economic development websites should include. For example, the City and Chamber websites should link to a downloadable and printable community profile containing standard information site selectors require. Information on the business and investment climate in Seward should also be offered in a more downloadable and printable format. The sites also lack lists or links to available buildings/properties and key economic development assets. The Anchorage Economic Development Corporation's (AEDC) Anchorage Prospector site does list commercial, retail, and industrial sites/buildings for sale or lease in Seward; however, neither the Chamber nor the City provide a link to the site. Moreover, it is not clear from either the City or Chamber site the appropriate process for prospects to initiate a business location inquiry. For instance, the Chamber site identifies the Community Development Department as "a great first stop for any business seeking to relocate to Seward." However, the City site encourages businesses to "utilize the Seward Chamber of Commerce to help initiate business opportunities in the city." The City and Chamber should establish a formal protocol for prospect assistance, which is then clearly described online and in printed literature. TIP Strategies, Inc. & UACED 12 Seward Economic Development Assessment Report Recommendations Based on the information gathered during the assessment, the consulting team is prepared to make the following recommendations as to how Seward can more effectively accomplish its economic development goals. Involve the Existing Business Community Perhaps the most important contributing factor to a successful economic development program is the involvement and support of the existing business community. The best led and funded programs will not succeed over the long term if local businesses do not actively participate and contribute to economic development efforts. This involvement includes fundraising, participating in business roundtables, meeting with other local businesses, hosting new investment prospects, and attending prospect call trips to other cities. There are obvious reasons for involving local businesses. First, the core element of any economic development program is business retention and expansion (BRE). Taking care of existing businesses should always be the priority. If those businesses do not perceive any value from, or have trust in local BRIE efforts, they are less prone to support other economic development activities such as workforce development, marketing, and business recruitment. They are also less likely to be anchored in the community and more likely to relocate. In terms of attracting new employers, existing businesses are in a position to make the strongest case for investing in Seward. It is one thing to hear from public officials why Seward is the best place to invest and prosper, it is quite another to hear it from business leaders who are actually there. Moreover, involving local businesses in recruitment and attraction activities will demonstrate to prospects that the City and business community are partners. This, in turn, will enhance their confidence in investment climate of Seward. Recommit to Expanding the Private Sector Economic Base As mentioned above, several Seward business people questioned the commitment of City government to expanding private sector investment in Seward. They point to the fact that most of city's large economic development assets and significant investments involve the public sector. This has resulted in a declining private tax base and thus a heavier direct and indirect tax burden on existing businesses. Because Seward is relatively land -locked, less land is available for private ownership and development. Many fear that this is not a sustainable model for long-term economic vitality in Seward. To address this trend, the City and Chamber must jointly commit to more aggressively retaining, expanding, and attracting private investment. This likely will involve greater resources dedicated to economic development. It is the view of the consulting team that the Chamber is the proper organization to lead Seward's economic development efforts. However, before any resources are spent, a community -wide economic development strategic plan should be developed and put in place to guide how resource allocation. Organize Economic Development Teams A key step in positioning Seward for attracting new investment is organizing local leaders and experts to host and call on new investment prospects. Business attraction is a highly competitive pursuit, especially in the current economic environment. Having a well -prepared and enthusiastic team of local leaders and business representatives able to make the case why Seward is the best destination for new or expanded private investment is a standard and effective business attraction strategy. TIP Strategies, Inc. & UACED 13 Seward Economic Development Assessment Report Hosting Prospects In setting up the itinerary for the site visit, TIP requested a first meeting with Seward's prospect visit team. A prospect visit team serves as community representatives for hosting new location prospects and usually consists of important public, economic development, and business officials. TIP's reason for requesting an initial meeting with such a team in Seward was to simulate the sales pitch and information a team generally provides to an investment prospect. However, TIP was informed that a formal prospect visit team does not exist in Seward. The consulting team recommends that the City and Chamber assemble a prospect visit team consisting of Chamber staff, elected and appointed City officials, and representatives of the business community. The purpose of a prospect visit team is to have a pre - assembled group of community representatives who can provide comprehensive answers to a prospect's questions regarding why Seward is the best location for their business. A group of Seward officials and businesses already travels to Seattle to visit with large companies doing business in Seward. This practice should be continued and expanded to call upon prospective businesses as well. Offer Expedited Permitting The City of Seward should explore adopting an expedited permitting process for qualified new, expanding, or relocating businesses. Such a process would commit the City to streamlining and simplifying governmental permitting processes where possible. Such an incentive offers a business -friendly environment allowing companies to locate and expand in the community rapidly and efficiently. ■ Develop a baseline. A comparison of Seward's development review and permitting process with peer and competitor communities is an important fist step. If no such baseline comparison already exists, then TIP Strategies, Inc. & UACED 14 Seward Economic Development Assessment Report the City should begin tracking the review time for different categories of permitting (i.e., residential/commercial and infill/greenfield development). At the same time, the Chamber should gather information from the benchmarks and begin comparing this data with Seward's. • Establish a 'One -Stop Shop." Many communities have benefited from a single location for permitting and development review. Instead of having various departments (from the fire marshal to the public works director) at various locations, a single stop helps expedite development and reduces bureaucracy, creating a more business friendly environment. In Seward a one -stop should would require a reorganization of staff and facilities. ■ Set clear standards and follow them. Developers require a level of certainty. To help achieve this goal, the City of Seward should ensure that current policies and codes are logical, clearly written, and enforceable. • Craft a development -related incentive policy. To encourage innovative and responsible development, the City of Seward should establish specific criteria regarding design standards, employment and wage targets, and other community goals that would trigger incentives for desirable projects. Examples of incentives would include a streamlined or "fast -track" review and approval process, waivers or reduction of the project's development -related fees, or in some cases, tax abatements or credits. Expand Business Retention and Expansion Program The City of Seward and the Seward Chamber of Commerce should collaborate to expand the community's business retention and expansion program. Successful, stable businesses form the foundation of a community's economy. When existing businesses thrive, so does the community. The U.S. Chamber of Commerce estimates that 40 percent to 80 percent of all new jobs are created by existing firms. Prosperous, competitive businesses are more likely to remain and expand in the community and, thus, provide the best opportunity to expand a community's tax base. Yet, existing firms can also pose the greatest economic threat to a community, should they close or relocate. Thus, a formal business retention and expansion (BRE) strategy should lie at the heart of any economic development program. Indeed, surveys of economic development organizations across the United States rank BRIE as the number one economic development activity. A BRE program can identify the concerns and barriers to survival and growth that local businesses face, particularly during difficult times. A formal BRE program also demonstrates support for existing firms. Such support is crucial, as established businesses often get overlooked in a community's enthusiasm to recruit new headline -generating businesses. Yet, keeping existing companies happy and successful can help with business attraction, as firms considering moving will often talk to existing firms in the community. Below are common BRE activities the Chamber and City should consider adopting if not already in practice. ■ Develop and maintain a comprehensive inventory of existing businesses and available properties. Use publicly available business records, such as tax records, utility hookups, and ownership transfers as good sources of information to maintain an up-to-date inventory of existing businesses and available property. • Call on existing businesses — including all major employers — to gauge the ability and needs of local businesses to operate successfully and possibly expand in the community. TIP Strategies, Inc. & UACED 15 Seward Economic Development Assessment Report ■ Consider including City, Chamber, business, and elected officials in visits to existing businesses. ■ Host regular business roundtables to give local businesses the opportunity to meet face-to-face with economic and community development staff and to stimulate discussion. • Establish incentive policies (such as fast -track permitting) that can apply to the expansion of existing businesses and are not directed solely at the recruitment of new industries. • Raise awareness of available technical and financial assistance programs, including workforce development and incentive opportunities. • Consider establishing a formal internship/apprenticeship program to aid in the transfer of vocational students to entry-level positions among existing local employers and/or targeted sectors. The presence of AVTECH in Seward should provide a wealth of talent to fill apprenticeship positions. • Ensure that adequate networking opportunities for local business owners exist. This should include the opportunity to discuss issues on a topical basis (e.g., workforce, supplier networks, and local taxes and fees). • Conduct a regular employer survey as a means for keeping in touch with local businesses and documenting specific needs or concerns. Conduct personal interviews for key regional employers. • Review development regulations, ordinances, and approval processes to ensure that the City is responsive to the small business community. ■ Create a small business ombudsman position to serve as the primary point of contact for new and small businesses in the area, as well as to act as a liaison between the business community and relevant government departments and commissions. ■ Work with the financial community and other economic development groups to improve access to capital, a critical factor in small business and entrepreneurial development. ■ Promote existing small business programs and services. This includes working with area small business development centers and other relevant organizations to ensure that they market their services to local businesses and entrepreneurial ventures. ■ Develop a "rapid response" strategy for dealing with potential layoffs or closures. TIP Strategies, Inc. & UACED 16 Christv Ter From: Phillip Oates Sent: Friday, May 28, 2010 9:38 AM To: 'Christi Bell' Cc: 'alex@tipstrategies.com'; Christy Terry; John Bird; Kris Erchinger; 'rlms@ptialaska.net'; 'Laura Cloward'; 'Vanta Shafer; wilnbev@ak.net; Suzi Towsley Subject: Economic Development Meeting in Seward Christi, This message contains a list of questions and topics to frame discussion at our Ecoomic Development Meeting in Seward on Tuesday, 1 June at 1 PM. Please feel free to add to, or subtract from, this list as you feel appropriate. 1. What are the best specific incentives for a development -related incentive policy? 2. Should the city give the first 2 years of a lease at no cost to encourage the establishment of new businesses? 3. What specific actions by the City would encourage economic growth or the establishment of new businesses? 4. Would a campaign of "spending 10% more of disposable income in Seward" make a positive economic impact in the community? Are there other actions that would encourage an increase in local shopping by residents? 5. What types of new businesses should we target for Seward? 6. What policies and incentives encourage small entrepreneurial businesses? 7. Is it economically beneficial and legal to provide business discounts to local residents? 8. Is a seasonal sales tax a good approach for encouraging local economic activity and keeping businesses open in the winter months? 9. Would utility subsidies in the winter be helpful in keeping businesses open? 10. What other incentives could the City offer to keep more businesses open or successful during the winter months? 11. Which is consistently more successful for expanding the economy, growth of existing businesses or attracting new businesses? 12. Do you have an example of a City Website that has proven successful for achieving economic growth in a community? 13. What specific public policies encourage or discourage economic growth in a community? 14. Should we focus John Bird's efforts on a Business Retention and Expansion Program (John is a retired Army colonel and summer employee who has produced the City Efficiency Study and the City Enterprise Fund Study)? 15. Increasing awareness of resources available to local businesses and better responsiveness to Seward business concerns by City staff and the Council were the most important items for improving Seward as a place to do business- what are some methods we can immediately put in place to address these issues? 1 16. Do you know of the APEX program? Do you see this as a successful certification model for local governments to promote economic development? 17. How much would it cost for UACED or other facilitator to help the City develop an economic development plan? 18. Should we implement a "loan" through the Electric Utility for businesses that need to upgrade their equipment to more energy efficient appliances (the loan could be repaid over time through the utility bill)? 19. How do we streamline lease procedures? (The length of time is driven by survey and platting requirements for new lease sites but the timeline is much less for a new lease of an existing lease site.) 20. Do you know of building codes from other cities that may allow older buildings to be renovated without excessive cost to business owners? 21. How would we best market our safe, lovely, and community friendly community to businesses? 22. Should we establish and advertise for a voluntary ombudsman position? See you on Tuesday... Phillip Oates City Manager 907-224-4012 2 List of questions and topics to frame discussion of the economic Development Assessment- by Phillip Oates Interweaved notes from the Port and Commerce Advisory Board work session 6-16-10 1. What are the best specific incentives for a development -related incentive policy? A preferential policy change could be perceived to negatively affect existing businesses. Internal City streamlining should be done to the steps for starting a business including expediting the permitting process and consolidating services. Also noted that there are existing incentives for businesses that improve aesthetically or make historical improvements to their structures, however these are not widely used or publicized within the community? 