Vallejo trying to capitalize on strengths for economic growth

By Rachel Raskin-Zrihen/ Times-Herald staff writer
Posted:   02/17/2013 01:03:51 AM PST

Rather than operate on wishful thinking, a recently completed economic development study suggests the best approach for growing Vallejo's economy is to play to its strengths, economic development director Ursula Luna-Reynosa said. 

The $46,000 RDA Global study found that health care, tourism and manufacturing are the three main industry clusters most likely to grow and create jobs here. They are therefore the ones that should be targeted initially for economic development, Luna-Reynosa said. 

It makes sense to Vallejo Chamber of Commerce President and CEO Rich Curtola and the chamber's economic development chairman Dennis Klimisch agree. 

The study found health care is the city's main employer. This can attract related business, and in fact, already does. In the last six months, for insurance, a doctors group expressed interest in opening a dialysis center here, Luna-Reynosa said. 

The study found that while Vallejo is short on Ph.Ds and other higher degrees compared to many other Bay Area cities, it has the largest number of people with technical certifications. 

This is precisely what manufacturing requires, which is important because the study shows an available workforce is a major consideration for firms thinking of moving or expanding, she said. Businesses coming here will be able to draw from the pool of some 61 percent of residents that now commute out of the city. 

Tourism made the list mostly due to Six Flags Discovery Kingdom, but also because the Solano County Fairgrounds development plan (Solano 360) now takes an entertainment-focus approach. It also notes the city's' proximity to Napa, historic Mare Island and other entertainment destinations as well as the ferry link to San Francisco. 

Though any direct benefit is likely years away, it is believed that embarking on a well-thought-out strategic plan will generate jobs, creating wealth and allowing the city to provide more public services, Luna-Reynosa said. 

"It's a process. There's no magic wand. It will take some time. But, this plan can make it happen if the city stays committed to it and implements it," she said. 

"I think it's ideal. It's what Vallejo needed," Klimisch said. 

The next step is to prioritize and make recommendations on specific steps, she said. 

"We will go to the council with that soon; within next couple of meetings," she said. 

Business retention and expansion are likely the most important first focuses, "because 80 percent of all job growth comes from (a city's) existing business base," Luna-Reynosa said. 

Actions will include visiting businesses to learn their barriers to survival and expansion, she said. 

The plan also includes addressing the perception of the city through marketing, she said. 

"The study shows that crime rates don't seem to affect existing businesses, but it does make a difference in attracting new businesses, so this shows it is more a perception issue," she said. 

The pace of the city's economic improvement could pick up with the nation's economic recovery, she said. 

"The best we can do is be ready to go when the private sector starts to take off," she said. 

Contact staff writer Rachel Raskin-Zrihen at (707) 553-6824 or Follow her on Twitter at Rachelvth. 

The recently accepted Vallejo Economic Development Strategic Plan found: 

* Four industry clusters drive much of Vallejo's economy and are responsible for more than 60 percent of all employment. 

* Health care employed 6,658 workers in 2009, some 27 percent of private sector employment. 

* Tourism-linked industries, like arts, entertainment, recreation, accommodation, and food services, employed 4,516 workers in 2009, or 18 percent of private sector employment. 

* A diversified manufacturing-related industrial sector employing some 3,050 workers in construction (1,922 workers in 2009 or 7.8 percent of private sector employment), warehousing and transportation (603 workers or 2.5 percent of employment), and manufacturing (529 workers or 2.2 percent of employment). 

* A cluster of higher education institutions, including Touro University, California Maritime Academy, Solano Community College, and a new program offered by Sonoma State employs more than 800. 

* A highly skilled and available workforce (the most important decision-making factor among corporate real estate professionals surveyed); about 31 percent of Vallejo workers have an associate's degree or some college education, compared to 22 percent in the Bay Area. 

* More than half of Vallejoans who commute out of town, do so for manufacturing, transportation, warehousing, and logistics jobs, as well as healthcare, professional, insurance, and financial services. 

* Vallejo is one of the Bay Area's most cost-competitive places for business, with average labor costs here about half the Bay Area average. 

* The strategic asset most often noted by Vallejo's business leaders is its location and regional transportation connectivity, with six highways, operational rail infrastructure and near air transportation facilities. 

Source: RDA Global's City of Vallejo Economic Development Strategic Plan and Strategic Marketing Plan