City Beat
Takeaways from Economic
Development and Housing Forums
O
n August 24th, the Gilroy General
Plan Advisory Committee (GPAC)
presented stakeholder forums on
housing and economic development issues
relevant to the City’s 2040 General Plan
Update process. The forums were comprised
of industry leaders in each topic area who
shared their thoughts on population and
job projections, market trends, and innova-
tive ideas that are applicable to Gilroy. The
robust discussions resulted in a wealth of
information and ideas for consideration by
the GPAC as they develop alternative land-use
plans for analysis in the General Plan process.
HOUSING PANEL
The Housing panelists included three
developers with regional experience around
the Bay Area: Alex Sanchez (ROEM Develop-
ment Corporation, Executive Vice President),
Joe Head (SummerHill Land, President),
and Paul Ring (The Core Companies, Vice
President of Development). The panel was
moderated by Jim Heid, President and
Founder of Urban Green, a consulting firm
focusing on sustainable development and
land use planning.
KEY TAKEAWAYS FROM THE
HOUSING DISCUSSION INCLUDED:
• Characteristics developers look for in
cities when considering projects include
available land planned for housing,
clear and predictable regulations, and
support from staff, decision-makers,
and the community.
• Developing market-rate higher density
housing in Gilroy is challenging under
current market conditions because
market rents in Gilroy are not high
enough to cover the costs to build
housing (land, labor, and materials
costs and impact fees)
• Successful higher density housing
needs to be carefully integrated into the
58
surrounding neighborhoods, include
mixed-income units, and provide value
to the community
• Providing market rate housing
affordable to “middle income” wage
earners (80% - 120% of median) is not
possible without some form of public
subsidy, and there aren’t State and
Federal funding programs to fill the
gap for middle-income housing.
• Excessive housing costs impact the
economy as a whole: people spending
large percentage of their income on
housing spend less on other necessities;
the community loses skilled workers
who have to leave the area to find
affordable housing.
• Future market-rate housing
opportunities in Gilroy in the next
few years are likely to be mainly in the
single-family density range (up to about
10 dwelling units/acre).
ECONOMIC DEVELOPMENT PANEL
The Economic Development panelists
comprised four representatives, each with a
different economic area of focus: John Roush
(Paso Robles Downtown Association, Board
Member), Robert Earnest (Gilroy Premium
Outlets, General Manager), Rich Truempler
(The Sobrato Organization, Vice President of
Real Estate Development), and Mark Sanchez
(Colliers Commercial Real Estate - South
County, Senior Vice President). The panel
was moderated by Doug Svensson, President
of Applied Development Economics.
KEY TAKEAWAYS FROM THE ECONOMIC
DEVELOPMENT DISCUSSION INCLUDED:
• Gilroy Premium Outlets are marketed
internationally, including Asia and South
America and function as a tourism
destination. National chain stores appear
to be impacted more by internet shop-
ping than outlet malls. Simon Property
GILROY • MORGAN HILL • SAN MARTIN
NOVEMBER/DECEMBER 2017
Group, which owns and manages the
Gilroy Premium Outlets, does not have
any plans for major changes, beyond
aesthetic improvements.
• Vacancy rates in the industrial and
office markets in Morgan Hill and
Gilroy are very low, indicating
increasing interest in land and
buildings, due to reduced inventory
and rising costs in Silicon Valley.
• Gilroy’s location at the crossroads of
Highways 101 and 152 create the
optimal area for goods distribution
centers (UNFI, Pepsi here, PFG coming).
• Gilroy is not expected to attract hi-tech
companies or corporate headquarters,
but possibly hi-tech support companies
or the manufacturing division of large
tech companies.
• Characteristics commercial/industrial
developers look for in cities when
considering new development include
available land planned with flexible
land use policies all owing a variety of
uses, while at the same time providing
clear, predictable regulations; available
housing is also a valuable asset.
• The Main Street America program (Paso
Robles) provides valuable support and
guidance to cities working to revitalize
older and historic commercial districts
to build vibrant neighborhoods and
thriving economies.
• Gilroy should continue to capitalize
on wine tourism, including attracting
more winery tasting rooms and related
businesses to downtown.
• The previous development impact
fee reduction program in Downtown
helped spur development.
• Gilroy needs to improve the treatment
of gateways to the city to enhance and
draw visitors to downtown.
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