2. Should the city give the first 2 years of a lease at no cost to encourage the establishment of new businesses? This type of motivation could be more easily and fairly achieved with a preferential rite of renewal on the end of a lease, and review of lease terms and flexibility around taxable property on the leased property. This problem, of having improved on property that's leased and that lease could run out and not be renewed ends up affecting the resale value of businesses as well. 3. What specific actions by the City would encourage economic growth or the establishment of new businesses? Establish a `Green" Business program and incentives- Open the electrical grid- Start net metering - Make the downtown business corridor more walk friendly with connected awnings and better sidewalk maintenance. 4. Would a campaign of "spending 10% more of disposable income in Seward" make a positive economic impact in the community? Are there other actions that would encourage an increase in local shopping by residents? PACAB members do not believe that this is a City Government task. Private industry should begin and organize any efforts like this. 5. What types of new businesses should we target for Seward? The ones that want to be here- year round businesses -businesses that make a good product- businesses that can be run with no overheads, often from home or anywhere, in the technical or computer fields, that aren't necessarily location dependent- Ideas like the mountain tram presented by Chris Nyman to PACAB last month, were praised for being new, innovative and creative with a lot of potential for the business and the community. 6. What policies and incentives encourage small entrepreneurial businesses? PACAB voiced strong support for an ombudsman position within the city, paid to coordinate and follow up with business owners, working closely with the chamber and all involved city departments to help facilitate a private business/industry friendly atmosphere, and streamline sometimes cumbersome process. 7. Is it economically beneficial and legal to provide business discounts to local residents? Yes and yes 8. Is a seasonal sales tax a good approach for encouraging local economic activity and keeping businesses open in the winter months? Maybe, some members worry that this may leave a `bad taste in eth mouth' of visitors; others felt that visitors will pay what is needed to visit. This could also create a marketing opportunity for neighboring/ competitive communities that don't have a seasonal sales tax. ie "come to homer, we have most of what Seward does and no seasonal sales tax". 9. Would utility subsidies in the winter be helpful in keeping businesses open? Yes, but how will the city plan to make up for the loss in revenue? Perhaps better coordination with exiting state programs that encourage energy efficiency would address this some. — not reinventing the wheel here. 10. What other incentives could the City offer to keep more businesses open or successful during the winter months? Better communication of existing programs, less perceived competition between private and public sector, even if it's just a perception it is damaging. 11. Which is consistently more successful for expanding the economy, growth of existing businesses or attracting new businesses? Both and sustainability. 12. Do you have an example of a City Website that has proven successful for achieving economic growth in a community? Kodiak seems to be very successful at what they are doing.... And has a lot of similarities to Seward. 13. What specific public policies encourage or discourage economic growth in a community? Seward area businesses need to be careful to not give off a sense of entitlement but rather foster a business friendly attitude, and great place to live works and do a variety of business. In thinking through responses to these questions my overriding recommendation is to develop a business retention and expansion (BRE) program specifically for Seward and to focus initial efforts on encouraging local businesses to remain in Seward and grow. Following is my effort to address the various questions raised at the end of our recent work with the City of Seward. I've changed the order of the questions a bit as they seemed to fall into some common categories. Incentive Related Questions 1. What are the best specific incentives for a development -related incentive policy? 2. Should the city give the first 2 years of a lease at no cost to encourage the establishment of new businesses? 3. What specific actions by the City would encourage economic growth or the establishment of new businesses? 4. What other incentives could the City offer to keep more businesses open or successful during the winter months? These questions seemed to be best served with a general rather than a more specific answer to each: First and foremost, it is important to remember that business owners are making business decisions about their businesses economic viability. The best incentives are the ones that the business owner(s) you are working with asks for or expresses that they need based on their unique business situation. The City should think through what incentives it is comfortable offering and have a "tool box" of options. Not unlike any other consideration being given in a negotiation that City needs to first fully understand benefits received in exchange for the incentive (i.e. job creation and tax base) to determine if a win -win exists. And then the City needs to determine if the incentive is the deal maker or is it artificially supporting a non -viable business. There are many factors that will influence a business decision to stay or move to Seward, primary factors typically include: market, labor, site, cost of doing business, regulatory environment, and quality of life. The more that the City knows about the businesses it wants to retain or recruit and how these factors influence their success or failure the more the City can become a partner in supporting the business owners. The City needs to become fully informed about the industries and businesses that it would like to see in Seward and then create incentives or a business climate that is conducive to supporting those types of businesses. In many cases supporting existing businesses in a community is more about factors such as: industry knowledge, local firm knowledge, professional services, and the City being the bridge to information and a "can do" attitude than an offering of incentives. 1IPage The overriding action that the City can take is to develop a working relationship with current Seward based businesses - to evaluate the local business climate through written surveys, focus groups and personal one-on-one business site visits and listen to what is being shared. Determine which businesses are at risk of failure and/or leaving and try to understand why. The development of working relationships is often what influences a business to stay and be a strong advocate for businesses that are being recruited to the area. Retention Related Questions 5. Would a campaign of "spending 10% more of disposable income in Seward" make a positive economic impact in the community? Are there other actions that would encourage an increase in local shopping by residents? Any time that local residents spend locally it is good for a community economically. A huge challenge is being accurately measuring the impact and definitively knowing what economic impact resulted from the action. The City may be the one that needs to set a strong example - are city supplies all purchased locally? Do City leaders purchase the majority of home supplies locally? If not, what would need to happen to change this? As an alternative, could high school kids take this on as a project? Students could both develop a plan for marketing the awareness of purchasing locally and research and develop the tools to measure the ultimate impacts? 6. Is a seasonal sales tax a good approach for encouraging local economic activity and keeping businesses open in the winter months? Can the City afford a seasonal sales tax? At what cost(s)? Have your local businesses claimed that taxes are what is driving away business? Have local residents stated that local taxes cause them to shop elsewhere? In all likelihood increased costs per product associated with transportation and low quantity purchases due to small population and purchasing history have more to do with costs of local products being high than seasonal taxes. 7. Would utility subsidies in the winter be helpful in keeping businesses open? Have local businesses asked for utility subsidies? Can the city afford utility subsidies in the winter? At what cost(s)? B. Increasing awareness of resources available to local businesses and better responsiveness to Seward business concerns by City staff and the Council were the most important items for improving Seward as a place to do business- what are some methods we can immediately put in place to address these issues? 21Page Many possibilities exist and again it may come down to asking this question of local business owners, some ideas include: • Train city staff and council so everyone is aware of available resources and is closely collaborating so that there is "no wrong door" when a business approaches the city. • Having a clear and easily managed website so businesses have access to information 24/7. • Do you know how businesses feel about the City's responsiveness? Perhaps surveying businesses regularly with some consistent metrics will allow you to know if you've achieved this aspiration. • Ensure local businesses know about other resources beyond the city - one example is AK Sourcelink - http://www.aksourcelink.com/ I often find that groups around Alaska are trying to create systems for providing all answers locally. Sometimes it is about the best referral to another organization. 9. Should we implement a "loan " through the Electric Utility for businesses that need to upgrade their equipment to more energy efficient appliances (the loan could be repaid over time through the utility bill)? Do business owners want a loan? Is the Utility set-up to manage loans? While apples and oranges other small Alaska communities have established "loans" to incentive residents to enter into fishing businesses and in many cases the loans were not repaid. It is hard for small town residents to collect from each other when relationships are so much tighter. Is this something that a local or Anchorage bank could accommodate more readily? Is this something that can be taken to the state legislature as a need and managed through Alaska Housing Finance or other similar organization? If business owners in Seward are saying this is what they need then maybe other rural businesses have a similar need. That said, are the businesses simply not viable in the off-season and ultimately not able to repay a loan? 31Page; Recruitment Related Questions 10. What types of new businesses should we target for Seward? What do you want Seward to be? What businesses are missing in Seward and/or what businesses will best compliment existing businesses? What suppliers could local businesses benefit from? What skills exist in Seward that are transferable to another industry or business? What businesses will result in living -wage jobs resulting from the effort? I'd recommend a community -wide economic development strategic plan that compliments or at least takes into consideration the Kenai Borough as well as Anchorage and Mat-su Borough strategic plans and initiatives. It may also be fruitful to review and keep apprised of the state planning process, AK Forward: http://www.alaskapartnership.org/ - opportunities for Seward to pursue may come from any of these areas. 11. What policies and incentives encourage small entrepreneurial businesses? Many BRE professionals argue that a BRE program is what is needed to encourage small businesses to remain healthy and local in a community. Business owners many times are critical of policies and incentives that are created and argue that they actually end up costing them as small business owners. Development of policies or incentives should not be undertaken without first better understanding what local businesses want and then working directly with the businesses to ensure that the policy or incentive actually results in the desired benefit for the businesses targeted. In our report to the City it is recommended that the City, Chamber and business representatives organize economic development teams. These teams could be industry or "cluster" focused and charged with identifying what local businesses need most to thrive. It has been my experience that just asking the question alone doesn't work, but instead a team of folks reviewing assets and challenges and thoughtfully working through local ideas as solutions results in the answer to your question. 12. How would we best market our safe, lovely, and community friendly community to businesses? Assuming that you develop a BRE program and are focused as much on retention as attraction marketing through a variety of avenues including: local media, community forums, collateral packets, training sessions, local business testimonials, etc. seems to work. This really again gets to having a comprehensive plan in place and utilizing the assets of your entire community. As an example, the article in the paper that came out following our visit was not very favorable to local business development. Working with local media outlets so that they understand the importance of characterizing Seward entrepreneurial activity in a positive light is critical. 4JPao-e General Questions 13. Which is consistently more successful for expanding the economy, growth of existing businesses or attracting new businesses? For a small community like Seward keeping local businesses healthy and local is likely the best strategy. You may also find ways to assist local businesses to grow which is great. Recruitment of new businesses is always "sexy" because it typically involves a ribbon cutting and other tangible events. Ultimately you are going to want to balance any recruitment efforts along with retention efforts. According to BRE statistics 60 to 85 percent of all new jobs are created by existing businesses. According to data provided through the International Economic Development Council: 70 percent of all business comes from existing businesses; 15 percent from referrals from existing businesses; and 15 percent comes from new business development. Given these and above statistics I would be carefully focusing efforts on attraction (15 percent of new business) when a potential 85 percent of the marketplace may feel ignored. 14. Should we establish and advertise for a voluntary ombudsman position? Assuming that the role of the volunteer ombudsman would be to listens to business owner concerns and questions and work with business owners, residents, city employees, and state agencies and other organizations to resolve business related problems or answer questions with the overriding goal of improving Seward's business climate - sounds great. This will likely only be beneficial though if the City is willing and able to implement enough changes that business owners determine that the business climate is favorably improved. 15. Do you have an example of a City Website that has proven successful for achieving economicgrowth in a community? TIP Strategies may have recommendations - 16. Whatspecific public policies encourage or discourage economicgrowth in a community? Likely, not one public policy is going to make or break the business climate in Seward. It is important that the public, private and non-profit sectors work collaboratively to improve the overall business climate of the community. Real and sustained business growth and therefore employment growth typically come down to a competitive advantage being realized and acted on. My hard question back to you - what can Seward do or be better at or what asset can Seward businesses leverage that sets it apart from the rest of the world? Location? Labor or Workforce? Consumer Markets? Specific industry or business cluster to leverage? 51Page 17. Should we focus John Bird's efforts on a Business Retention and Expansion Program (John is a retired Army colonel and summer employee who has produced the City Efficiency Study and the City Enterprise Fund Study)? Development of a BRE program is recommended. If this is something that Mr. Bird is interested in and has some background in a "win -win" may be achieved. 18. Do you know of the APEX program? Do you see this as a successful certification model for local governments to promote economic development? If you are referring to the same APEX that was part of the University of Alaska SBDC, yes. While I think the program is great, I don't know that this is the best use of resources, particularly staff time, for the City. 19. How much would it cost for UACED or other facilitator to help the City develop an economic development plan? Proposal provided separately. General Questions - Beyond the Scope These questions are really beyond the scope of the project and not an area that I feel like I have enough expertise to provide an informed response. 