Economic Development

Organization of this Chapter

The Economic Development Chapter is divided into the following sections:

The Introduction describes the intent of the Economic Development Chapter and its relationship to Redmond’s vision of the future and other Comprehensive Plan chapters.

The Planning Context summarizes the interrelationships with the regional economy and how the policies in this chapter respond to the requirements of the Growth Management Act and the Countywide Planning Policies.

The Economic Development Policies are divided into the following areas:

A. City of Redmond’s Role in Economic Development Policy addresses how Redmond can foster economic development.

B. Quality of Life and Business Climate Policies address factors that contribute to a high quality of life and favorable business climate.

C. Land Availability for Economic Activities Policies provide for the protection of existing business areas and sites for future businesses, given the limits on available urban land in the area.

D. Incentive and Marketing Policies address how limited local, state and federal incentives should be targeted to generate the greatest community benefit.

E. Financing Business Expansion Policies address existing public sources of business financing and support additions to the community’s economic development tool kit.

F. Education and Job Training Policies address quality schools and adult education to maintain a high quality work force.

G. Business Community and Regional Partnership Policies describe how Redmond will continue to work with the business community and other organizations in the region to address problems and opportunities.

H. Economic Opportunity for All Policies describe how the City will encourage economic opportunity for all segments of the population.

I. Monitoring Economic Changes Policies address how Redmond will identify changes in the economy which the City must address and evaluating the impact and effectiveness of City policies and regulations.

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Introduction

he significant growth in businesses and jobs was one of the most dramatic forces that helped to change Redmond from a small farming community to a prosperous city. This transformation began in the 1950s and is continuing. The accompanying graphs show the increase in firms and employment over the last 10 years.

Today, our City enjoys a strong and diverse economy. Redmond is known internationally as the home of many important software companies. It contains research and development firms working in biotechnology, electronics, avionics, space technology and other fields. Redmond has attracted light manufacturing firms in a variety of industries and many distribution companies. The City has many retail commercial firms and a substantial service industry.

Some Redmond firms operate only locally. Others are key players in the national and international marketplaces. Helping our businesses maintain their competitiveness is key to sustaining Redmond’s strong economy. And a strong economy is essential for achieving Redmond’s vision for the future. That vision calls for locally based jobs and retail and entertainment businesses that meet the economic needs of city residents.

Redmond’s high quality of life is a major contributor to its economic success. Our City is known as a safe community with attractive neighborhoods, well-designed buildings and good schools. Our quality of life has attracted successful companies and a productive work force. Many commentators believe that as firms become more mobile due to the shift from a resource-based economy and advances in telecommunications, quality of life issues will become an important criterion in firms’ decisions on whether to remain or to expand and on employee decisions regarding where they are willing to live and work.

By helping to fulfill Redmond’s vision of the future, the Economic Development policies also will help improve our City’s quality of life and economic health. To achieve this, the policies:

▀     Encourage attractive commercial and industrial areas.

▀     Target sustainable, high-wage industries.

▀     Provide the opportunity for a broad variety of appropriate economic activities and encourage jobs for community residents and their children.

▀     Promote a diverse economy necessary to help the community to weather economic downturns.

▀     Call for improving the economic status of all members of the community.

In addition to policies contained within the Vision Chapter, the Economic Development policies work with other chapters of the Comprehensive Plan. For example, the Land Use Chapter’s policies designate sites for the existing and future businesses encouraged by the Economic Development policies, and protect them from incompatible uses. The Transportation Chapter provides for the efficient movement of people and goods, an important requirement for a strong economy.

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Planning Context

edmond is part of a regional, national and international economy. While it can work to attract and retain residents and businesses through policies that promote economic development and a high quality of life, many economic trends are beyond the City’s control. For instance, many firms, such as biotechnology start-ups, are attracted to Redmond because of its geographic position within the region, i.e., its close proximity to the University of Washington. Other businesses are attracted by Redmond’s prominence as a center of the software industry.

The Growth Management Act, in an attempt to encourage local governments to anticipate, prepare for and respond to these different trends, requires that jurisdictions’ comprehensive plans encourage economic development consistent with other community policies and provide for the economic needs of all citizens of the state, including the unemployed and disadvantaged.

The King County Countywide Planning Policies require an Economic Development Chapter that addresses the economic concerns of the community. Redmond has prepared this Economic Development Chapter to meet these requirements and community desires for a productive and sustainable economic sector.

Another aspect of the planning context is the market demand for land for new and expanded businesses in Redmond. Redmond has projected the demand for space for new and expanded businesses and the number of jobs that will be created over the next 20 years. These projections are based on market trends They also take into account the range of jobs allocated to Redmond under the Countywide Planning Policies for the next 20 years. The number and type of jobs that Redmond anticipates accommodating over the next 20 years are shown in Table ED-1.

