DOC

ECONOMIC PROSPERITY REPORT 2000

By Jessica Nichols,2014-03-29 00:13
9 views 0
Other small businesses, such as restaurants and bars, serve both the local population and PLX Technology, Inc. PLX Technology, Inc. The site is to be used by residents and businesses to identify areas of interest, and for use

    ECONOMIC PROSPERITY REPORT 2000

    City of Sunnyvale Economic Prosperity Staff:

    Karen L. Davis, Economic Development Manager Brice McQueen, Management Analyst

    Christy Gunvalsen, Management Analyst Ronda Rodriguez, Staff Office Assistant

    The following contributed to this report:

Sunnyvale Chamber of Commerce

    Munroe Consulting Inc.

    Brian Stott, Intern

The goal of the City of Sunnyvale’s Economic Exhibit A: ECONOMIC DEVELOPMENT -

    Prosperity Program is to foster a prosperous A WORKING DEFINITION

     community, a vibrant business environment, a

    From a “private perspective,” economic diversified and broad tax base, and a downtown with development is the process of creating wealth vitality. The City’s role in achieving this outcome is through the mobilization of human, financial, to serve as a community strategist knowledgeable physical, and natural resources to generate about economic trends, anticipating economic marketable goods and services. changes, and proactively supporting businesses in a From a “public perspective,” economic dynamic economic environment (see Exhibit A). development is an investment program

     designed to leverage private sector capital in

    such a way as to induce actions that have a The City’s Economic Prosperity Program is designed

    positive effect on the level of business to enhance Sunnyvale’s position in the innovation-activity, employment, income distribution, based/knowledge-based environment that and fiscal solvency of the community. characterizes Silicon Valley. The program tracks The local economic development process is a customer [business] satisfaction and perceptions, process of deliberate intervention in the regional occupancy level comparisons, service normal economic processes of a particular delivery needs and impacts of global trends and other locality to stimulate economic growth by activities on the local business community. This making it easier or more attractive. This

    program builds on the commitment to learn what is process is neither exact nor fully predictable

    and is more an art than a science. important to businesses, and when the City’s Economic development is the process for participation is desired and/or required to effectively creating economic prosperity that, in turn, address those issues. The program will also build on enhances quality of life in a community Silicon Valley’s focus on innovation, to create an through growth in the amount of goods and environment in Sunnyvale that encourages and services available to the consumer for private enables entrepreneurial activity and attracts quality use, and by providing the necessary resources jobs to the City. for government to meet its responsibilities.

    The New Economy CALED Bulletin, November 1999

During the past two decades, there has been a steady transition from an economy based on material

    production to a knowledge and information-based economy. The “Old Economy” was driven by

    four key industries automobiles, machine tools, construction and retailing. The key industries of

    the “New Economy” include semiconductors, computers, software, the Internet and

    telecommunications.

Sunnyvale’s economy is inextricably linked to the high-tech economy of Silicon Valley that is

    currently driving a significant part of California’s and the nation’s economic growth. Between 1992

    and 1998 the Sunnyvale economy showed strong growth. City revenue grew at an annual rate of

    3.7 percent in this period. The total number of jobs increased by 8.8% from 71,845 in 1992 to

    78,175 in 1998. Wages increased by 12.8%, while taxable sales increased by 6.9 percent. During

    this same period, third quarter unemployment dropped by more than half from 5.9% in 1992 to

    2.7% in July 1999. By all accounts, Sunnyvale’s economy appears robust and prospects for the

    city’s future are bright. Sunnyvale’s future economic outlook, however, depends, in part, on how

    the city positions itself for the 21

    st Century. This will be determined by the decisions it makes and

    the actions Sunnyvale takes that impact the mix of industries, as well as its quality of life.

    Page 1

Business Profile

    Business Climate: The City of Sunnyvale has a national reputation for being a well-managed,

    “business friendly” city. A recent survey of Sunnyvale’s business climate found that 83% of the

    local business leaders who responded to the survey believe that Sunnyvale is a great place to do

    1business and that the city’s economy is doing well. The vast majority felt that Sunnyvale was a

    good location because of its favorable tax environment (83%), access to important markets and

    consumers (80%), access to labor and professional pool (77%), easy access to important suppliers

    (64%), and existing critical mass of companies (56%). Overall, the respondents felt that the City is

    currently doing a good job in fostering and improving the local business climate.