20. Is it economically beneficial and legal to provide business discounts to local residents? 21. How do we streamline lease procedures? (The length of time is driven by survey and platting requirements for new lease sites but the timeline is much less for a new lease of an existing lease site.) 22. Do you know of building codes from other cities that may allow older buildings to be renovated without excessive cost to business owners? 61Page Christv Ter From: Laura Cloward [director@seward.net] Sent: Sunday, June 27, 2010 4:48 PM To: 'Dan'; 'Deborah A; 'Linda Rae'; 'Mica VanBuskirk; 'Nici Murawsky'; 'Ron Long; 'Susan S'; 'Susie'; 'Teresa' Cc: Christy Terry Subject: Economic Development Work Session Wrap Up We met on Wednesday, the 23rd to discuss the Economic Development Assessment and begin to formulate our recommendations to Phillip/City Council. I'll summarize the discussion below, and add some thoughts specific to the assessment. Christy Terry and I met the next day to tackle some of the items, and I've included a summary of that meeting and our recommendations to the Board. Worksession: - We must focus on what is unique to Seward; most communities and even the State are facing similar difficulties maintaining a prosperous economy. What sets us apart? - We are losing businesses (not entrepreneurs) and that is not sustainable. - There is a disconnect between the harbor and downtown (philosophical, locational) - Why is Homer growing? Attitude of City Manager/Harbormaster. Seward has been somewhat stifled by anti- growth sentiment. - We need private sector success stories. Those in our video footage may not be representative of Seward's businesses. - How do we know who is struggling? How do we reach out to assist? - Is the "winter" closure of businesses a lifestyle or financial choice? - For off-season promotions, who is already doing it and does it require more energy to make it successful; regarding cost issues, does staying open year-round eat into the profitability of the summer months to the extent that the year-round business model becomes financially unsound? -What do we offer off-season to conference -goers? Which comes first, the people or the activities, and are there locals wanting to grow that off-season enterprise? - Who are we? What do we look like? What do we want to be? - Business inventory is critical for knowing what we have and focusing development efforts on what we need; also a recruiting tool as a business seeking to relocate wants to know what the competitors are and what the complementary businesses are. - Consider a "business incubator" of interested parties that mentor and support a new business with support information online. - How do we know who is here? The existing customer base with unmet demands - to encourage economic growth to meet their needs is difference then focusing on knowledge -based industry potential which doesn't necessarily have an existing customer base here. - KPEDD Study was just completed and within it, the private sector I.D.'d the City as the biggest hurdle. The perception needs to be addressed as if it is reality. - Ombudsman position needs to be able to access file and access the City Manager - needs the clout to do so. Consider a paid City position. - Should we consider revitalizing how we look - are there grants for communities that will help us create an identity? - The purpose of growth is to make more money and any efforts to prompt growth need to have that result. - We should compare our business inventory with that of Homer; what do they have that is driving people there that we don't; commercial fisheries and support services are a huge component. Meeting with Christy: 1 - Shared the market profile/business inventory from the late '80's. Christy will work on getting the City to update the inventory in addition to creating a community profile. - City will be streamlining their support to business section - incorporating more useful information and hopefully adding on-line resources. To date, City does not offer online forms and resources in order to encourage customers to come in and see them ... we discussed how critical it is that online applications are available for the savvy business developer, who will research the process in addition to the community before they make a call. - Also discussed being able to provide an online business license search, similar to the state, to allow prospective businesses to research their competitors and complements. - Discussed the lack of a protocol for business requests and would suggest building on Ron's idea of a business incubator as follows: 1. City designate the Chamber as their Econ Dev. entity. Paves way for funding and partnership similar to the 2004 Resolution which designated the Chamber as the Marketing Arm of the City. 2. Chamber put together a group of interested private business representatives as the biz. incubator. 3. Requests from new businesses or inquiries would channel through www.sewardforbusiness.com and a separate phone number at the Chamber. Chamber would partner with community development and the biz. incubator group to determine the level of support the inquiry needs (info only, one-on-one mentorship, full orientation program). 4. Within the partnership, the City would be responsible for maintaining community profile information, tax revenue, business info etc for use by the incubator group and in publications the Chamber would create for inquiries. 5. Chamber would field initial requests and be responsible for publishing the demographic and economic information. I think that wraps up both meetings. Laura taara aPoward, I OM Executive Director Seward Chamber of Commerce Seaeojn907-224-8051 SO 1. Promote Seward's Iditarod Importance - Advertise biking and hiking the famous trail from its starting point along Resurrection Bay (X Total miles and Y-miles paved) 2. Promote Seward's Gold Rush Importance - Entryway for gold miners headed to goldfield at Hope, Sunrise and Iditarod 3. Promote Railroad - Starting point for the first railroad in Alaska 4. Sailing - Great place to sail boat charter available 5. Promote Seward as Alaska's Mural Capital 6. Update Walking Tour & consider replacing with area's wildlife film 7. Sealife Center on Chamber site (Alaska's only Aquarium) 8. Combat Fishing Derby on National News 9. Promote Mt. Alice Trail 10. Mt. Marathon Run on National News 11. Entice and invite Sportswear Companies (North Face, Nike, etc.) to the Mount Marathon Race 12. Host Mountain and Touring Bike races (invite bike and sportswear Companies) 13. Open Historical Play (High School Students Develop) 14. Open Historic Type Saloon with Musical and Dancing Performances, Alaskan Poems Recital (Similar to Fairbanks Cripple Creek) 15. Expand Special Offseason Events (Fasching, October Fest, etc.) 16. Improved linkage with Army Recreation Camp especially during the offseason months 17. Erect informative colorful directional signs 18. Consider offering discounts for residences (some stores already offer military discounts) and maybe all Alaskans (drivers license check) 19. Consider waiving city sales tax to residents and maybe all Alaskans (drivers license check) 20. Install electronic event/advertising sign at City Shop 21. Develop email address book to inform area residents of special events, sales, etc. 22. Classic/race car show/rally 23. Power boat race/show 24. Music/Food & Craft Fairs/Festivals (Market Pavilion) 25. Sail boat regatta 26. Offer grants for special events (scaled due to event & anticipated attendance) 27. City cover insurance cost for special events 28. Establish Event Grant Program 29. Open the lagoon for canoeing, fishing (?), etc. 30. Better advertise local movie theater (upgrade to 3D) 31. Sponsor/Host Sports Tournaments 32. Mural Society paints two murals outlining map directory of harbor & downtown businesses (Top of sign should state "Seward Gateway to Alaska") One could be placed at the small City park across from the Rail cars (bike shop & Smoke Shack; other strategically located at the City's RV park) 33. Paint grizzly, moose or something else Alaskan that visitors could follow downtown 34. Market Seward as Alaska's Wedding Capital Utilize Historic Episcopal Church, Sealife Center, Pavilion, restaurants for catering, Hotel Seward and Edgewater within walking distance, rent tuxedos at Urbachs (especially during the winter) Bride & Groom delivered or ride away in dogsled 35. Construct multipurpose sport complex large enough to host state athletic events (ice hockey, basketball, etc) plus double as skating rink 36. Initiate marketing campaign to capture cruise customers flying into Anchorage early (special deals — waive rental car destination drop off fees) Subject: Implementation of Application Process for the Tourism & Special Event Grant Program In order to support community activities that generate economic activity in Seward, the Tourism and Special Event Grant program is being established by the City Council. The Grant Program is being initiated to financially assist businesses and organizations that promote Seward events and generate tourism that benefit local businesses, merchants and other activities. The application process has been developed to assist applicants demonstrate their advertising and marketing plans will increase attendance at their events; thereby, making them more successful and increasing revenue streams into Seward. The application process will support the program and benefit the community by: ❑ Funding recurring events that have proven to be community supported, relied on and enjoyed ❑ Attracting special events through promotion, advertising and marketing ❑ Increasing tourism activities that will provide increased economic benefit to Seward. The application process creates accountability and provides requirements to increase advertising and marketing efforts in order to promote the events that receive funding. This in turn should have a positive economic impact on the city. The grant program is based on three levels. Each level has specific requirements distinguishing it from the others. Each applicant will choose the funding level that best suits their qualifications to meet the requirements. Event organizers are welcome to apply at any level they feel they can appropriately justify. Please see the following chart for a description of each of the levels: Level 1 - Community Enrichment The community has come to embrace certain events that occur each year. These events provide a great contribution to the arts and culture this community has come to enjoy and support. Without the support of this grant program, these events would not be able to reach the level of marketing that comes with additional funding. Applying for funding in this category would require filling out a Community Enrichment Fund Grant application. The requirements are: Type of Event Audience Required Achievable Grant participation Marketing levels Cultural arts 500 — 2000 Modest marketing $500 - $1500 events to immediate area Level 2 - Special Events Events that are applying for funding under this category would be required to develop a dynamic marketing and advertising campaign that would demonstrate an ability to attract participation at the event. Applying for funding in this category would require filling out a Request for Special Event Fund Grant application and a Special Event Program Questionnaire. The requirements are: Type of Event Audience participation Required Marketing Achievable Various 2000 — 3000 Dynamic, $1,500 - $3,000 thorough, and detailed advertisement and marketing plan that will increase tourism Level 3 - Tourism Events that are funded under this category will be required to develop a comprehensive marketing and advertising campaign that demonstrates an ability to attract participation to the event and economic benefit to Seward and the region. Events that utilize multiple talents/experiences at different venues and create packages with other local retail and service businesses, restaurants, hotels, and bed and breakfasts are considered for this category. Applying for funding in this category will require filling out a Request for Tourism Fund Grant application and a Tourism Program questionnaire. The requirements are: Type of Event Audience participation Required Marketing Achievable Grant levels Various 3000 or more Dynamic, $3,000 - $7,500 thorough, and detailed advertisement and marketing plan; comprehensive, combined efforts with multiple services that will reach multiple City's in the region The Guidelines, Applications, and Questionnaires are attached for your convenience. They are also available at the City Hall, Community Development Department or on the City's website: http://www.cityofseward.net. The City is excited about the release of this application process and will be available for any questions that you have in filling out the new application and questionnaire. Please contact Clarice Douglas @925.960.4140 or cmdouglas@ci.livermore.ca.us for assistance. Attachments: Tourism and Special Event Grant Guidelines Community Enrichment Grant Application Special Event Grant Application Special Event Program Questionnaire Tourism Grant Application Tourism Program Questionnaire FY2011-12 Tourism and Special Event Grant Guidelines Purpose: The City Council will allocate funds to provide financial support for activities associated with promoting the City of Seward events and arts and cultural events that: ❑ fulfill the community's cultural arts experience ❑ promote Seward as a destination ❑ produce an economic benefit to Seward and the region, and ❑ generate tourism. Program Guidelines: 1. An event questionnaire and application must be filled out and submitted to the Special Event Review Board (PACAB, Chamber of Commerce & Community Development Director) within the dates of the application period. 2. Preference will be given to requests for events that directly benefit businesses and other organizations and to events that provide enrichment through cultural arts as well as generate the largest attendance and encourage tourism to the area. 3. Grants cannot exceed twenty-five percent (25%) of the total event expenses. Groups must demonstrate that at least seventy-five percent (75%) of the event expenses are in place prior to submittal of the grant request. 4. Grant payments are issued after the event. Receipts for approved expenses must be submitted to the Events Coordinator in order to receive the grant payment. 