Development flexes its muscles


Asking the city’s Business Assistance and Housing Services
Department how successful they are at attracting and retaining
businesses in the current economy is like asking a tugboat captain
how he fares in the high seas during a storm.

Asking the city’s Business Assistance and Housing Services Department how successful they are at attracting and retaining businesses in the current economy is like asking a tugboat captain how he fares in the high seas during a storm.

The answer is as scattered and unspecific as the city’s role in the economy.

“We don’t control the demographics, we don’t control the population,” said Garrett Toy, the department’s director. “We don’t control what the land developer is looking for or what the property owner is asking to sell the property for. We’re just a small factor.”

Morgan Hill attracts businesses with its affordable location south of San Jose with large business parks available for rent and a workforce with a higher than average education. These are some of the features considered by Del Monaco Specialty Foods and Flextronics, two companies that will occupy more than 630,000 square feet combined when they open this year. The two will bring the city’s business vacancy rate down by a combined 5 percent, Toy said.

Another success is Wal-Mart, which will open a hybrid grocery and department store in Cochrane Plaza in the fall.

But Toy’s not claiming victory. Any positive to Morgan Hill’s economic development isn’t a complete win for his department.

“It’s kind of a Catch-22,” he said. “In good years, you could look at all these good things happening for cities, but we’re a very small factor for a business decision to come to town.”

The city has no control over most points against Morgan Hill, like California’s state taxes. If a company chooses to locate its operations in another state altogether, it’s hard to blame the city alone, Toy said.

Other companies, like Burlington Coat Factory and Black Angus Steakhouse, considered Morgan Hill locations but after internal number crunching, decided the city didn’t have the critical mass needed for them to succeed, Toy said.

Just like that tugboat, the best Morgan Hill can do is position itself: making small adjustments here and there that could make all the difference in the bigger picture. They reach out to businesses, but they can’t twist arms.

So, after hiring Tammy Brownlow as senior project manager last January, the department embarked on a new marketing campaign, more aggressive business retention efforts and amped up their presence at trade shows and the like.

The Business Assistance and Housing Services department mainly acts as a liaison to businesses, providing them with demographic information and lists of potential locations and connecting them with property owners and other city officials. The other half mainly administers the city’s affordable housing program. The economic development program of the BAHS, constitutes about $1 million annually.

The most prominent achievement is the Development Services Center, a one-stop processing shop at the corner of Peak and Main avenues just north of City Hall.

Morgan Hill Chamber of Commerce Board President Tim Hendrick said the center was “a very big plus.”

“That will really help fast track, from our perspective,” he said. Hendrick said the city has worked hard to change its image of being a slow-motion permitting center. “Businesses want to be up and running as soon as they can. The city has really cut the time it’s taking.”

Councilwoman Marby Lee said the city is doing as much as cities are able to do.

“I think there’s only so much government is supposed to do,” Lee said. “It’s supposed to foster an environment that is streamlined and good for businesses.”

Other than that, the city should stay out of the way, Lee said.

Councilman Greg Sellers said it’s hard to quantify the city’s success in economic development.

“It’s hard to quantify why a business didn’t leave. That should be considered economic development as well,” he said. Sellers agreed with Lee that streamlining – the city is notorious for having an arduous permitting process – was imperative.

“We need to help people get through the process as quickly and painlessly as possible,” he said.

Sellers noted that the council was reviewing whether or not to keep the Architectural Review Board. The board, which is made up of community volunteers and meets twice monthly, is just one more step in an already long process.

But Toy had little consolation for business owners put off by the city’s processes.

“They may not want to pay impact fees, but they have to. They may not want to get architectural approval, but we have a process that requires that. A developer who wants to bring in a mixed-use project may not like that we have (growth control). But that’s voter approved so that can’t change.”

But what can change, Toy said, is the customer service.

“Is it taking too long to move the application? Are there questions about how the policy is being interpreted and the fees are calculated?” he asked rhetorically. These are the things his department can lend a hand with, Toy said.