Creating The Places Where Jobs Grow

METRO CORES:
CREATING AND SUSTAINING THE PLACES WHERE JOBS GROW

Gregg Logan, Managing Director, January 25, 2011

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

 Economic development
 “Job infrastructure:
depends on many
factors:   Employment Cores -
Placemaking
 Leadership •  Strengthening Existing Cores
 Vision •  Planning for New Cores
–  Greenfield
 Education
–  Infill and Redevelopment
 Adaptability
 Creating, sustaining the
places where jobs grow

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

METRO CORES AND ECONOMIC DEVELOPMENT
 Regions composed of a hierarchy of
Cores, or “centers”
  30% to 40% of jobs, including highest
paying, locate primarily in these Cores
o  The number, quality, characteristics of Cores in a
region influences job growth
  Anticipate where Cores are needed,
facilitate (re)development
o  Predictability: know the reasons they grow in
specific locations, plan for it
  Understand criteria for creating/sustaining
quality job Cores
  Provide the features, amenities,
infrastructure required


METRO CORE EXAMPLES
REGIONAL JOB PLACES


METRO CORES: REGIONAL JOB FOCAL POINTS
  Activity centers
  Large concentration of employees, especially the highest paying
“export” oriented jobs
  Tend to locate about five miles apart, near major transportation nodes
  Understanding the number, composition, size, and location of Metro
Cores in a region
  Framework for understanding metropolitan growth trends
enhancing planning for economic development


METRO CORES: REGIONAL JOB FOCAL POINTS
  Unique attributes distinguish metropolitan regions
  Yet striking similarities in terms of development
  “Rules” relative to their location, evolution
  Consistent types of “Centers” or employment “Core’s” across
regions
  High correlation between number of Cores and total Jobs
  On average 38% of jobs, especially highest paying, locate in these
Cores


TOTAL JOBS CORELATED TO NUMBER OF CORES
Number of Employment Cores Relative to Total
Employment
Selected Metropolitan Areas

Correlation:
Statistically significant correlation= more
More “centers” between
number of centersjobs number of jobs
and


SOURCE: RCLCO
6

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

  Number of jobs per Core
surprisingly consistent
  Metros with highest employment,
more jobs per Core
  Largest metro areas (in Jobs),
often more mature areas, have
o Larger big city downtown
o (Older cities) better transportation
network, grid
  Jobs per core related to number
of interstate intersections
  Similar characteristics,
predictability, can be planned for

6 TYPES OF JOB CORES
SHARE SIMILAR CHARACTERISTICS ACROSS REGIONS
CORE TYPE DESCRIPTION SAN DIEGO REGION’S CORES

Urban Centers •  Cultural, financial, and often governmental centers Downtown San Diego
•  Typically largest concentration of high-density office
Catalytic Core •  Locations determined by individual actors, e.g. Torrey Pines/UTC/UCSD,
governments, corporations, universities Miramar Air Station
SeaWorld

Industrial Core •  Locate around major transportation, major freeways and Rancho Bernardo, Sorrento
interstates, rail lines, airports, and seaports Valley, Kearney Mesa, Poway,
Carlsbad, San Diego Airport,
•  Competitively priced land San Diego Waterfront, Otay
•  San Diego its R&D/Flex use more than warehousing/ Mesa Border
distribution or manufacturing
Favored Quarter •  Fans out from downtown in direction of dominant regional Carmel Valley, Mission Valley,
growth parts of Torrey Pines/UTC/
Office Core UCSD
•  Follows executive housing concentrations
•  High-end office space often along the region’s principle
interstate
Historic Satellite •  Regions grow incorporating smaller cities and towns that El Cajon, Escondido
Cities/Towns were once free standing entities
•  Older commercial stock, smaller employment base, but
•  Can grow into more regionally important cores
Retail Cores •  Retail cores lacking regional serving/office-oriented
employment


8

THE FAVORED QUARTER
CORES GROW WHERE KEY INGREDIENTS EXIST

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

9

SAN DIEGO: JOBS CONCENTRATE NEAR EXECUTIVE HOUSING
LABOR FORCE HOUSING IS TO THE SOUTH AND EAST
Darker red = higher average Single-Family Home Sales Price
San Diego County, California
Employment
Cores
Greater than $600,000
$450,000 to $600,000
$300,000 to $450,000
$150,000 to $300,000
Less than $150,000

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

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

10

Small Region (<1.5M Jobs) Core Characteristics
Small Regions (Employment Below 1.5 Million)
Average Number of Cores 8
Size Range (#Jobs) of Cores: 15,000-58,000
Average Size of Cores in
29,000
Excluding CBD:
Average % of Employment
38%
Within Cores

Source: RCLCO


11

LARGE REGION CORE CHARACTERISTICS

Large Region (Employment Above 1.5 Million)
Average Number of Cores 14
Size Range (# Jobs) of Cores : 47,000-74,000
Average Size of Cores
53,000
Excluding CBD:
% of Employment Within
38%
Cores

Source: RCLCO


12

Predicting Growth
Three Core Types Drive Growth

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

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

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


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

Existing
Employment
Cores

Emerging
Employment
Cores
Likely New
Employment
Cores
SOURCE: RCLCO RCLCO January 2011. All rights reserved, reproduction by permission only.