5. Generally, only one Tourism and Special Event grant will be made to a sponsor per calendar year. 6. Funds will be granted only for expenses related to the event performance, including but not limited to advertising, marketing, transportation, safety and security, rental of equipment, and miscellaneous supplies. Funds will not be granted for items that will be given away or sold in connection with the event, or for salaries associated with event planning and administration or for speaker or guest honorariums. Due By - September 15, 2011 - No Later than 5:00 p.m. Application Period: July 15 - September 15, 2011 Community Enrichment Grant Application Applicant's Name Telephone Address Street City State Zip Sponsoring Non -Profit Organization Name of Event Description of Event Event Location Previous event dates (if applicable) Event Date(s) Amount Requested Projected net revenue How will grant be used? City contribution to prior events (if applicable) Estimated attendance Please indicate basis for estimate Estimated percentage of attendees from out of town Describe advertising or publicity directed at non -Seward residents How will the event benefit Seward? Additional comments ❑ Approved ❑ Denied Signature - City Representative Date Title Due By - September 15, 2011 - No Later than 5:00 p.m. Application Period: July 15 - September 15, 2011 Special Event Grant Application Applicant's Name. Telephone Address Street City State Zip Sponsoring Non -Profit Organization Sponsoring Non -Profit Organization Name of Event Event Date(s) Description of Event Event Location Description of Event Event Location Previous event dates (if applicable) Amount Requested How will grant be used? Projected net revenue City contribution to prior events (if applicable) Estimated attendance Please indicate basis for estimate Estimated percentage of attendees from out of town Go to Special Event Program Questionnaire ❑ Approved ❑ Denied Signature - City Representative Date Title Special Event Program Questionnaire Events must demonstrate an appropriate level of advertising and marketing. Audience participation of 2000 — 3000 is required for funding in this category. Grant levels $1,500 - $3,000. Please describe, in detail, the event for which your organization is requesting a grant. How will the event benefit Seward? Please describe the marketing/advertising support that will be used for this event. Provide a budget for the marketing/advertising campaign. Following are the marketing and advertising programs that are eligible for support through this program: ❑ Graphic artist/design ❑ Permission based email campaigns ❑ Flyer production/distribution ❑ Website marketing that increases ❑ Print advertising (Newspaper/mag) traffic or potential visitors ❑ Radio advertising ❑ Website enhancements that are likely ❑ Television advertising to increase tourism ❑ Direct Mail What media/marketing vehicle will be the basis of your campaign and why do you feel this is the best vehicle to promote your event? Which demographic/lifestyle segments would this marketing campaign be directed toward? (e.g., entertainment preferences, consumer habits, household income, age) Please indicate, if applicable, where you have marketed this event in the past and how and when this was done. What tracking mechanism will your campaign include to ID how the customer heard about the event? What are the projected attendance totals for this event? What are you basing this projection on? What mechanism do you use to track attendance? What geographic areas will this event attract? Due By - September 15, 2011 - No Later than 5:00 p.m. Application Period: July 15 - September 15, 2011 Tourism Grant Application Applicant's Name Telephone Address Street City State Zip Sponsoring Non -Profit Organization Sponsoring Non -Profit Organization Name of Event Description of Event Event Location Description of Event Event Location Previous event dates (if applicable) Event Date(s) Amount Requested Projected net revenue How will grant be used? City contribution to prior events (if applicable) Estimated attendance Please indicate basis for estimate Estimated percentage of attendees from out of town Go to Tourism Program Questionnaire ❑ Approved ❑ Denied Signature - City Representative Date Title Tourism Program Questionnaire Events utilizing multiple talents/experiences at different venues and create packages with businesses, restaurants, hotels and bed & breakfasts, are considered for this category. Audience participation of 3000 or more is required for funding in this category. Grant levels $3,000 - $7,500. Please describe, in detail, the event for which your organization is requesting a grant. How will the event benefit Seward? Please describe the marketing/advertising support that will be used for this event. Provide a budget for the marketing/advertising campaign. Following are the marketing and advertising programs that are eligible for support through this program: ❑ Graphic artist/design ❑ Permission based email campaigns ❑ Flyer production/distribution ❑ Website marketing that increases ❑ Print advertising (Newspaper/mag) traffic of potential visitors ❑ Radio advertising ❑ Website enhancements that are likely ❑ Television advertising to increase tourism ❑ Direct Mail What media/marketing vehicle will be the basis of your campaign and why do you feel this is the best vehicle to promote your event? Which demographic/lifestyle segments would this marketing campaign be directed toward? (e.g., entertainment preferences, consumer habits, household income, age) Please indicate, if applicable, where you have marketed this event in the past and how and when this was done. What tracking mechanism will your campaign include to ID how the tourist/visitor/customer heard about the event? Are you planning to package this event with other tourism products? If so, with who are planning to partner? Describe in detail (e.g., combining efforts w/hotels, wineries, restaurants, etc.). How will your event attract or enhance tourist stays, both overnight and day trip tourists? What are the projected attendance totals for this event? What are you basing this projection on? What mechanism do you use to track attendance? What geographic areas will this event attract? Why? Why Buy Locally Owned? First and foremost, so our local, living economy stays healthy and strong. Additionally we want the Seward Community to continue to be its unique, wonderful self; so that our place doesn't look like every place. There are many well -documented benefits to our communities and to each of us to choosing local, independently owned businesses. We realize it is not always possible to buy what you need locally and so merely ask you to: Think Local FIRST. Think Local - Buy Local - Be Local 1. Significantly More Money Re -circulates. When you purchase at locally owned businesses rather than nationally owned, more money is kept in the community because locally -owned businesses often purchase from other local businesses, service providers and farms. Buying local helps grow there businesses as well as our regions tax base. 2. Customer Service Is Often Better. Local businesses often hire people with more specific product expertise and they invest in their employees for better customer service. 3. Buy Local -- Support yourself: Several studies have shown that when you buy from an independent, locally owned business, rather than a nationally owned businesses, significantly more of your money is used to make purchases from other local businesses, service providers and farms -- continuing to strengthen the economic base of the community. Case studies also show that locally -owned businesses generate a premium in enhanced economic impact to the community and its tax base. 4. Non Profits Organizations Receive Greater Support. Non Profits often receive greater support from local business owners, sometimes as much as 350% more money, than they do from non -locally owned businesses. 5. Unique Businesses Are An Integral Part Of Our Distinctive Character. The unique character of the Seward Community is what brought us here and will keep us here. Our tourism businesses also benefit, because our place doesn't look like everyplace. According to Richard Moe, President, National Historic Preservation Trust, "When people go on vacation they generally seek out destinations that offer them the sense of being someplace, not just anyplace. " 6. Keep our community unique: Where we shop, where we eat and have fun -- all of it makes our community home. Our one -of -a -kind businesses are an integral part of the distinctive character of this place. Our tourism businesses also benefit. 7. Environmental Impact Is Reduced. Local businesses make more local purchases requiring less transportation and usually set up shop in town centers rather than on the fringe. This generally means contributing less to sprawl, congestion, habitat loss, resource depletion and pollution. 8. Most New Jobs Are Provided By Local Businesses. Small local businesses are the largest employers nationally. 9. Local Business Owners Invest In Our Community. Local businesses are owned by people who: Live in this community; are less likely to leave; and are more invested in the community's future. 10. Put Your Taxes To Good Use. Local businesses in city and town centers require comparatively little infrastructure investments, add more to our tax base and make more efficient use of public services as compared to nationally owned stores entering the community. 11. Competition And Diversity Leads To More Consumer Choices. A marketplace of thousands of small businesses is the best way to ensure innovation and low prices over the long-term. 12. Encourage local prosperity: A growing body of economic research shows that in an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their one -of -a -kind businesses and distinctive character. 13. Buy what you want, not what someone wants you to buy: A marketplace of abundant small businesses is the best way to ensure innovation and low prices over the long-term. A multitude of small businesses, each selecting products based not on a national sales plan but on their own interests and the needs of their local customers, guarantees a much broader range of product choices. CITY OF SEWARD MARY LOWELL CENTER CONFERENCE CENTER FEASIBILITY ASSESSMENT Prepared for the City of Seward by Agnew::Beck Consulting www.agnewbeck.com University of Alaska Center for Economic Development ced.uaa.alaska.edu/ OCTOBER 2006 Most larger communities with conference facilities market through their local convention and visitors bureau, with funding from a local bed tax. In small towns such as Wrangell, marketing is done through a partnership between the conference center management and the local Chamber of Commerce. Location, Accessibility, Community Services The package of services, amenities and ease of access of a community are often factors influencing a conference location in as much as the facility available. • Valdez reported their building's location in regards to the Valdez community is highly favorable. They have the best view in town — this encourages local use and visitors are always pleased with the views the center offers of the surrounding area. The plan for the Mary Lowell Center has a similar central location and also has good views. • Valdez reported their city's location is a challenge to outside user groups, both the perception and the reality. Valdez has one small, regional airline that offers flight service and has had some conference schedules interrupted due to poor weather. The road is an option, but driving time to Valdez from Anchorage is about 5 hours and weather can make travel additionally challenging. People want reliability. The improved fast ferry connection between Whittier and Valdez might be an angle that they will pursue in the future. For rural areas that are trying to be competitive in the conference market, it is possible that emphasizing unique opportunities would be a good strategy. • Drawing potential clients' attention to an area's unique opportunities is an idea also advanced by the convention space director in Wrangell. They recently served a conference of over 250 persons, though local lodging could not accommodate this number. To serve this conference, the City of Wrangell contracted with the Alaska Marine Highway and had the state ferry, Matanuska, dock locally as lodging. "People thought it was great, and recognized that we would do whatever we could to accommodate their needs." The director acknowledged, however, that the lack of adequate local lodging provides challenges to serving large groups. 7. OPERATION PLAN Management & Marketing The conference components of the building will be operated by an entity to be hired by the City of Seward. The City will put out a request for proposals and select a qualified marketing partner. Most likely options include: City operated (e.g., City employee serves as director), marketed under contract Non-profit operated and'marketed For -profit operated and marketed Chamber of Commerce operated and marketed The selected entity will be responsible for day to day operations, including managing center staff, marketing, booking and managing events, maintaining the conference space portion of the building, and overall responsibility for the success of the conference space as a business venture. As mentioned above, in most Alaskan communities, conference centers are managed and marketed by the local convention and visitors bureau, established as an independent entity and supported in large part by local bed tax revenues. Under this arrangement the municipal government has a measure of City of Seward Conference Facility Feasibility Report page 30 of 70 10.9.06 control over facility operations but all day-to-day decisions are made independently. In Wrangell, the center is operated by a city employee working in partnership with the Chamber of Commerce. Whatever management and marketing structure is selected, the goal should be to maximize the impact of what will inevitably by a limited marketing budget. Marketing efforts tied to the conference center and those by the Chamber of Commerce for the community as a whole will need to be coordinated and carried out cooperatively. Overview of Costs at Other Facilities As was presented in Section 6, operation costs for comparable facilities in other parts of the state range from a low of $132,000 in Wrangell, to $480,000 in Valdez, over $700,000 in Juneau and Anchorage. As a comparison, total operating costs ranged from a low of $22 to a high of $34 dollars per square foot of conference space. The largest components of these costs are for staffing and building operations. As was reported by several facilities, operating costs tied to energy use are rising faster than revenues. Operation Costs for the Seward Conference Center The table on the following page presents costs for the planned conference facility. Notes on cost estimates are presented below. Costs in year one include one time start-up costs. Costs thereafter increase by 3% annually, except for facility operation costs (utilities) which increase by 5% annually. a. Personnel Conference Center Coordinator — full-time position, responsibilities: - Booking - Connecting users with community services and facilities - Conference logistics, set up, troubleshooting - Assisting the Chamber and/or marketing coordinator with marketing Salary: $45,000 base, $61,875 with benefits (calculated as 3-7 9/0 over base salary) (While Wrangell is able to pay their director only $25,000, this is an anomaly and more a reflection of weakness of the community's economy. Given the diverse and challenging responsibilities associated with this position, a highly capable person will be needed and a salary of at least $45,000 will be required.) • Full time receptionist (City covers 15% of annual costs) — shared staff position with the National Park Service and National Forest Service Salary: $30,000 base, $41,250 with benefits • Full time facility maintenance (City covers 15% of annual costs) — likewise shared Salary: $30,000 base, $41,250 with benefits (seems low) • Contract staff — limited role assisting with audio-visual and communication equipment b. Egaoment Equipment costs are concentrated in the start-up phase of the facility. The table on the following page shows the types and costs of equipment required at the outset of facility operations. Note: this list should be reviewed and refined by Portico Architects. c. Marketing and Communication Marketing will be essential to the success of the facility. As outlined above, there are several options for carrying out marketing responsibilities. Whichever approach is adopted, the Conference Center City of Seward Conference Facility Feasibility Report page 31 of 70 10.9.06 Coordinator will need to collaborate with the Chamber of Commerce, with local organizations who periodically host events (e.g., the hospital), with organizations that independently market themselves (e.g. the SeaLife Center), and also with other members of the community, including businesses. To the degree that existing marketing materials and marketing activities, e.g., those of the Seward Chamber of Commerce, can be used to market the facility, costs charged to the conference facility operations budget can be reduced. Until decisions are made regarding who willmanage and market the center, this report identifies a number of marketing costs associated with the conference center. One time start-up marketing costs — the center needs to disseminate information regarding conference features, amenities and prices, as well as provide access to information regarding accommodations and other Seward visitor services and attractions. This should be done in the three modes listed below: - Sales package (brochure, rate sheets, etc.) - Website construction - DVD production and distribution Ongoing marketing activities - Update, distribute, reprint sales package - Update, optimize website - DVD copies and distribution - Limited travel (1 sales trip per year, in Alaska or outside) - Advertising (limited placement of print ads to draw prospective users to the conference center website) - Trade shows — no cost to conference operations; presumed to be covered by the Chamber and local businesses (see note below). This report presumes the facility will be actively marketed at least two years prior to its opening, in order to maximize use in early years of operation. Many conference bookings occur several years prior to the actual event so without this initial marketing effort use (and revenues) in the early years would otherwise be lower than what is shown in the revenue spreadsheet. No costs are shown for this pre -opening marketing. The report presumes these costs would be covered separately by the City or the Chamber of Commerce, as part of their regular marketing efforts'. d. Misc. Costs ("other") As shown on the detailed spreadsheet, this category covers a range of miscellaneous costs, including office supplies, janitorial supplies, training, and miscellaneous travel. e. Facility Operation Costs The City anticipates being responsible for 15% of ongoing facility operation costs: heat, light, water, sewer, and any other utilities. These costs are estimated at $6.00/square foot per year$. Costs for 7 It is presumed that the Chamber as a matter of course will promote the conference center along with other community attractions and services. This is common in other small communities. 