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EDC 08-11-2009 City of Cupertino Economic Development Committee Regular Meeting August 11, 2009 1.CALL TO ORDER At 4:35 pm Kelly Kline called the meeting to order in Conference Room A at City Hall. 2.ROLL CALL City Staff: Kelly Kline, Aarti Shrivastava, Carol Atwood, David Knapp, Ralph Qualls, Mark Linder Chamber: Bob Adams, Antonio Flores, Shawna Holmes City Council- Kris Wang, Mark Santoro Planning Commission: Marty Miller Guests: Jennifer Li, Ruby Elbogen Introductions were made around the table. 3.APPROVAL OF MINUTES Ralph Qualls moved to approve the minutes of the regular meeting on May 12, 2009. Aarti Shrivastava seconded and the motion passed unanimously. 4.ORAL COMMUNICATIONS - None 5.NEW BUSINESS A.Cupertino’s Fiscal Strategic Plan The subject was introduced by Kelly Kline and handed over to Administrative Services Director Carol Atwood to present. Atwood started off by talking about the Budget and General Funds. Revenues have decreased due to the recession. At the same time, there have been consistent trends with expenditures based on Cupertino’s Capital Improvement Campaign (projects like the library and Stevens Creek Corridor Renovation). The largest sources of funding for Cupertino’s $42 million budget are Sales & Property Tax. This is true even though Cupertino collects only 7% of those taxes, which is less than in other communities. Atwood then talked about General Fund expenses, which include maintenance of trees, streets, and buildings. The largest expense for most cities is the Police and Fire Department but in Cupertino it is Public Works. The city has managed its expenses well. A big part of which is that Cupertino only pays for Police and Fire services when the city needs them. Atwood moved on to the comparison of Cupertino and neighboring cities. She first compared the ratio of staff to population. Cupertino has the second lowest ratio at 1 to 333. Its business to business sales tax is robust compared to other cities, but it lacks diversification. The city’s General Retail and Food Product Sales Taxes have been declining, which means the city needs to work on having a healthier mix. The next item Atwood compared was Cupertino’s Utility User Tax, which is second to lowest compared to other cities that have UUT. A ballot measure will go forward in November to secure this revenue. The goal is to tax neutral. Cupertino’s TOT is within range of other cities at 10%. Palo Alto recently increased its TOT to 14%. Atwood then talked about solutions outlined in the Fiscal Strategic Plan which was instituted in 2004, when we were predicting a $2.5 million budget shortfall (per year). Currently, council members Wang and Mahoney serve on the Fiscal Strategic Plan Committee. Solutions include creating new sales tax offices, partnerships with other cities, instituting a hiring freeze (nine positions are currently frozen), and deferred maintenance. Atwood concluded with other potential solutions that can be added on to the Fiscal Strategic Plan. For example, other cities have implemented a vehicle impact fee. She also mentioned commercial rezoning opportunities, and finished off with asking the commission for other suggestions. B.Economic Development Manager Report Kelly Kline first updated the committee on grand openings that recently occurred. T.G.I. Friday’s reopened under new ownership. The food court at Cupertino Square/Vallco has two new tenants. Subway is already open and a new Indian th restaurant is coming soon. Bonjour Crepe opened on August 6. Kung Fu Academy and Orthodontics have recently settled in next to Red Mango, helping to fill up the mixed-use space at CMC Park. Kline then talked about companies that are coming soon. Saga, a high-end hair salon will be opening next to Tartini’s. Aqui will open in January at the location where Harvest used to be. It’s going through an interior remodel. The AMC theatre at the Cupertino Square is converting one of its theatres to an IMAX format. Verde Tea and Wingstop will both be opening soon at Marketplace Center. The Keewah Bakery (Chinese) is coming to Civic Park next to Curry House. Kline updated the committee about old business. She mentioned that the office space vacancy is now up to 14%, which is still low for the Valley. We are currently the #1 position in terms of price. Symantec on Stevens Creek Boulevard is going through a due-diligence process to sell their two buildings. It may be another 30 days until the process is complete. The Mervyns site is still in a holding pattern. Blackberry Farm has enjoyed a successful opening with many catering events. Kline also mentioned that Cupertino Landing has achieved LEED Silver Status. In other news, the Chamber’s AABC collaboration with SCORE is making th progress with a business class to be held on October 7 in the Community Hall. Kline said that two businesses in Cupertino (Coffee Society is one) have partnered with NOVA, for summer youth employees that get paid through NOVA. Kline highlighted the Restaurant Association article in the Cupertino Courier, which talked about Cupertino being a “dining destination”. The Sign Ordinance will be updated to be more business friendly. A community meeting has already been held. Cupertino Square/Vallco has officially foreclosed. Gramercy has hired Jones Lang LaSalle as property managers. Kline concluded by reporting that Rosebowl is currently under construction. 6.OLD BUSINESS A.Cupertino Square Update See Economic Development Manager Report B.Cupertino Restaurant Association Update See Economic Development Manager Report C.Housing Element Update Aarti Shrivastava reported that HCD has asked for minor clarifications on the draft Housing Element report. This is good news. None of the sites have been questioned. An official letter is expected soon. D.City Projects Ralph Qualls reported that both the Mary Avenue Bridge and Blackberry Farm are now open. Blackberry Farm has greatly improved, and is attracting many people. The Mary Avenue Bridge is also very popular, well-used, and stunning at night. They were both successful projects. 7.CURRENT DEVELOPMENT REPORT A.Development Activity Report Presentation Aarti Shrivastava reviewed the most current copy of this report, which was distributed to the committee. B.Upcoming Development Projects for Planning Commission/City Council The upcoming projects matrix was included in the packet handed out by Kelly Kline at the beginning of the meeting. Changes in status are highlighted. Also, Kline distributed Commercial District Maps created by Piu Ghosh. An additional item related to Catherine Chen, who was interested in building Adobe Terrace, was discussed. 8.MISCELLANEOUS COMMITTEE UPDATES Bob Adams reported that five new members have joined the Chamber. He said that the Diwali Festival is garnering a good number of sponsorships, but there’s always room for more. Finally, upcoming mixers at Cupertino Inn (Sept.), KeyPoint Credit Union (Oct.), TGI Friday’s (Nov.) were announced. 9.FUTURE ITEMS/CALENDAR th The next meeting will be on November 10, 2009 in Conference Room A at 3:30 p.m. thth Kelly Kline mentioned that the Fall Festival will be on September 19 and 20. 10.ADJOURNMENT The meeting was adjourned at 5:00 p.m. _____________________________ Kelly Kline Economic Development Manager