14

APPLYING THE CENTERS ANALYIS
 Connecting for Global
Competitiveness
•  Tampa Bay Partnership, MyRegion
Orlando
– Identifying the economic centers
– Link via transit and 30 year spatial
vision
 Orange County – Innovation Way, a
New Center
•  County and major land owners to planning
new major employment center
 Lake Nona – Medical City
•  City of Orlando and land owner creating a
new major employment center

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

 Is a new center
needed?
 Detract from existing
centers?
 OR will a new “Center” in
the Northwest Quadrant
impact downtown?
 Plan:
  Strengthen existing centers
  Add new center on Northwest
Quadrant
 Conclusion: New Centers needed
even as existing centers grow


PHOENIX – RE-USE OF MESA PROVING GROUNDS

GM PROVING GROUNDS
Utilizing “Centers Analysis” for
the former GM Mesa Proving
Grounds; can it become a new
regional job center?

SUPERSTITION VISTAS
finding the balance between
Market Demand and Sustainable
Development

Can Superstition Vista’s lead with
jobs? What catalysts would be
required? Can it evolve into a job
center?


SAN DIEGO: 15 EXISTING EMPLOYMENT CORES
AND 4 MORE DEVELOPING CORES
MAP 2008 TOTAL 2050 TOTAL
1 KEY CORE TYPE OF CORE EMPLOYEES EMPLOYEES
1 Camp Pendleton Catalytic/Military 30,960 35,460
2 Carlsbad/Palomar/Vista Industrial 41,300 59,400
High Tech
3 Rancho Bernardo 41,500 51,900
Industrial
E1 4 Poway Industrial 31,200 41,000
5 Carmel Valley Office 17,900 21,800
Torrey Pines/UTC/
E2 6 Catalytic 106,100 126,300
2 UCSD
E3
High Tech
7 Sorrento Valley 53,300 63,800
Industrial
8 Miramar Air Station Catalytic/Military 33,400 38,600
9 Kearny Mesa Industrial 87,300 104,300
3 10 Mission Valley Office 52,600 64,900
11 San Diego Airport Industrial 28,300 33,700
5 7 4 12 Downtown San Diego Urban Core 78,200 95,800
13 NAS North Island Catalytic/Military 14,800 19,800
6
8 14 San Diego Waterfront Industrial 81,600 104,700
E4 15 Border Industrial 17,200 66,500
9
E1 Oceanside Industrial Industrial 17,200 29,700
11 E2 San Marcos Catalytic 26,200 43,100
10
E3 Escondido Industrial 30,600 37,500
12
E4 El Cajon Industrial 25,000 35,200

14
13

15

SOURCE: RCLCO

18

ECONOMIC GROWTH HAS BEEN ENHANCED BY INVESTMENTS IN
IMPORTANT CATALYSTS
MAP
9 KEY CATALYSTS
Tourism
1 Convention Center & Waterfront
2 Balboa Park & San Diego Zoo
5 17 3 Sea World
4 4 San Diego Wild Animal Park
5 Lego Land
Military
6 NAS North Island/Coronado
7 32nd St. Naval Station

16 8 Miramar Air Station
14 15 9 Camp Pendleton
8
13
12
Research & Development
10 University of San Diego
11 11 San Diego State University
3 10
2 12 University of California San Diego
1
6 13 Salk Institute
7
14 Torrey Pines
15 Scripps Research Institute
16 Sanford Burnham Institute
17 California State University San Marcos

19

SAN DIEGO:
FOUR MAJOR INDUSTRY SECTORS PROVIDE DIVERSITY

INDUSTRY EMPLOYEES ECONOMIC IMPACT
76,000 Military
Military $16.1 Billion
14,000 Civilian

Life Sciences and Biotechnology 40,000 $9.2 Billion

High Tech and Communications 39,000 $16 Billion

Tourism 150,000 $18 Billion

SOURCE: SDMAC; San Diego Regional Economic Development Corporation RCLCO January 2011. All rights reserved, reproduction by permission only.

20

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

➤  Existing Job Cores/Centers nearing capacity
➤  Constrained land availability (environmental protection)
  Limited greenfield sites for where future Centers will develop
  New growth areas likely to be re-development
➤  Anti-growth sentiment
➤  Housing “un”-affordability
  Best jobs northside, attainable housing southside
➤  State of California fiscal and regulatory liabilities


21

PLANNING FOR NEW CENTERS
➧  Infill or Greenfield? Both.
  Infill often more attractive to communities
•  More efficient use of transportation investments,
infrastructure
•  Reduce driving, environmental impacts, sometimes
less costly to provide services
•  Placemaking, walkability, as catalyst
  Greenfield less costly to the developer Stapleton, Denver

•  Lower land costs
•  Fewer financing barriers
•  Less expensive infrastructure (e.g. less transit, open
parking)
•  Responsive to consumer preferences for lower density
  Do “better greenfield”?
•  More compact, walkable, centers and corridors,
connected Mueller, Austin

ABOUT RCLCO

Economic
Development Services
  Metropolitan Growth Trends
Analysis- Employment Centers
  Market and Feasibility Studies
RCLCO specializes in real estate economics,
  Fiscal/Economic Impact Analysis strategic planning and management consulting,
  Economic Development and and advisory services for real estate investors and
Revitalization developers, public agencies, financial institutions,
  Value Capture Forecasting/Transit-
Oriented Premium Analysis and non-profit organizations.
  Affordable/Workforce Housing
  Public/Private Partnership
Structuring
  Smart Code Review
  Strategic Planning
  Litigation Services


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Creating The Places Where Jobs Grow

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