8 This $6.00 figure is based on a consideration of estimates from rural communities like Bethel and Dillingham, where the average annual cost of building utilities and maintenance is between $10-12.00, and an estimate by Portico Architects. Portico looked into the 35% Schematic Design life cycle costs. Their conclusion, as relayed from Paul L. Schrooten of the National Park Service: "During the value analysis, the VA team evaluated and confirmed many of the cost assumptions used in TPG submittal. This resulted in a 20-year estimate for utilities, maintenance, repairs, replacement of equipment, and maintenance staff of $3,260,160 for the preferred alternative. If we assume the size of the facility has been refined to approximately 37,650 SF then the 20-year life cycle costs work out to $86.60, or about City of Seward Conference Facility Feasibility Report page 32 of 70 10.9.06 Seward Area Businesses by Category ...................................................................... ................................. ................................................ ................. ................................. Assisted Living 2 Automotive / Mechanical Services 9 Catering 2 Charter, Tour 91 Child Care Services 6 - Communication Services 6 Computer Services, Office Equipment 4 Construction, General Building 45 Construction, Heavy & Specialty 29 Education Services 8 Engineering / Architect 12 Event Planning 1 _ - Financial Services, Accounting 9 Commercial Fishing /_Processing / Aquaculture 16 Health Services 15 Hotel, Lodging, B&B 140 Industrial _ 5 Janitorial 3 ' Engineering, Construction and 11General Building categories :include several contractors that :acquire a city business license : :for a particular project. * Professional Services category: :includes a diversity of :businesses, from photography :to consulting. :* Some of the Retail Food :operations are Fourth of July :vendors. :' Some number of business :license holders have not :conducted any business. : Operators based outside of are included in most Business license applicants their business -- the designation is not: accurate. Legal Services 1 Locksmith 2 Manufacturing 4 _ Marine Services 9 Rental, Non Lodging 7 No Business Type Specified 27 Professional Services 127 _ Publications, Media 2 _ Real Estate, Monthly Rentals,_ Apartments 67 Recreation, Entertainment 9 Retail 45 Retail Art 13 Retail Clothing 3 Retail Cosmetic, Personal Care 2 Retail Electronics 3 Retail Grocery 3 Retail Hardware 6 Retail Liquor 6 Retail Miscellaneous_ 13 Retail Petroleum Products 6 _ :Seward Retail, Food 39 :categories. Retail, General Merchandise 8 Safety Services 2 :* Transportation Services, Land, Sea Air 28 :designate Non Profit (not health care) 1 :category Clubs I Organizations 13 :always MARKET PROFILE SEWARD ENHANCEMENT ASSOCIATION SEWARD, ALASKA HYETT•PALMA, INC. • sconomb development • strategic planning • ioprctsssionai training • HYETT•PALMA, INC. MARKET PROFILE SEWARD'S COMMERCIAL ENHANCEMENT AREAS SEWARD, ALASKA Prepared For: THE SEWARD ENHANCEMENT ASSOCIATION - and - THE CITY OF SEWARD, ALASKA Prepared By: HYETT-PALMA, INC. Washington, DC May, 1988 HYETT•PALMA, INC. COMMERCIAL AREAS' MARKET POSITION Seward's commercial enhancement area is composed of three distinct commercial districts: Downtown; the Boat Harbor area; and the Third Avenue corridor connecting the Downtown and Boat Harbor area. A description of the market position of each district follows. 0 Downtown The Downtown serves as the traditional commercial center for Seward and a significant portion of the area between it and Mile 38 of the Seward Highway. The Downtown serves as the primary shopper and convenience goods center for the majority of Seward's residents. Every effort must be made to ensure that this area remains commer- cially viable in order to continue providing Seward's residents and visitors with a convenient, compact commercial district within which to satisfy their basic consumer needs. • Boat Harbor Area The Boat Harbor area serves as Seward's link with the growing Alaskan commercial and recreational marine industry. The area serves as a convenience and service center for those utilizing the marine facilities. This area should continue to provide a well-rounded assortment of marine related goods and services. The area must be well maintained since the Boat Harbor is the primary destination for many of the community's visitors. 0 Third Avenue Commercial Corridor The Third Avenue Commercial Corridor serves -i- 4YETT•PALMA, INC. as a link between the Downtown and Boat Harbor area. The corridor is developing as a service and convenience goods center. The area has a limited number of establishments, but growth is anticipated duriA4 the near future. The corridor serves as the gateway to the Downtown. This area should be developed as a low -intensity commercial district, with emphasis placed on uses which continue to provide both convenience goods and support services to residents of the community. HYETT*PALMA, INC. EXECUTIVE SUMMARY OF MARKET PROFILE Hyett-Palma, Inc., is pleased to submit the following MARKET PROFILE as an element of the Seward Enhancement Association's and City Council's efforts to enhance the commercial areas of Seward. The MARKET PROFILE is designed to inform existing local businesses of economic opportunities which exist within the market area and present opportunities for the expansion of existing businesses and the opening of new commercial operations within the community. Seward has a dynamic market and has tremendous potential for continued growth. Several key findings of the MARKET PROFILE which underscore these facts include: • The total 1988 estimated income earned by residents within Seward's primary trade area is $32,000,000. • The average household income in Seward is $29,100. 0 Approximately 65% of Seward's primary trade area households earn over $15,000 per year. • Seward employs approximately 1,500 workers. • Seward may experience over 125,000 tourist visits during the 1988 season. 0 Seward's commercial areas are the regional shopping centers for most of the Southeastern portion of the Kenai Peninsula. The community experiences a significant inflow of retail sales during the tourist season. Due to the relatively isolated nature of the lower Kenai Peninsula, during the Winter months most people within Seward's primary and secondary trade areas look to the Seward commercial areas to satisfy most of their shopping needs, partic- ularly convenience shopping goods. • With a high degree of sales inflow, Seward is recognized as a regional center and has established a critical mass of retail operations. 0 Seward, as recently noted by the NEW YORK TIMES, HYEYToPALMA, INC. "...is a good choice for those wishing to sample the real Alaska." • With approximately 110 active businesses, Seward's commercial enhancement areas provide a solid economic unit to serve the needs of local residents and a growing tourism economy. • Approximately 83% of the local residents and customers and 90% of the local businesses shop Seward 2 or more times each week. • Approximately 75% of the local residents and customers and 68% of the local business owners do most of their shopping in Seward. • Only 22% of the local residents and customers and 32% of the local business owners do most of their shopping in Anchorage. • Seward residents, customers and business owners support the goals of the Seward Enhancement Association's Commercial Areas Enhancement Program. • Approximately 51% of the businesses surveyed indicated that they planned improvements to their buildings and/or businesses during the next year, at an estimated cost of approximately $1,000,000. • Approximately 66% of Seward's businesses have been in operation for 3 or more years and approximately 47% have been in business for 10 or more years. • Of businesses surveyed, approximately 84% indicated that they would be willing to invest in the enhancement of Seward's business areas. • Seward's per capita sales potential is 8.2% greater than the economic region within which it is located. • Seward's total annual sales potential growth rate of commercial areas is 4.2% greater than the economic region within which it is located. • Between 21% and 26% of Seward's taxable sales are generated from tourists. • Seward has a potential market for the -iv- HYETT•PALMA, INC. introduction of the following new businesses or the expansion of existing businesses: • Children's Clothing • Sporting Goods • Drug Store • Women's Apparel • Household Textiles • Household Furnishings • Electronic Products • Auto Repair Services • Cosmetics • office Supplies • Books, Records, Tapes and Compact Discs • Offices • Transportation Services • RV Repair and Supplies • Marine Related Food Services • Commercial and Recreational Marine Support Services • Pleasure Fishing Supplies and Equipment • Commercial and Pleasure Fishing and Marine Transport Operations This MARKET PROFILE is the first economic research conducted in conjunction with current efforts to enhance Seward's commercial areas. The material will be updated periodically as additional information is generated. -v- IHYETT•PALMA, INC. CONTENTS COMMERCIAL AREAS' MARKET POSITION --------- ------------- i EXECUTIVE SUMMARY OF MARKET PROFILE ------------------- OVERVIEW OF MARKET PROFILE ---------------------------- 1 DEFINITION OF TRADE AREA ------------------------------ Boundaries of Trade Area ------------------------- 6 Description of Primary Trade Area Customers ------ 6 ACORN Analysis of Trade Area Residents - ----- ----- 9 Customer Target Groups --------------------------- 13 ASSESSMENT OF COMPETING SHOPPING FACILITIES ----------- 14 Mile 7 to Mile 38 of Seward Highway -------------- 14 Soldotna----------------------------------------- 15 Homer-------------------------------------------- 15 Metropolitan Anchorage --------------------------- 16 INVENTORY/ASSESSMENT OF COMMERCIAL AREAS' BUSINESSES AND BUSINESS CLIMATE ----------------------- 17 Character and Market Appeal of Seward's Commercial Areas ----------------------- - 17 Inventory of Businesses ---------------------- ---- 19 RESULTS.OF CUSTOMER/RESIDENT/BUSINESS SURVEY ---------- 27 Customer Loyalty --------------------------------- 27 Key Issues --------------------------------------- 28 New Businesses Desired --------------------------- 31 Private Enhancement Initiatives ------------------ 32 Stability of Local Businesses ------------ ------ -- 32 Support of Enhancement Efforts ------------------- 33 -vi- HYETT*PALMA, INC. CALCULATION OF SALES POTENTIAL ---------- ------ 34 Retail Sales Leakage Analysis -------------------- 34 Sales Potential Analysis ---- r-------------------- 37 Taxable Sales to Tourists ------------------------ 39 IDENTIFICATION OF POTENTIAL NEW BUSINESS - 42 TYPES AND BUSINESS EXPANSIONS ------------------ -_ HYETT•PALMA, INC. OVERVIEW OF MARKET PROFILE Following is a profile of the customer market served by the commercial areas of Seward, Alaska. The purpose of this market profile is to present a broader base of market understanding to the community and present valuable economic information which will serve as an economic guide for the community's efforts to enhance its commercial operations. The specific economic elements addressed by this market profile include: • Definition of the Trade Area Seward's primary trade area is identified. The definition includes a description of: • the demographic and economic characteristics of those who live within the trade area • the character, composition and buying potentials of consumer groups, based on the findings of an ACORN study of the households within the trade area • the "typical" tourist groups currently visiting the city • Assessment of Competing Shopping Facilities Within the Trade Areas Other commercial areas within Seward's primary and secondary trade areas are identified and analyzed. The analysis includes an -1- HYETT•PALMA, INC. identification of the commercial areas' locations and a brief description of their commercial orientation. • Inventory/Assessment of Commercial Areas' Businesses and Business Climate An inventory of existing businesses within Seward's commercial areas was completed. Businesses are identified by name, location, and SIC classification. Also, gross square footage of business space and number of employees is also identified for those businesses which provided the information through survey. An analysis of the current business climate of the commercial areas was also completed. The analysis characterizes the business climate and overall market appeal of the areas by type of merchandise, quality of merchandise, and image projected by the areas. • Shopper/Business/Resident Survey A comprehensive survey of the commercial areas' shoppers was undertaken. The purpose of the survey was to determine shopper attitude concerning the commercial areas, type of shoppers who are frequenting the areas, place -2- HYETT*PAIMA, INC. of residence of the shoppers who are utilizing the areas, shopper attitude concerning the quality of the areas and changes which may be needed in physical condition, merchandise lines or store types. A comprehensive survey of residents within the trade areas was also undertaken. The purpose of the survey was to determine where local residents are shopping and why, what they feel about the commercial areas, what they would like to see changed within the commercial areas in order to encourage them to shop in Seward more often, and how often they shop Seward. All business owners within the commercial areas were surveyed to determine their concerns about the areas, their expansion plans within the areas and their desires for the enhancement of existing businesses and the opening of new businesses. • Calculation of Sales Potential of Commercial Areas The sales potential for the commercial areas was computed. -3- HYETT*PALMA, INC. • Identification of Potential New Business Types and Business Expansions Based on the results of the market analysis, a listing of potentially successful new business types and businesses which may be enhanced was prepared. As noted above, the results of this market profile serve as an economic guide for Seward's efforts to enhance the commercial areas of the community. -4- fVARro) MT 9f N'550N 4,X7f 3 y ►� cEME F�eres7 ' ti �'`� ea«Nv HOKx J NlMOR w CORGAL oil pA10.V H1..L4,566 / PEAK LAKE y , ��' • � � C� "tl RACE POIrtT \.mod_ _: sae MQATHON t r Fj RACE STARTS HERE "-A C14ILD0.1t4'L aAwc. 4 e BEAR Mt, o° 4,003 J to tAWfLL PbIMT 5014 i'o A N C Hp R^Ge— (AND) 1Z*3uP-*-e silo+ RIYER A:Owt, r.-..` (TO clot rF ACIrR.) yr ro ¢ lgESrAUJLp WTI �wt01lEJU�i py� ttwlKJ L NA .1 AIRFOR-r+ ENHANCEMENT AREA INDUMIAL CENTIR, 44 o -Tvv� -ESU C�+EK'' v `�. �TIo ✓ f� ,n � % ";Op (yjk fajtar ri9ltt) s 1��°"^��� .� MINI MA",=WARC COFFEE SHOP. pALACE,FA1tE W[ATNER CAFE,THORMS. J1�Iru ENtARQENEIR or SEWAO SAIQaXPIZZAADb1.IQHA"W01WMCLLA 14:s'� OO W Y TOW N ^Rth Q s I*Itoc (S "'raw lCotylimna, # �w J�art"=Aowl Sox u34- Seva d Alas& 99b4 • god 224 ss181 HYET OPALMA, INC. DEFINITION OF TRADE AREA Following is a description of Seward's primary trade area, a demographic and socioeconomic profile of the trade area residents, and an identification of Seward's target customer groups. Boundaries of the Trade Area The primary trade area of Seward's commercial areas is defined, for the purposes of market analysis, as the geographic area from which the majority of the area's customers are drawn. Based on current customer travel patterns, as documented through the completion of pedestrian, telephone, business and tourist surveys, the primary trade area for Seward is: 0 THE AREA FROM MILE 0 TO MILE 7 0 THE LOWER 48 AND ANCHORAGE DURING THE SUMMER MONTHS (MID-APRIL TO SEPTEMBER) Description of Primary Trade Area Customers Seward's commercial areas serve a very broad group of local residents, as noted by the attached table entitled KEY DEMOGRAPHIC AND INCOME INDICATORS -- SEWARD'S PRIMARY TRADE AREA. The primary trade area has a 1988 total estimated population of 3,045, with an estimated 1,100 households. The average size of each household is 2.8 persons per household. The total 1988 estimated income earned by residents within cm HYE7T•PALMA, INC. KEY DEMOGRAPHIC AND INCOME INDICATORS SEWARD'S PRIMARY TRADE AREA Mile 0 to Mile 7 Key Indicators 1980 1988 Population Households Average Household Size Total Income Average Household Income Distribution of Household Income: • $ 0- 9999 • $ 1 0, 000-1 4 , 999 • $ 15,000-24,999 • $ 25,000-34,999 • $ 35, 000-49, 999 • $ 50,000-74,999 • $ 75,000 & OVER Age Distribution: • 0 - 4 • 5 - 11 • 12 - 16 • 17 - 21 • 22 - 29 •A0 - 44 •-45 - 54 • 55 - 64 • 65 - OVER Average Age Median Age 1,902 671 2.80 $16,200,000 $24,100 174 (26.0% 100 (14.9%; 135 (20.1C 85 (12.7% 109 (16.3%: 52 ( 7.8%; 15 ( 2.2% 158 ( 8.3%) 187 ( 9.8%) 144 ( 7.6%) 196 (10.3%) 375 (19.7%) 407 (21.4%) 177 ( 9.3%) 140 ( 7.4%) 117 ( 6.2%) 30.7 27.6 3,045 1 ,1 00 2.80 $32,000,000 $29,100 252 (22.9%) 139 (12.6%) 179 (16.3%) 178 (16.2%) 156 (14.2%) 129 (11 .7.