    In comparison to other Bay Area and Northern California cities, Sunnyvale maintains a low

    property tax rate and fee structure while providing a high quality of municipal services. An annual

    comparison of the cost of doing business in selected California cities shows Sunnyvale to be one of

    the lowest cost locations in terms of local taxes and fees.2

    Economic Diversity: Companies with less than 100 employees make-up approximately 97% of

    Sunnyvale’s total number of businesses. The vast majority of these small businesses have less than

    25 employees. Almost two-thirds of Sunnyvale’s small businesses are in either the service sector or

    retail trade. Most of the city’s small businesses are concentrated in business and professional

    services, healthcare, personal services, retail trade, wholesale trade (durable goods), and the finance,

    insurance, and real estate sector. These small businesses serve the resident population as well as

    provide services to the city’s larger companies. Other small businesses, such as restaurants and bars,

    serve both the local population and employees of major corporations.

    Sunnyvale also has a large number of home-based businesses. According to the City’s business

    license information approximately 2,500 businesses are home-based. These home-based businesses

    employ approximately 3,296 workers (or 1.3 persons per business). Although small firms comprise

    the largest number of businesses in Sunnyvale, two-thirds of the jobs are in large firms with 100

    plus employees (see Exhibit C). Twenty-three of the twenty-six largest major employers are high-

    technology companies (see Exhibit B).

    Company Industry Company Industry Actel Corporation Communications Lockheed Martin Missiles & Space Aerospace Advanced Micro Devices Electronic Mfg Maxim Integrated Products Electronic Mfg Amdahl Corporation Computers National Semiconductor Corp. Electronic Mfg Applied Signal Technology Electronics Philips Semiconductors Inc. Electronic Mfg Argosystems, Inc. Aerospace Sandisk Corp. Computers Bay Networks Internet Spectrian Corp. Electronic Mfg Camino Medical Group Healthcare Stanford Telecommunications Communications Computer Curriculum Corp. Software Supertex Electronic Mfg Cupertino Electronic Construction Toshiba American Electric Electronic Mfg Cylink Corporation Communications Trimble Navigation Instruments Mfg Dionex Corp. Bioscience TRW/Electro Magnetic Systems Electronic Mfg Hewlett Packard Co. Computers Volex Interconnect Systems Electronic Mfg Integrated Systems Software Westinghouse Electronic Systems Electronic Mfg Exhibit B Largest Sunnyvale Employers

     1 Strategy Research Institute, Assessing Sunnyvale’s Economic Prosperity Program and its Business

    Climate, September 1999. 2 Kosmont, Cost of Doing Business Survey San Francisco/Peninsula, 1997.

    Page 2

Exhibit C: Although small firms comprise the largest number of businesses in Sunnyvale, two-thirds of the jobs are in

large firms with 100 plus employees.

Page 3

     Keeping Pace with Innovation: Several of Sunnyvale’s small businesses represent some of the

    fastest growing companies in the United States. The Deloitte & Touche Technology Fast 500 1recognizes the outstanding contributions of fast-growing technology companies nationwide. There

    were seven Sunnyvale companies on the 1998 Silicon Valley Technology Fast 50 list and nine

    companies again in 1999. There

    were ten Sunnyvale companies

    on the Technology Fast 500 list

    2in 1998 and 1999 (see Exhibit

    D) One Sunnyvale company

    Albin Engineering Services

    1998 Technology Fast 50* and Fast 500 1999 Technology Fast 50* and Fast 500 was named by Inc. Magazine as PointCast* Vitria Technology* one of the 1999 Inc. 500 Fastest Network Services* Network Appliance, Inc.* Growing Private Companies. Arbor Software Corp.* TMT, Inc. * The September 1999 Fortune Prism Solutions* International Network Services* Exhibit D Silicon Storage Technology, Inc.* InnerDyne, Inc.* Magazine List of America’s Harmonic Lightwaves, Inc.* Hyperion Solutions Corporation* One Hundred Fastest Growing Companies, included two Sunnyvale firms Network Appliance (No. Power Integrations, Inc.* Silicon Storage Technology, Inc.* 4) and Mercury Interactive (No. 36). These gazelles, which include Internet, software, and other Artisan Components Abaxis, Inc.*

    QuickLogic Corporation Power Integrations, Inc.* high technology industries, represent the transformation occurring within Sunnyvale’s economy. PLX Technology, Inc. PLX Technology, Inc. These companies are part of the New Economy.

    Venture capital investment is another indicator of keeping in step with the “new economy” – supporting young, rapidly growing companies that have the potential to develop into significant

    economic contributors. “Companies that have passed the screen of venture capitalists are innovative,

    are entrepreneurial, and have growth potential. Typically, only firms with potential for

    exceptionally high rates of growth over a five- to ten-year period will attract venture capital. These

    firms are usually highly innovative in their technology and market focus.”