%) 67 ( 6.1%) 244 ( 8.0%) 318 (10.4%) 217 ( 7.1%) 244 ( 8.0%) 477 (15.7%) 803 (26.4%) 290 ( 9.5%) 238 ( 7.8%) 214 ( 7.0%) 32.5 30.4 SOURCES: Hyett-Palma, Inc., Washington, DC CACI, Fairfax, VA Note: Income figures are expressed in '88 dollars. -7- HYETTePALMA, INC. the primary trade area is $32,000,000. This represents an average household income of approximately $29,100. Approximately 65% of Seward's primary trade area households earn over $15,000 per year, while almost half of the households earn $25,000 per year or more. Seward has a young primary trade area population. The average age of the residents is 32.5. Seward also serves as the employment base for approximately 1,500 workers, as estimated by the Alaska Department of Labor. These people are employed by a broad range of establishments, including: businesses within Seward's commercial areas; schools; hospital; government; banks; commercial fishing operations; and the community's industrial operations. As noted by the report entitled KENAI FJORDS NATIONAL PARK VISITORS USE STATISTICS, prepared by the National Park Service, the park served as the destination point for approximately 90,000 tourists during the 1988 season. The season extends from mid -April through September. Tourists visit the community, primarily, via cruise liner, air service, train and auto/camper. Based on park visitor growth trends during the past five years, projections provided by the University of Alaska Marine Advisory Service (for charter and sightseeing and fishing) and projected cruise ship callings, Seward may serve as the destination -S- HYETi•PALMA, INC. point for over 125,000 visitors during the 1988 tourist season. ACORN Analysis of Trade Area Residents Seward's primary trade area has three distinct types of customer households - - SETTLED FAMILIES, FAMILY SPORTS & LEISURE LOVERS, AND ADULT HOUSEHOLDS. These lifestyle groupings were identified through an extensive analysis of households within the primary trade area. The analysis was conducted in accordance with the ACORN Market Segmentation System -- A CLASSIFICATION OF RESIDENTIAL NEIGHBORHOODS. The ACORN System was developed by CACI of Fairfax, Virginia. It is a state -or -the -art market segmentation and target marketing tool. The premise of ACORN is that people who share similar demographic, housing and socioeconomic characteristics tend to live in homogeneous neighborhoods and share similar lifestyles, thus present similar potential for products and services and react similarly to media, direct mail and other promotions. The system is based on the results of continuous research conducted throughout the United States. It is designed to enable users to determine a profile of current customers and to target prospective customers. The three distinct types of customer households revealed by the ACORN analysis of Seward's primary trade area is as follows: -9- HYETT•PALMA, INC. • SETTLED FAMILIES This group represents 30.5% of the primary trade area households. The group is comprised of predominantely white, middle income families, with high concentrations of 5 to 16 year -olds and 30 to 44 year -olds. Over 80% of the households in this group earn between $15,000 and $50,000 per year, compared to 49% nationally. High proportions of college graduates and low unemployment characterize this group. Lifestyle and marketing implications for this group include: • presence of middle-aged parents and teenage children influences the consumption habits • most own homes and cars • like outdoor activities, including fishing and gardening • buy men's suits, jackets and jeans • buy women's suits, dresses and purses • high demand for home improvement items • interest in foreign travel is high • consumption of diet and non -diet carbonated drinks is high • medium demand for sporting goods products and deli shopping _10- HYETT+PALMA, INC. • FAMILY SPORTS & UISURE LOVERS This group represents 32.3% of the households in Seward's primary trade area. The group is comprised primarily of young, white, blue collar families. Parents are in their mid-20s and early 30s, with average family size slightly above the national average. High proportions of craft/operators dominate the work force in this group. Over 16%- of its members have moved from another state within the past five years, thus the group is mobile. Lifestyle and marketing implications for this group include: • big borrowers and good repayers • top consumers of gasoline, auto tires and shock absorbers • mail order is a way of life -- clothes, seeds, plants and home furnishings • extremely active in men's sports • rifles and all types of guns are purchased in strong numbers • high readership of mechanics magazines • clothing budgets are largely devoted to men's and women's jeans and athletic -11- HYETT•PALMA, INC. shoes • buy very high numbers of stereos and and sound equipment • medium to glow consumers of deli products • ADULT HOUSEHOLDS Approximately 32% of the households are within this lifestyle group. Young adults and the elderly dominate this group. Family size is below average. Over 18% have college degrees (31% above average.) The distribution of families with incomes under $50,000 is on par with the national average, while the upper income groups are under -represented. The labor force is predominantely white collar. Sixty percent of adult women in this group work outside the home. Lifestyle and marketing implications for this group include: • buy stereos and sound systems • most have two or more TVs • substantial number have personal computers at home • high newspaper readers • high magazine readers • high consumers of home improvement items -12- HYETT•PALMA, INC. • high consumers of deli products e medium consumers of sporting goods products Customer Target Groups The primary customer target groups for Seward's commercial areas are: • HOUSEHOLDS EARNING $15,000 PER YEAR OR MORE (Approximately 65% of the primary trade area households earn this amount) • EMPLOYEES WORKING WITHIN SEWARD'S COMMERCIAL AREAS AND THE CITY OF SEWARD, INCLUDING COMMERCIAL FISHING FLEET DOCKINGS (Approximately 1,500 persons are currently working each day in the area) • THE TOURIST VISITING SEWARD (Potential for over 125,000 tourists during the 1988 tourist season) -13- NYETT•PALMA, INC. ASSESSMENT OF COMPETING SHOPPING FACILITIES An assessment of shopping facilities that might compete with the commercial areas of Seward was undertaken. This analysis included an assessment of shopping facilities between Mile 7 and Mile 38 of the Seward Highway, shopping facilities located within other parts of the Kenai Peninsula -- particularly Homer and Soldotna -- and shopping facilities within metropolitan Anchorage. The assessment follows. Mile 7 to Mile 38 of Seward Highway The only significant concentration of commercial activity between Seward and Mile 38 is the commercial center of Moose Pass. This commercial area serves as a convenience center for the residential concentration of Moose Pass. Moose Pass is located 25 miles north of Seward. Commercial development within Moose Pass consists of convenience grocery, liquor, restaurant/bar and gas station businesses. While these facilities serve a portion of the convenience shopping needs of Moose Pass residents and a small portion of the highway traffic between Mile 38 and Seward, the commercial center of Moose Pass is not seen as providing major competition for the commercial facilities of Seward. -14- HYETTePALMA, INC. Soldotna Soldotna, Alaska, is located.approximately 90 miles from Seward. The community serves as the seat of the Kenai Bourough government and is the largest commercial center on the Kenai Peninsula. Soldotna offers a full range of convenience and shopper goods. While Soldotna may attract some portion of its customers from the Seward area, it is unlikely that a customer would travel to Soldotna to shop unless other business is being conducted while in Soldotna. Due to the travel distance to Soldotna from Seward and, particularly, the relatively few additional miles from Mile 38 to Anchorage, it can be assumed that residents of Seward would most likely opt to travel to Anchorage rather than Soldotna in order to experience a broader range of product and service options. As noted by the customer and resident surveys completed in conjunction with this market profile, only 2% of the persons interviewed indicated that they do most of their shopping in Soldotna. Homer Homer, Alaska, is located approximately 150 miles from Seward. The community is a major tourist destination and aggressively competes with Seward for tourist traffic from Anchorage. The community is a fishing village and art community. -15- HYETT•PALMA, INC. While Homer is an attractive fishing area, it does not offer a broad Alaskan experience -- i.e., the tourist can enjoy fishing but is presented very limited commercial offerings and the community does not have what could be termed a "downtown" area, as does Seward. Unquestionably, Homer is major competition for the tourist originating in Anchorage. However, Seward offers the visitor a much broader destination experience -- by providing a quality balance of both commercial facilities and marine facilities, as well as historic and natural assets. Metropolitan Anchorage Anchorage, Alaska, as the state's largest city, offers a full -range of commercial facilities, similar to those provided by most large metropolitan areas in the lower 48. Anchorage is approximately 125 miles from Seward via the Seward Highway. Due to the city's proximity to Seward, Anchorage is, and will continue to be, a major shopper goods market for Seward residents. This is particularly true for those purchasing larger ticket -size items. -16- HYETT*PALMA, INC. INVENTORY/ASSESSMENT QF COMMERCIAL AREAS' BUSINESSES AND BUSINESS CLIMATE A thorough inventory of businesses within Seward's commercial areas was undertaken. Businesses were identified by name, street location, standard industrial classification number, and gross square footage of business space and number of both full and part-time employees, for those businesses which provided the information through survey. The listing of Seward's enhancement area businesses is presented on the attached charts. An analysis of the current business climate .of Seward's commercial areas was also completed. The assessment characterizes the commercial areas and their overall market appeal by type of merchandise, quality of merchandise and image projected by the commercial areas. The character/market appeal assessment follows. Character and Market Ap eal of Seward's Commercial Areas Seward's enhancement area consists of three commercial concentrations -- Downtown, the Boat Harbor area and the commercial development on Third Avenue between the Downtown and the Boat Harbor area. Downtown Seward presents a broad assortment of retail and service establishments, which provide a vast array of convenience products and a medium assortment of shopper goods. Most retail goods are offered at moderate prices, or medium ticket sizes. it is often noted in Alaska and the lower 48 -17- HYET *PALMA, INC. that Seward is the only city in Alaska which has maintained its identity by having a traditional downtown. As noted by a recent article in the NEW YORK TIRES, "this small town on the Kenai Peninsula is a good choice for those wishing to sample the real Alaska." The Boat Harbor area serves as both a convenience shopping area for local residents and tourists and as a major destination marine resort for tourists. The Boat Harbor also serves as a major Alaskan commercial shipping and fishing center for Alaska's growing fishing and marine transport industries. While the Boat Harbor area is currently experiencing new business growth, the growth is oriented toward the protection of the area's marine orientation. The commercial corridor of Third Avenue is developing as a business link between the Downtown and the Boat Harbor area. The commercial development along the Avenue is relatively limited at this time, but recent restaurant, office, lodging and grocery operations have fostered an increased emphasis on the corridor for future development and, particularly, movement of commercial traffic. Each of the commercial areas gives Seward a different but well-rounded assortment of commercial facilities. Seward has a lengthy history of business stability and provision of service. As noted by the business survey: -18- HYETT•PALMA, INC. • 60% of Seward's businesses are operated as sole -proprietorships 0 66% of the businesses have been in operation for 3 or more years, while 47% have been in operation for 10 or more years • 42% of Seward's businesses are open 7 days per week • 76% of Seward's businesses have experienced an increase in sales over the past five years 0 83% of Seward's business owners live in Seward • 62% of the businesses are operated within buildings owned by the business owners Inventory of Businesses Following is the inventory of Seward's businesses located within the enhancement area. -19- HYETT•PALMA, INC. INVENTORY OF BUSINESSES SEWARD S COMMERCIAL AREAS 1988 SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CaDE SQ.FT. FULL PART Seward Sheet Metal Shop Third Avenue 3400 Quick Wash Laundry and Game Room Third Avenue 7200 House of Diamond Willow Third Avenue 5947 Book House Third Avenue 5931 Yukon Liquor Third Avenue 5921 Christaan's Restaurant Third Avenue 5812 Antique Shop Third Avenue 5931 Bay City Texeco Third Avenue 5541 Red Carpet Eagle's Nest Realty Third Avenue 6500 Sheryl Seese Bookkeeping Third Avenue 7300 TLC Income Tax and Bookkeeping Service Third Avenue 7300 Albertson's Refrigeration Third Avenue 1700 National Bank of Alaska Third Avenue 6000 Seward Title Agency Third Avenue 8900 -20- 350 5 1,000 4 Winter 10 Summer 1,820 4 1 200 1 500 1 850 1 2,400 5 1 500 1 1 HYET oPALMA, INC. SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CODE SQ.FT. FULL PART Terry's Chevron Third Avenue 5541 2 1 Nautical Chart Service Third Avenue 8900 Anderson Tug and Barge Third Avenue 4400 Seward Real Estate Third Avenue 6500 Lil' Kritters Day Care Third Avenue 8900 Air Tek, Inc. Third Avenue 8900 Seward Plumbing and Heating Third Avenue 1700 2 1 Breeze Inn Motel Third Avenue 7000 Breeze Inn Restaurant Third Avenue 5812 Sailing, Inc. Third Avenue 5551 Seward Machine Shop (Vacant) Fourth Avenue 3900 Niko's Fourth Avenue 5812 Tony's Bar Fourth Avenue 5813 Elk's Lodge Fourth Avenue 8600 5,000 5 1 Thorne's Lounge Fourth Avenue 5812 Alaska Shop Fourth Avenue 5331 7,000 6 1 Hair Creations Fourth Avenue 7200 554 3 Urbach's Clothing Store Fourth Avenue 5611 3 3 Seward Drugs Fourth Avenue 5912 2,000 3 1 -21- HYETTePALMA, INC. SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CODE SQ.FT. FULL PART Dick Beissner (Vacant Lot) Fourth Avenue Ann Shirley (Vacant Lot) Fourth Avenue Seward Bakery Fourth Avenue 5462 Werner's Family Center/Ace Hardware Fourth Avenue 5251 3,000 3 3 Apollo Restaurant Fourth Avenue 5812 5 1 Seward Trading Company Fourth Avenue 5411 5 2 Yukon Bar Fourth Avenue 5813 5 Seward Coffee Shop Fourth Avenue 5812 Bob's Market Fourth Avenue 5411 Brown and Hawkins Fourth Avenue 5651 3,000 1 3 Bardarson Studio Fourth Avenue 5999 1,200 1 1 In -House Video Fourth Avenue 5999 Marty's._Bargain Basement and Creative Canvassing and Sewing Fourth Avenue 5931 2,400 1 Martha's Corner Fourth Avenue 5947 430 1 Alaskan Gallery/ Dee's Original Alaskan Jewelry Fourth Avenue 5999 400 1 Karen's Cache Fourth Avenue 5947 2 2 -22- HYETT•PALMA, INC. SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CODE SQ.FT. FULL PART Ye Olde Country Store Fourth Avenue 5947 500 1 Seward's Coin Shop Fourth Avenue 5999 1 Showcase Barber Shop Fourth Avenue 7200 Fairweather Cafe Fourth Avenue 5812 B&C Sales and Pawn Shop Fourth Avenue 5999 Bruce Siemenski Fourth Avenue (Vacant Lot) DJ's Wheelhouse Fourth Avenue 5813 The Rainbow Shop Fourth Avenue 5999 900 1 1 JT's Ice Cream Parlor Fourth Avenue 5812 1 Parts, Inc. Fourth Avenue 5551 3.200 2 1 Forget -Me -Not Fourth Avenue 5699 2 2 Kawabe's Fourth Avenue 5947 1,000 2 Steve Macswain (Vacant Lot) Fourth Avenue Horizon's Travel Fourth Avenue 8900 Peking Restaurant Fourth Avenue 5812 1st National Bank Fourth Avenue 6000 7 Michelle's Fourth Avenue 800 3 -23- HYETT,@PALM& INC. SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CODE SQ.FT. FULL PART