    3

     1999 Venture Capital Venture investments reached a record $12.98 billion Distribution of Funds in Sunnyvale3 Quartersin the third quarter of 1999 according to Venture

    Economics and the National Venture Capital SemiconductorAssociation. Although much of the growth is being 3%ComputersExhibit E driven by Internet-related investment, all industry 5%Misc.sectors are receiving increased funding.0%4 Sunnyvale Business ServicesSoftware/Internet6%25%companies received 13% of the venture capital

    transactions and 12% of the funding in Santa Clara

    County in 1998. This increased to 15% of all Biotech, Pharmaceuticals,Medical Productstransactions and 17% of funding in Santa Clara 15%5 County in 1999.

    Venture capital investments in Sunnyvale mirrored Consumer Products6%those of Silicon Valley. Joint Venture’s 2000 Index of

    Silicon Valley showed the greatest investment in the

    areas of communications (28%) and software/ internet Communications40%(33%), for a combined total of 61%, compared to 65%

    in Sunnyvale (see Exhibit E).__________________ 11999 Silicon Valley Technology Fast 50 - http://www.jointventure.org/ 2 Deloitte & Touche LLP -http://www.dttus.com/fast500 3Joint Venture’s 2000 Index of Silicon Valley, page 15 4National Venture Capital Association - http://www.nvca.org/ 5San Jose Mercury News, November 14, 1999 Page 4

Contributions to Community Quality of Life

    FY 2000 General Fund Revenues

Sunnyvale’s business

    community contributes Sales Taxapproximately 56% of 31.2%Non-Businessall revenues to the

    44.1%City’s General Fund

    (see Exhibit F),

    providing a strong

    economic base for

    provision of City

    services. This, in turn, Permits & License Feestranslates into a high TOTProperty Tax2.2%quality of life for 9.0%9.5%

    residents as well as

    businesses through the Utility User TaxBusiness Licensefunding of parks, street 3.7%0.3%improvements, library

    and essential services such as public safety.

     Exhibit F: Sales tax (business-to-business and retail) is the largest source of revenue Businesses Supporting (31%) to the General Fund. Other business-related revenues include property tax (non-residential), transient occupancy tax, utility user tax, permits and license fees and business Our Community license fees.

    Sunnyvale businesses contribute to the community beyond the provision of taxes and fees to the

    City. The City has encouraged greater civic involvement by businesses in community activities of

    their choosing. Some examples of their involvement are highlighted below.

In celebration of Sunnyvale’s rich agricultural history, corporate donors have enabled the “living

    history” Orchard Heritage Interpretive Exhibit to become a reality, with groundbreaking to take

    place in 2000. Corporate donors include Citibank, JSR Microelectronics, Union Bank of California,

    and Applied Materials. The project also includes funding from the McKenna Foundation and the

    Valley Foundation.

    Advanced Micro Devices: AMD has a corporate policy of setting aside one percent of its pretax profit for charitable causes. The largest single grant ever given by the company, $1 million dollars,

    went toward the construction of the Columbia Neighborhood Center. In addition, AMD has

    established education partnerships with two Sunnyvale Middle schools.

    Amdahl Corporation: Amdahl’s “Read to Succeed” program involved more than 13,000 students at 350 schools last year. Amdahl also provides one-on-one technical support to teachers through the

    “TeacherLink” program.

    National Semiconductor: “Global Connections,” an Internet training initiative includes leader-led

    and online training as well as awards for innovative use of the Internet. More than 2,000 teachers

    have completed the course training over a three-year period. $1 million dollars will be distributed in

    award money for innovative Internet teaching.

    Page 5

     Synopsys: Over the course of the next three years, Synopsys will contribute $3 million dollars to

    local science programs and school districts in support of teachers, their students, and their programs.

    LeBoulanger Bakery/Café received Sponsor of the Year award and Ray Montalvo, Director of

    Marketing, received Volunteer of the Year award from the California Parks and Recreation Society

    District IV for their efforts and partnership with the City of Sunnyvale’s Teen Program called “The

    Fish Bowl”. The program focuses on providing an outlet for teens in the community to socialize,

    listen to a variety of entertainment, and to show off their own talents. Sunnyvale Lumber and the

    Maple Tree Inn are also supporting this program.

    This year’s recipient of the Mayor’s Award of Excellence went to Charles Olson and Family, C. J.

    Olson's Orchards. Charlie Olson and his family throughout the century have been consistent

    contributors to the Sunnyvale community, and have supported education and community activities

    of all kinds.

    Suzi Blackman was voted this year’s “Outstanding Businessperson of the Year”. As President and

    CEO of the Sunnyvale Camber of Commerce, Suzi has provided leadership and energy to the

    business community of Sunnyvale.

    Environmental Achievement Award Winners hosted by the City of Sunnyvale: Advanced Micro Devices Major Industrial User

    Radiation Detection Company and LJL Biosystems Small Business RMG Enterprises Automotive Facility

    Patson’s Press, Inc. Silver Generating Facility

    Real-Time Innovations, Inc.; Philips Semiconductors; and Hope Rehabilitation Services

    Commercial Waste Reduction and Recycling

Economic Prosperity Program Accomplishments

The City Council approved the Economic Prosperity Work Program in February 1999. Some of the

    most notable accomplishments of the past year are highlighted below.

Economic Analysis: Munroe Consulting Inc. was retained by the City of Sunnyvale to assess the

    structure of the city’s economy and to identify key industry clusters that will drive the city’s

    economy in the 21

    st century. Two background studies were conducted “Assessing Sunnyvale’s

    Economic Prosperity Program and its Business Climate” and “Assessment of the Sunnyvale

    Economy.” These two reports together with economic information from regional organizations

    (e.g., Joint Venture: Silicon Valley, Bay Area Economic Forum, etc.) and input from Sunnyvale

    stakeholders will serve to validate and fine-tune the strategic economic vitality work plan for

    Sunnyvale.

The focus of the work program for the coming year will be driven by the needs of the business

    community. Emphasis will be in the areas of understanding the fundamentals of the Silicon Valley

    economy, marketing and outreach for City services, and involvement in regional and local programs.

    Specific actions, based on input from the business community (Chamber of Commerce, large and

    small businesses representing a broad range of industry groups) will be presented to the City

    Council at a future meeting.

    Page 6

Business Census 2000: Sunnyvale has over 8,000 companies registered to do business in the city. Each year, the City conducts a “business census” as part of the business license renewal process,

    asking companies to update their business profile. Business licenses are a critical source of current

    information regarding the composition of our business community. For 2000, the City restructured

    the business license renewal process to increase our information base on businesses in Sunnyvale.

    The form requests information on company web sites and contact information that is intended to

    facilitate better communication between the City and businesses. The City asked businesses to

    respond to optional questions that will allow us to monitor the business climate in the city and make

    adjustments as necessary to continue to be responsive to the needs of the business community.

In looking to the future…

    ? The City will be developing an online process for business registration.

    ? The City will provide an opportunity for a web page presence and link for all Sunnyvale

    businesses.

    ? A company registered to do business in Sunnyvale will receive customized information on

    programs that relate to their business activities based on the size and type of business.

    The Access Silicon Valley web sitea connection to small

    business information and the wealth of resources in the

    Silicon Valley. Access Silicon Valley has brought together

    small business resource providers from the government,

    non-profit, education, and corporate sectors onto one web

    site to help people find the help they need to start and grow

    their small business. In 1999, the Sunnyvale small business community identified the online “incubator” as an area of critical need. Soon after, the City and the

    Chamber offered support to West Valley College to create Access Silicon Valley www.accesssv.org.

    This web site incubator was created by a grant from the California Community College Economic

    Development Network and the State Chancellor’s Office of the California Community Colleges.

    Members of the Sunnyvale Chamber provided guidance in the design of the site and the City

    provided financial support for the start-up of the online service.

E-Commerce was identified as a key issue by the City

    Council in 1999. The Sunnyvale Chamber of Commerce and

    the City of Sunnyvale teamed up to successfully develop a

    web site www.sunnyvale-chamber.com to give every Sunnyvale business an opportunity to have a web site to

    increase their visibility in the community. The project

    encourages retail establishments in Sunnyvale to increase

    their visibility on the Internet with the option of conducting

    business transactions over the web. The goal of this project

    has been to find ways to assist Sunnyvale companies in being

    a “player” in the world of e-commerce and maintain their storefront operations. The Sunnyvale Visitor Information

    Program provides information on weather, hotels, eating and drinking establishments, services and more. The site is to be used by residents and businesses to

    identify areas of interest, and for use as a resource for referring others to Sunnyvale establishments.