Pheonix Log Fourth Avenue 2700 4 2 Telephone Company Fourth Avenue 4800 Seward Building Supply Fourth Avenue 5.251 5,000 10 Seward Laundry and Dry Cleaning Fourth Avenue 7200 1,200 2 Murphy's Motel Fourth Avenue 7000 RV Park Fourth Avenue 4700 House of Diamond Willow Fourth Avenue 5947 1,000 2 Fish House/ Silver Salmon Cache Fourth Avenue 5551 5,000 1 17 Ray's Restaurant Fourth Avenue 5812 Harold Johnson (Vacant Bldg.) Fourth Avenue Quest Marine Fourth Avenue 5551 Dreamland Bowl Fifth Avenue 5999 3,000 1 Harbor Dinner Club Fifth Avenue 5812 Vacant Bldg. Fifth Avenue New Seward Hotel/Saloon Fifth Avenue 7000 1st Video Fifth Avenue 5999 -24- HYET oPALMA, INC. SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CODE SQ.FT. FULL PART Mt. Marathon Furniture Fifth Avenue 5712 864 1 Alaska Land Surveyors Fifth Avenue 8900 1 Western Auto Fifth Avenue 5251 Mall Railway Avenue 5999 Warehouse Railway Avenue 4200 Seward Music Railway Avenue 5733 1,000 2 Andrew Patapoff, Architect Washington St. 8900 575 1 1 Two -Way Radio Washington St. 8900 Seward Travel Washington St. 8900. Blackberry Kitchen Washington St. 5499 Pioneer Bar Washington St. 5813 Frontier Restaurant Washington St. 5812 3,000 5 Red Rooster Restaurant Adams Street 5812 Liberty .Theater Adams Street 5999 5,000 3 2 Van Gilder Hotel Adams Street 7000 9,100 3 2 Seward Cablevision Adams Street 4800 Post Office Madison Reed's Jewelry Ballaine Blvd. 5944 Gateway Gas/ Quick Stop Seward Highway 5999 5 5 -25- HYETf •PALMA, INC. SIC GROSS EMPLOYEES BUSINESS NAME LOCATION CODE SQ.FT. FULL PART ;t Bubba's Seward Highway 5812 8,000 2 12 Marina Hotel Seward Highway 7000 4,000 1 4 Bob's Market Seward Highway 5411 Seward Tesoro Seward Highway 5983 800 2 1 Foodmart Seward Highway 5411 Peninsula Ford Seward Highway 5511 1 1 Shoreside Petroleum, Inc./ Harbor Fuel Old Airport Rd.5541 7,000 6 1 Seward Fisheries 0900 20 275 Marathon Fuel Corporation Old Airport 5541 2,000 4 2 Seward Heavy Industrial Power old Airport 4900 3,500 3 1 Sunsel Alaska Corp. 5982 10 5 Bay Fuels 5984 3 Harbor Enterprises 5541 7 2 Seward Ships Chandlery 5551 12 Communications North Leirer 5551 2,300 4 Four Seasons Marine 5551 900 2 Metco, Inc. 6 10 -26- HYETT•FALMA, INC. RESULTS OF CUSTOMER/RESIDENT/BUSINESS SURVEY During the months of March and April, 1988, an extensive series of interviews was conducted among two response groups: customers of Seward's commercial areas and residents who live within Seward's primary and secondary trade areas. In addition, business owners within Seward commercial areas were surveyed. The business surveys were administered by the Seward Enhancement Association. The commercial area customer surveys were completed by the Association, with the assistance of Mr. Dan Campbell. The survey of trade area residents was completed by telephone by members of the Association. Survey results were tabulated by Hyett-Palma, Inc. There were 215 responses to the customer survey, 122 responses to the resident telephone survey, while 63 business owners responded to the business survey. The results represent a sampling of approximately 30% of the households in Seward's trade area and approximately 60% of the businesses in Seward's commercial areas. Following is an overview of the survey results. Customer Loyalty Seward's customers are extremely loyal to local businesses. The survey indicated that 83% of the local residents and customers and 90% of the local merchants shop Seward 2 or more -27- HYETT•PALMA, INC. times each week. In fact, 48% of the local residents and customers and 52% of the local business owners indicated that they shop Seward everyday. The primary reason for visiting Seward's commercial areas is to shop, as opposed to conducting other forms of business in the commercial areas. When asked where they do most of their shopping, 75% of the local residents and 68% of the local business owners indi- cated that they do most of their shopping in Downtown Seward and the Boat Harbor area. It has often been said in Seward that most people do their shopping in Anchorage. However, based on the results of the survey, only 22% of the local residents and customers and 32% of the local business owners indicated that Anchorage is their primary shopping area. Key Issues Seward residents and business owners were asked to express their opinions concerning the character of the community's commercial areas. Of those local customers and residents surveyed, 80% felt that Seward's salespeople were friendly, 67% felt that store hours were good and 64% felt that local businesses carry quality goods. Of the businesses surveyed, 68% felt that Seward's salespeople were friendly, 60% felt that store hours were good and 68% thought that businesses carried good quality merchandise. Parking, aesthetic quality, variety and price were seen -28- HYETT•PALMA, INC. CUSTOMER/RESIDENT/BUSINESS SURVEY RESULTS OF OPINIONS CONCERNING KEY ISSUES SEWARD, ALASKA TALLIES OF WHAT IS "GOOD" IN COMMERCIAL AREAS: FRIENDLINESS STORE HOURS QUALITY OF GOODS PARKING ATTRACTIVENESS OF COMMERCIAL AREAS ATTRACTIVENESS OF BUILDINGS VARIETY OF GOODS PRICE OF GOODS Pedestrian/Telephone Businesses 80% 68% 67% 60% 64% 68% 37% 27% 34% 35% 28% 24% 26% 35% 7% 43% TALLIES OF WHAT IS "VERY IMPORTANT" TO IMPROVE COMMERCIAL AREAS Pedestrian/Telephone Businesses CUSTOMER SERVICE 92% 84% CLEAN AND MAINTAIN STREETS, BUILDINGS AND PUBLIC AREAS 91% 83% CREATE JOB OPPORTUNITIES FOR LOCAL RESIDENTS 91% 76% YEAR-ROUND TOURISM 70% 76% PATRONIZE LOCAL BUSINESSES 69% 57% PUBLIC/PRIVATE PARTNERSHIP 67% 83% YEAR-ROUND SPECIAL EVENTS 64% 52% ENHANCE HISTORIC CHARACTER 53% 40$ LINK DOWNTOWN TO BOAT HARBOR AREA 52% 56% SERVE LOCALS FIRST, TOURISTS SECOND 36% 46% SOURCES: Seward Enhancement Association and Hyett-Palma, Inc., Washington, DC -29- HYETT•PALMA, INC. by both the customers and businesses as less than adequate. Of the customers and residents surveyed, only 37% saw parking as good, 34% felt that the commercial areas were attractive, 28% indicated that the commercial areas' buildings were attractive and only 27% thought -that the variety of goods was sufficient. Of the businesses surveyed, only 27% indicated that the commercial areas were attractive, 24% felt that buildings were attractive and 24% indicated that the variety of merchandise was good. An interesting point concerning the price of Seward's goods was revealed by the survey. When asked to rate the price of goods, only 7% of the customers and residents felt that prices were good, while 43% of the business owners indicated that prices were good. Those responding to the survey were asked to rate the importance of the enhancement goals adopted for Seward's commercial areas by the Seward Enhancement Association. The majority.of the customers, residents and business owners felt that the following goals were very important: • MAINTAIN HIGH LEVELS OF CUSTOMER SERVICE • CLEAN AND MAINTAIN STREETS, BUILDINGS AND PUBLIC AREAS • CREATE JOB OPPORTUNITIES FOR LOCAL RESIDENTS -30- WETTePALMA, INC. • PATRONIZE LOCAL BUSINESSES RATHER THAN SHOPPING OUT-OF-TOWN 0 ENHANCE TOURISM, YEAR-ROUND • IMPROVE THE COMMERCIAL AREAS THROUGH THE SUPPORT OF THE PRIVATE SECTOR AND THE LOCAL GOVERNMENT SINCE SEWARD'S COMMERCIAL AREAS ARE COMMUNITY ASSETS The majority of those customers and residents surveyed felt that the historic character of buildings should be enhanced in Seward's commercial areas and that there should be a link between the Downtown and Boat Harbor area. Neither the customers, residents nor business owners felt that serving local residents should be given priority over tourists. This underscores the fact that local residents and business owners feel that tourism is a critical element of Seward's economy. New Businesses Desired Customers, residents and business owners were asked what types of new stores and services they desired for Seward's commercial areas. Following is a listing of the ten most often mentioned businesses, in decreasing order of the number of times mentioned: • CHILDREN'S CLOTHING STORE • DRUG STORE -31- HYETT•PALMA, INC. 0 SPORTING GOODS STORE • SHOE STORE • BOOK STORE • DEPARTMENT STORE • WOMEN'S APPAREL STORE • AUTO REPAIR SERVICES • VARIETY STORE • HOBBY STORE Private Enhancement Initiatives As noted by the survey, 51% of the business owners surveyed indicated that they planned improvements to their buildings and/or businesses during the first year of Seward's Commercial Area Enhancement Program. The total cost estimate of planned improvements was approximately $1,000,000. The planned".improvements cited ranged from minor repairs and main- tenance to construction of new buildings and major expansions of existing space. Stability of Local Businesses Seward has an extremely stable local business community. Of those business owners responding to the survey, 66% have -32- HYETTOPALMA, INC. been in business for 3 years or more. More significantly, 47% have been in business for 10 years or more. The majority (59%) of those business owners surveyed,have operated from the same location for 3 years or more. Most local business owners own the commercial buildings in which they are located. Of those surveyed, 62% of the business owners indicated that they operated their business from their own building. The majority (56%) of Seward's businesses have experienced increases in sales during the past year, while 76% indicated that their sales have increased during the past five years. Support of Enhancement Efforts By Local Businesses Local businesses support current efforts to enhance Seward's commercial areas. When asked if they would be willing to invest in the enhancement of Seward's business areas, 84% of those responding said YES! -33- HYETT•PALMA, INC. CALCULATION OF SALES POTENTIAL The retail sales leakage of the commercial areas was computed and an estimate of potential new sales was determined by store type. Based on the analysis of sales leakage, an estimation of potential new sales which could be made through, business expansions or new business openings was undertaken with results expressed in total dollar volume and square footage of floor area. An analysis of,most types of retail businesses was also completed for the trade areas by CACI of Fairfax, Virginia. In addition, an estimation of total taxable sales to tourists, which may be expected within Seward, is also presented. Retail Sales Leakage Analysis The purpose of retail leakage analysis is to identify retail sales dollar flow into and out of a local economy. if the analysis indicates that a commercial area is not capturing its share of retail sales based on the spending habits of households within the commercial area's trade area, then the area is "leaking" or loosing retail sales dollars to other commercial areas. If the analysis indicates that a commercial area is capturing a higher share of retail sales than can be reasonably expected to come from households within its trade area, based on the spending habits of the households within its trade area, then the commercial district -34- HYE'R•PALMA, INC. is experiencing "inflow" or is gaining sales dollars from other commercial areas. Based on the findings of the leakage analysis conducted for Seward's commercial areas, the area is currently experiencing significant inflow in most retail categories. The results of the leakage analysis are presented in the table on the following page, entitled -- CALCULATION OF RETAIL SALES LEAKAGE. The tremendous amount of inflow is based on several factors. First, Seward's commercial areas are the regional shopping centers for most of the Southeastern portion of the Kenai Peninsula. Second, the community experiences a significant inflow of retail sales during the tourist season. And, third, due to the relatively isolated nature of the lower Kenai Peninsula, during the Winter months most people within Seward's primary and secondary trade areas look to the Seward commercial areas to satisfy most of their shopping needs, particularly convenience shopping goods. From an economic perspective, inflow, particularly as high as is represented in Seward, is a very positive indicator that an area is recognized as a regional center and that the area has established a critical mass of retail operations. Seward's Downtown currently contains a compatible cluster of businesses offering shopper and convenience goods. The Boat Harbor area contains an existing and growning cluster of complementary marine -35- HYET *PALMA, INC. CALCULATION OF RETAIL SALES LEAKAGE SEWARD S COMMERCIAL AREAS 1988 1 2 3 4 5 6 TOTAL SALES TOTAL SALES SALES SALES TOTAL SALES/ POTENTIAL FOR LEAKAGE CATEGORIES HOUSEHOLDS HSD./YR. (2X3) TRADE AREAS (4--5) Grocery Store Merchandise 1,100 2,100 2,310,000 3,618,000 1,308,000+ Restaurants (food only) 1,100 1,150 1,265,000 1,755,000 490,000+ Department Store Merchandise 1,100 1,700 1,870,000 3,982,700 2,112,700+ Apparel Store Merchandise 1,100 1,200 11320,000 1,635,400 315,400+ Household Furniture 1,100 950 1,045,000 225,200 (819,800) Drug Store Merchandise 1,100 885 973,500 11536,800 563,300+ SOURCES: 2. CACI of Fairfax, Virginia (March, 1988) 3. United States Department of Labor, Bureau of Labor Statistics, CONSUMER EXPDENDITURE SURVEY RESULTS and United States Department of Commerce, Bureau of the Census, U.S. CENSUS OF RETAIL TRADE 5. CACI of Fairfax, Virginia (March, 1988) -36- HYETT*PALMA, INC. related businesses. The Third Avenue commercial corridor is developing as a transition corridor with a compatible clustering of both convenience shopper facilities and service businesses. The only major segment of the retail market which is currently experiencing significant outflow is in the area of household furniture. Based on the leakage analysis, the commercial areas are currently experiencing a potential loss of $819,800 annually in household furniture sales. Based on a potential sales volume of $150.00 per square foot, it can be reasonably assumed that Seward may have a market for a furniture/appliance business which operates within a building containing at least 5,000 gross square feet. However, based on Seward's past experience with appliance and furniture sales, it is known to be difficult for businesses in Seward to compete with Anchorage stores selling these higher ticket appliance and furniture items. Sales Potential Analysis In conjunction with this market profile of Seward's commercial areas, a sales potential analysis was commissioned from CACI of Fairfax, Virginia. The organization has developed a computer program which projects the market growth potential of a defined commercial district. The model compares the growth potential of the commercial district with the growth potential of the economic region in which the commercial district is located. The model presents findings relative to an area's market -37- HYET oPALMA, INC. potential (MARKET POTENTIAL INDEX -- MPI) and an area's market growth potential (MARKET GROWTH INDEX -- MGI.) The MPI indicates the per capita sales potential of`°a commercial area. The MGI indicates the annual sales potential of a commercial area. The model uses a base of 100.0 for all projections. Based on the CACI analysis of Seward's commercial areas: • SEWARD'S MARKET POTENTIAL INDEX (MPI) IS 108.2, WHICH MEANS THAT SEWARD'S COMMERCIAL AREAS' PER CAPITA SALES POTENTIAL IS 8.2% GREATER THAN THE ECONOMIC REGION WITHIN WHICH IT IS LOCATED. • SEWARD'S MARKET GROWTH INDEX (MGI) IS 104.21 WHICH MEANS THAT THE TOTAL ANNUAL SALES POTENTIAL GROWTH RATE OF SEWARD'S COMMERCIAL AREAS IS 4.2% GREATER THAN THE ECONOMIC REGION WITHIN WHICH IT IS LOCATED. Based on the CACI sales potential analysis for Seward, the retail businesses/products which are projected as having the highest potential for growth are: MPI (Base = 100) • JEWELRY 131.9 • SPORTING GOODS & EQUIPMENT 131.2 • STEREO EQUIPMENT 118.6 • APPAREL 117.7 • RESTAURANTS 116.8 0 DEPARTMENT STORE MERCHANDISE 116.7 0 HOUSEHOLD TEXTILES 113.4 -38- HYETT*PALMA, INC. • RECORDS, TAPES, CASSETTES 112.1 •. MISC. FURNISHINGS 110.8 • COSMETICS 109.5 • HARDWARE 108.9 • HOUSEHOLD FURNITURE 107.7 • HOUSEWARES 107.6 • MAGAZINES, PAPERBACKS, BOOKS 107.3 • TELEVISIONS 106.4 • FOOTWEAR MERCHANDISE 106.0 0 SMALL APPLIANCES 105.0 Taxable Sales to Tourists Between 21% and 26% of Seward's taxable sales are generated from tourists. As noted by the attached table, during the five year period -- 1983 to 1987 -- gross taxable sales within Seward equaled $119,028,000. When examined by quarter, the highest grossing quarters were quarters 3 and 4, which are the quarters within which the vast majority of tourists visit Seward. Quarters 1 and 4 may be considered "local" buying months. During the five-year period, total taxable sales for these two quarters were $47,238,000, for an average of $4,723,800 per quarter. If the quarterly average is projected for four quarters each year for the five year period, it can be assumed that local residents were responsible for approximately $94,476,000 of the -39- HYETT•PALMA, INC. TA<':'BLE SALES -- 1983 THROUGH 1987 SEWARD, ALASKA (000's) PER QUARTER YEAR 1ST 2ND 3RD 4TH 1983 3,657 5,044 6,097 4,019 1984 4,142 5,710 6,781 5,438 1985 4,553 7,176 7,931 51572 1986 4,885 7,740 8,501 5.046 1987 4,885 7,851 8,959 5,041 TOTALS PER QUARTER 22,122 33,521 38,269 25,116 SOURCE: City of Seward -40- WYEiT*PALMA, INC. taxable sales during the five-year period. The difference between the local sales and total sales for the entire five-year period -- $24,552,000 -- represenfs 21% of the total taxable sales which were generated, in all probability, from tourists. An indication of the growing strength of the tourist economy is further evidenced by an examination of taxable sales for 1987. Using the same method of analysis described above, for 1987, taxable sales to tourists were approximately 26% of the total taxable sales for the year. -41- HYET *PALMA, INC. IDENTIFICATION OF POTENTIAL NEW BUSINESS TYPES AND BUSINESS EXPANSIONS Based on the findings of this market profile, a demand exists for the introduction of certain new businesses or the expansion of existing businesses within Seward. The types of businesses most in demand, and their location, follow. It should be noted that this listing of businesses is intended to identify additional businesses which are needed for the areas indicated or to identify a potential opportunity for the enhancement of existing businesses. This listing recognizes existing businesses within the community and it is assumed that existing businesses will continue to serve the community within the immediate future. This listing also assumes that all existing businesses in Seward's enhancement area will strive to maintain their operations consistent with the demands of the local residents and the growing tourism economy. As a minimum, this includes: a high level of customer service; clean and well -maintained buildings; quality merchandise offered at reasonable prices; and maximum support for all business operations within Seward's commercial areas. In all cases, emphasis must be placed on QUALITY, SERVICE and DEPENDABILITY. -42- WYETT•PALMA, INC. Downtown Seward • CHILDREN'S CLOTHING STORE (MEDIUM PRICED) • SPORTING GOODS STORE (MAJOR EMPHASIS ON OUTDOOR SPORTS AND EXERCISE EQUIPMENT) • WOMEN'S APPAREL (MEDIUM PRICED CASUAL AND DRESS) • HOUSEHOLD TEXTILES • HOUSEHOLD FURNISHINGS, INCLUDING KITCHEN, BEDDING, LIGHTING AND MISCELLANEOUS • ELECTRONICS, INCLUDING STEREO AND COMPUTER FACILITIES • AUTO REPAIR PICK-UP SERVICES • COSMETICS STORE • OFFICE SUPPLY STORE • BOOKS, RECORDS, TAPES AND COMPACT DISCS STORE • OFFICES • TRANSPORTATION SERVICES, ORIGINATING IN THE BOAT HARBOR AREA Small Boat Harbor Area • TRANSPORTATION SERVICES, LINKING THE BOAT HARBOR TO THE DOWNTOWN AREA • RECREATIONAL VEHICLE REPAIR AND SUPPLIES • MARINE RELATED FOOD SERVICES (PREPARED FOOD AND PACKAGED FOOD PRODUCTS WHICH PLACE MAXIMUM EMPHASIS ON SEAFOOD PRODUCTS FROM LOCAL WATERS) • COMMERCIAL AND RECREATIONAL MARINE SUPPORT SERVICES (REPAIR AND SUPPLIES) • PLEASURE FISHING SUPPLIES AND EQUIPMENT • CONTINUED EXPANSION OF COMMERCIAL AND PLEASURE FISHING AND MARINE TRANSPORT OPERATIONS -43- HYET OPALMA, INC. Third Avenue Corridor ;, CONTINUED DEVELOPMENT OF LOW -INTENSITY COMMERCIAL OPERATIONS, INCLUDING OFFICES, PERSONAL CARE AND SERVICES -44- HYETT•PALMA, INC. Action Agenda of the Seward Enhancement Association May 1, 1988 - April 30, 1989 Volume III, January 1, 1989 -1- HYETT*PALMA, INC. Introduction The Seward Enhancement Association is a private sector organization dedicated to the economic enhancement of Seward's commercial areas. The Association is committed to forming a partnership with the City of Seward and to working in close collaboration with affiliated organizations, such as the Seward Chamber of Commerce. Through such working relationships, the Association intends to accomplish its mission of enhancing Seward's commercial areas so that they reinforce the already high quality of life enjoyed in Seward, and become more profit- able for all, by better serving local residents and visitors alike. During the week of April 11-15, 1988, the Seward Enhance- ment Association defined its Action Agenda for the one-year period of May 1, 1988 to April 30, 1989. This was accomplished through a series of strategic thinking sessions led by the prin- cipals of Hyett-Palma, Inc. Implementation of the Action Agenda was monitored and further detailed through a series of sessions led by Hyett-Palma, Inc., from August 22-26, 1988, and from December 11-15, 1988. The Action Agenda is summarized in this document. -2- HYEii•PALMA, INC. Focus Area of the Seward Enhancement Association The Seward Enhancement Association has defined its focus area as the geographic area that includes Seward's downtown, the boat harbor and the Seward Highway/Third Avenue corridor leading to the downtown. Vision Statements of the Seward Enhancement Association Through interviews, group meetings and community forums, a Vision Statement was defined for each of the three parts of the focus area. These follow. 0 Downtown: The downtown of Seward must continue to be the economic center of the city where tradition- al commercial activities, which primarily serve the residents of Seward, are concentrated. • Boat Harbor: Commercial activity occurring in the boat harbor area must be restricted to uses which are marine -oriented, rather than allowing traditional commercial uses which are typically found -3- HYEiT•PALMA, INC. in a downtown. t Seward Highway/Third Avenue Corridor: This area must be physically upgraded to provide a more positive image of the city to visitors approaching from this route. -4- t a& a JE) 1W "IN MT. BW50N 4.z7+ J f,zeST jM �} fcf FIOMt ♦+, FOREST 41 L BfNNV J MthIOR� IMORL COT Op1AT[HE!py_ PEAK LAK(s TRAIL �4,Sb6((�0 Lln�atX s; VA Flg5r r. LAKE � - PAR. 1lF 1 T y Ri+CE POINT ,MI.MARATMON ;. RACE STARTS •'• CHILDREN'S, i PARK - 'BEAR Mt, o<e 4,003 1 �ro Low(u pn,wT SON CEMErd :\ °ARk. `O (AN D) L 'RESVRKkCTION RIPER. --,— (To cxlr &LAclrrt,) S►� Pwo AO Dlvr to AIRFOR7 !"0 M'T ^Lj jl 5 z65 SEWARD MABINE INDUSTRIAL. CENTER �suR >� C E, v Avrtc o R CTIO b cveytwA� :. =1 BA ENHANCEMENT AREA wA5HIN4To� �(A'eliEST/M1JfLANTS= sworY,�7 tbp � m for right) Miml MALL,3LWARD COFFEE 5HOP, PALACE,FAIRWiATNER CAFE,THORM3, LNtARGEMEItTor s[%4R0bAKER)f,PIZ%AAPeUgNAR8cR0IN9ERCW6 1�ggI1'7' DOW"TOWN ARth Q: OROCER" lCofylimnn- e the ' 4towt sox jo+ SewardyVaska, 99664.907- zzg � HYETT•PALMA, INC. Goals of the Seward Enhancement Association In December 1987, working with the Seward Visitor's Committee, the Seward Chamber of Commerce and the City of Seward, the following goals were defined for the focus area. • Identity/Character: Each of Seward's commercial areas should be enhanced to project its own local identity or character. The identity of the downtown should be that of Seward's Alaska history. The identity of the boat harbor should be that of Seward's maritime history. The identity of the Seward Highway/Third Avenue should be that of its role as the gateway to the city. • Linkage: The downtown and the boat harbor area should be considered to be two parts of one economic whole, and, therefore, be developed in ways that allow them to benefit from each other. To accomp- lish this, these areas should be physi- HYETT•PALMA, INC. cally linked through a transportation system. • Physical Image: The focus area should be well -maintained and clean. Efforts should be made to en- hance the area through beautification, facade, sign and streetscape improvements that are consistent with the character and identity being stressed in each area. • Focus: The commercial activity of Seward should satisfy the needs of the local population as well those of the visitor to Seward. • Local Market: A "Shop Seward" campaign must be launched, since a year-round economic base of resi- dents is critical for Seward's commercial vitality. • Visitor Market: Year-round tourism should be enhanced by developing activities to pamper visitors and inform them of Seward's considerable natural, scenic, community and commercial assets. -7- HYETT•PALMA, INC. • Promotion: Year-round special events and activities should be developed to draw local residents and visitors to the focus area. • Job Creation: Commercial activity should be enhanced in ways that provide employment opportunities for local high school graduates as well as year-round residents. • Customer Service: The highest levels of customer service and personal attention should be provided by Seward's businesses in recognition of the vital importance of customer satisfaction to the economic strength of the community. • Accessibility: Maximum advantage should be taken of the many transportation modes that converge in Seward in order to bring visitors and goods and services to the community. • Implementation: The enhancement strategy for the focus area should be action -oriented, and spear -headed HYETT*PALMA, INC. by a private sector organization that forms a partnership with the City of Seward and that collaborates with local affiliated organizations. �'m HYETT*PALMA, INC. Results of 1988 Surveys In March and April of 1988, the Seward Enhancement Association administered a survey of Seward residents, customers and business owners. The results of the surveys were tabulated and analyzed by Hyett-Palma, Inc. The number of survey responses represented 30% of the households in Seward's trade area and 60% of the businesses in the focus area. The results of the surveys revealed four points of great importance to the Seward Enhancement Association in developing its Action Agenda. These follow. • Support of Goals: The majority of residents, customers and business owners surveyed supported the goals adopted by the Seward Enhancement Association, saying they were "very immportant" in the efforts to improve Seward's commercial areas. • Customer Loyalty: Seward's residents, customers and business owners are ex- tremely loyal to local businesses. A full 83% of residents and customers -10- HYETToPALMA, INC. surveyed, as well as 90% of business owners surveyed, shop in Seward 2 or more times each week. • Business Stability: Seward has an ex- tremely stable local business community. The majority of business owners surveyed have been operating their business for 3 years or more, own the building in which the business is located and have experienced an increase in sales during the last year. • Support of Enhancement Efforts: Local business owners enthusiastically support current efforts to enhance Seward's com- mercial areas. When asked if they would be willing to invest in the enhancement of Seward's business areas, 84% of those responding said YES! -11- HYETT•PALMA, INC. Twelve Month Agenda of the Seward Enhancement Association The Seward Enhancement Association has divided its first twelve-month agenda into four tiers that are based on the cycles of the local economy. A "tier" approach was chosen to allow the Association to more quickly implement tangible activities and to monitor the success of those activities on a continual basis. The tiers, and the focus of each, are shown below. • Tier 1 Time: -May 1-June 30, 1988 Focus: -Prepare for Visitors -"Company's Coming" • Tier 2 Time: -July 1-August 31, 1988 Focus: -Pamper Visitors -Define Tier 3 Agenda • Tier 3 Time: -September 1-December 31, 1988 Focus: -Launch "Shop Seward" and "Home for the Holidays" Campaigns -Formalize Organization -Fundraise -Hire Staff Director -Define Tier 4 Agenda -12- HYETT•PALMA, INC. • Tier 4 Time: -January 1-April 30, 1989 Focus: -Continue "Shop Seward" -Prepare for Visitors -Review/Reinforce Association -Evaluate Year 1 and Define Action Agenda for Year 2 -13- HYETT•PALMA, INC. COMPLETED: Tier 1 Tier 2 and Tier 3 Activities ACTIVITIES CHAMPIONS DATE COMPLETED TIER 1 1. Elect Permanent Board Interim Board May 1 2. Hold Community Clean -Up Herman Leier May 15-22 3. Provide Off -Street Park- Larry Werner June 1 ing Facility and Encour- age its Use by Downtown Business Owners and Employees 4. Place Pull -tabs in Stores Don Sutherland June 1 as Fundraiser 5. Install Two "Welcome" John Glasser July 1 Banners -1 in Downtown -1 in Boat Harbor TIER 2 6. Research Transportation Neil Cameron July 1 Link between Downtown & Boat Harbor by Private Entrepreneur 7. Hold Shotgun Raffle Jim Parrish July 5 8. Design and Install Flags Christy Johnson July 30 to Street Poles in Down- town, Boat Harbor and Connecting the two areas along..Fourth Avenue 9. Produce and Distribute Christy Johnson July 30 "61 Free Things" Flyer Leslie Simutis 10. Hold Business Seminar and Hyett-Palma, Inc. Aug. 24-25 In -Store Consultations 11. Obtain Media Coverage of Board On -going Enhancement Activities -14- HYETT•PALMA, INC. ACTIVITIES TIER 3 12. Design Customer Service Pledge 13. Advocacy to City Council 14. Hire Staff Director 15. Launch S.E.A. Membership Drive 16. Take Down "Welcome" Banners & Street Pole Flags & Store for Next Year. 17. Distribute Action Agenda 18. Sponsor Thanksgiving Turkey Shoot 19. Hold Thanksgiving Cash Give -Away 20. Hold Christmas Turkey Shoot DATE CHAMPIONS COMPLETED Hyett-Palma, Inc. Sept. 15 Larry Werner Sept -Oct. Andy Patapoff Deanne Nelson & Oct. 15 Board Larry Werner October Jerry Lorz Oct. 15 Board & Staff Oct. 31 Neil Cameron Nov. 19 Larry Werner Nov. 19-23 Neil Cameron Dec. 17 -15- HYETTePALMA, INC. Tier 4 Action Agenda of the Seward Enhancement Association January 1-April 30, 1989 COMPLETION PROGRAM AREA ACTIVITIES DATE ----------------------------------------------------------------- ----------------------------------------------------------------- Physical 1. Build 6 Benches Jan. -Mar. Chair: 2. Expand No. of Pole Banners Jan. -Mar. J. Lorz 3. Leave Up X-Mas Lights Jan. -Feb. 4. Begin Greening Program Jan. -Mar. 5. Design New Entrance Sign Jan. -Mar. to City 6. Plan Spring Clean -Up April 7. Plan "Paint the Town" April 8. Hold "Fix -Up" Workshop April by Hyett-Palma, Inc. 9. Get Out "Welcome" April Banners & Pole Banners Economic 1. Hold In -Store Consulta- April tions by Hyett-Palma Visitors 1. Contact Travel Agents January Chair: re: Cruise Line Cos. L. Simutis 2. Develop Slide Show for January use on Cruise Ships 3. Produce Video for use Feb. -April in Boat Harbor 4. Schedule Small Downtown April Activities Around Cruise Ship Callings 5. Fly Large Helium Balloon April over Downtown 6. Reprint "61 Free Things" April Flyer and Include List of Summer Activities Shop Seward 1. Sponsor 2-3 Events Around Jan. -April Chair: Holidays Occurring in C. Johnson Tier 4 -16- HYETTePALMA, INC. COMPLETION PROGRAM AREA ACTIVITIES DATE ----------------------------------------------------------------- ----------------------------------------------------------------- Current Issues 1. Recruit Volunteers Jan. -April Chair: 2. Advocacy to Seward Trade Jan. -April L. Werner Board re: Aquarium 3. Advocacy to P & Z re: Feb. -April Directing Commercial Growth 4. Support Molly Trolley Jan. -April 5. Continue Fundraising Jan. -April Visibilit & Documentation 1. Implement PR Campaign On -Going Chair: 2. Continue Membership On -Going L. Weathers Drive 3. Document SEA Accomp- On -Going lishments 4. Produce Monthly SEA On -Going Newsletter -17- HYETT•PAIMA, INC. Funding Goals of the Seward Enhancement Association The Seward Enhancement Association has set a fundraising goal of $21,000 for the period of May 1, 1988 to April 30, 1989. This amount will cover hiring a part-time staff director, oper- ating an office in the focus area and implementing the Action Agenda defined by the Board of Directors. The Seward Enhancement Association has established a fund- raising strategy which will enable the organization to success- fully reach its goal. The funding strategy includes soliciting donations from corporate sponsors, small businesses and indivi- duals, as well as sponsoring fundraising events and producing products for sale. The Association's Board of Directors will assume the re- sponsibility of raising these funds with the technical assis- tance of the organization's staff director. -18- HYETT•PALMA, INC. Seward Enhancement Association Board of Directors Representation Number of Affiliation Representatives 1 City Council 1 Chamber of Commerce Board of Directors 1 Seward Senior Center 3 Focus Area Business/ Property Owners 1 Maritime 2 At -Large TOTAL: 9 Members _19- HYETTePALMA, INC. Seward Enhancement Association Board of Directors Name Representation Telephone Larry Werner, President Business Owner 224-3044 Jerry Lorz, Vice -President Business Owner 224-3415 Andy Patapoff, Secretary Chamber of Commerce 224-8923 Board of Directors Neil Cameron, Treasurer Business Owner 224-8771 Christy Johnson Business Owner 224-3040 Herman Leier Senior Center 224-5965 Clem McCann Maritime 224-3322 Deane Nelson Business Owner 224-3689 Leslie Simutis City Council 224-5602 Seward Enhancement Association Staff Director Lorali Weathers 224-3044 -20-