    Page 7

    Business Forums: In pursuing a better understanding

    of the dynamics of the Silicon Valley economy, the Transportation Land Use City of Sunnyvale has embarked on a series of

    business forums that will enhance communications

    between policy-makers and the businesses that are

    Economic impacted by their decisions. The key elements of the Prosperity economy land use economics, transportation,

    housing and educational issues will be discussed to

    improve our understanding of the drivers of our Housing Educationeconomy and how policies support and impact the business community.

    Business Visitation Program: The corporate visitation program has been an important tool for building a positive relationship between the community and

    businesses. The visits are designed to get to know individual companies, obtain more detailed

    information on issues, to let companies know about City programs, and provide them with a

    personal contact within the City. It also provides an opportunity to better understand both the

    benefits and challenges of working in Silicon Valley. Not surprisingly, the key issues often at the

    center of discussion are the high costs of living and doing business in the Valley, transportation

    challenges, workforce development, and adequate infrastructure to support business growth.

    During the past year, visits were

    made to thirty-three companies

    Exhibit G: 1999 Corporate Visitations (see Exhibit G). Staff makes Actel AMD Essex Environmental visitation selections based on sales Alpha Graphics Larkspur Landing Advanced Component Labs Cephied Frontier Global Home Depot tax and property tax trends, VSIS Total Capital Management Synopsis companies that are identified as Valin Corp. Applied Materials Pali Graphics Sunnyvale Medical Crescent Villa Nursing Philips Silicon Valley having potential expansion issues, Clinic Home Center the fastest growing companies, and DNS Sunnyvale Auto Dealers IDEC Trimble Navigation Lockheed Martin Rabbit Office Automation other sources. Companies also Hilton Hotel Nanometrics Network Appliance occasionally invite the City to meet JSR Microelectronics Yahoo! Albin Engineering Identix Cougar Components Applied Signal Technology, with their representatives. Inc. Participants in the visitations include the Mayor, City Manager, and economic development staff

    members. The program is coordinated with the Sunnyvale Chamber of Commerce. Downtown Revitalization: Downtown Sunnyvale is a place where people visit to shop, dine, walk

    and visit with one another. What’s coming in downtown will please residents and businesses alike:

    ? The Silicon Valley Walk and Entertainment Village a major expansion and renovation of

    the Town Center Mall; including outdoor dining, AMC movie complex (to open in Mid-2001),

    new and interesting shops, outdoor strolling restaurants, and move. Construction is scheduled to

    begin in early 2000 and the target date for opening is November 2000.

    Page 8

? New CalTrain Station new station building, new 400 car parking structure, improved bus and

    shuttle drop-off facilities, enhanced pedestrian/bicycle access all designed to provide a

    convenient transportation hub in the downtown core. Construction will begin in April 2000 and

    is expected to be completed by February 2001.

    ? Housing several housing projects downtown will create opportunities for those who enjoy

    living “in the heart of the city,” close to transportation, jobs, shopping and entertainment.

    ? Historic Murphy Avenue more convenient parking and an extension of Murphy Avenue will

    connect this charming street of shops and restaurants to the Town Center Mall. ? Washington/Mathilda Development a public plaza for civic events and three first-class

    office buildings are under review. Groundbreaking on the first phase is anticipated for summer

    2000.

    Exhibit H Total Construction Valuation

    $268,601,577$300,000,000

    $239,806,936

    $216,452,109$250,000,000

    $167,117,730$162,941,144$200,000,000

    $137,597,414$130,281,008$115,834,200$150,000,000

    $100,000,000

    $50,000,000

    $-FY 91/92FY 92/93FY 93/94FY 94/95FY 95/96FY 96/97FY 97/98FY 98/99

    Development Activity: FY 98/99 marked another banner year with a high level of real estate

    development activity. The construction valuation for FY 98/99 was $268.6M. The construction that was permitted exceeds any previous year. FY 99/00 appears to be setting additional construction

    activity records (see

    Exhibit H). There are

    many new projects in

    the planning process, Exhibit I:: Projected Major Projects - FY 99/00 which are expected to Developer Type of Project be under construction Higgins Development Partners 797,000 sq. ft. multi-story office buildings before the end of the Jay Paul Co. 650,000 sq. ft. multi-story office buildings

    fiscal year (see Exhibit Mozart (Downtown) 460,000 sq. ft. multi-story office buildings Town Center Mall Major additional of retail, commercial, and movie theaters I). Cal-Train Station New train station and parking garage Olson Orchard New 300-unit apartment complex and 60,000 sq. ft. of retail Speiker Properties 80,000 sq. ft. multi-story office building

    H&R Christensen 141,000 sq. ft. multi-story office buildings

    Page 9

Report this document

For any questions or suggestions please email
cust-service@docsford.com