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Table ED-1

Redmond Employment by Sector

1993 Actual and 2012 Projected

Sector	1993 Base	2012 Forecast	Increase	Percent Increase
Redmond City Total	39,026	68,535	29,509	76%
Office	24,610	49,215	24,605	100%
Retail	3,252	5,285	2,034	63%
Manufacturing	11,164	14,035	2,870	26%

Economic Development Policies

A. The City of Redmond’s Role in Economic Development

city can foster economic development to achieve its goals by anticipating and responding to changes in the local, regional, national and international economies. For Redmond, these goals include providing for economic stability through economic diversity and encouraging a broad range of jobs to help employ the community’s residents.

A city’s economic development actions can include activities primarily directed toward economic development and those undertaken for other reasons, but that also produce economic benefits. Examples of activities primarily directed toward economic development include allocating land for manufacturing uses, extending water and sewer systems to business sites, providing tax credits and incentives and advance planning to accommodate growth. Examples of activities with economic benefits as secondary impacts include providing an efficient transportation system, encouraging high quality schools, providing for affordable housing, streamlining permit processes and providing park and recreation activities that improve the quality of life.

Market-driven economic growth depends upon the decisions of individuals and firms; most jobs and investments are generated by private businesses. Local governments must also contend with forces beyond local control, such as changes in the regional, national and international economies. These changes result from millions of individual decisions and changes in economic and social trends. But local governments can plan to take advantage of favorable trends and lessen the impact of unfavorable trends. Local governments also can hinder economic development through ill-advised policies, such as fiscal zoning which involves zoning more land than is needed for uses that produce relatively high tax revenues.

ED-1 Redmond shall undertake the following economic development roles:

▀     Maintain Redmond’s high quality of life in cooperation with businesses and residents;

▀     Allocate land for retail, office, research and development and manufacturing uses;

▀     Provide public facilities and services to support planned economic growth;

▀     Deal responsively with businesses and residents;

▀     Expedite permit decisions;

▀     Target marketing efforts to attract businesses that fill unmet needs in the community, and

▀     Participate in local and regional organizations that conduct economic development research, develop regional strategies and market the City and region, such as the Greater Redmond Chamber of Commerce, the King County Economic Development Council and the Puget Sound Regional Council.

B. Quality of Life and Business Climate

he importance of Redmond’s high quality of life as a contributor to a favorable business climate is likely to increase as businesses make more decisions on where to locate based on the community’s appeal. Good schools, high quality neighborhoods, an attractive appearance, many natural areas and a variety of recreational opportunities attract both businesses and residents. The City also provides high quality public services. Other factors that contribute to a favorable business climate include relatively low direct taxation of businesses, development regulations that are flexible and efficiently administered and community attitudes that support balanced and managed growth.

ED-2 Redmond should work with the business community, labor and residents to maintain a good business climate and a high quality of life.

ED-3 Redmond should continuously evaluate and improve its development standards and permitting processes to ensure that they are equitable, cost-effective, timely and meet community needs.

ED-4 Development standards for retail, office and manufacturing areas shall balance community needs and goals with the need to cost-effectively provide sites for businesses. These needs and goals include providing adequate public services with low maintenance costs, attractive and efficient areas and minimal adverse impacts on nearby uses and the environment.

An advantage of a strong economic sector is that the businesses help contribute to the costs of providing public services and facilities. To maintain a healthy economy, taxes need to be equitably distributed among businesses, residents and other members of the community. Since taxes are a cost of doing business, businesses need tax stability to help them plan for the future. In addition, some taxes have a greater impact on certain businesses than others. Although the taxing authority of cities is limited, Redmond should try to impose taxes and fees with as little negative impact on businesses and residents as possible.

However, if taxes are too low, insufficient revenues will be generated to provide or adequately maintain needed public facilities and services, and thus reduce Redmond’s quality of life and make the community less attractive. Redmond will consider these factors when making decisions on taxes and fees.

ED-5 Redmond should continue to develop revenue sources that, to the extent allowed by state law, are stable, allocate costs equitably within the community, do not penalize certain types of businesses, attract and retain businesses and maintain Redmond’s high quality of life.

Many factors that contribute to Redmond’s high quality of life (such as public facilities, public services, parks and appearance) are addressed in other chapters of the Comprehensive Plan. Actions taken in City programs should consider their impact on the quality of life and the business climate.

ED-6 In developing and implementing City policies and programs, decision makers should seek to improve Redmond’s quality of life and the business climate while achieving other City policies.

ED-7 The City should accommodate the specific needs of business where appropriate. Examples include allowing security measures, day care facilities, alternative transportation modes and intra-campus access.

The presence of many small businesses in Redmond illustrates that they are a significant part of the economic fiber of the community. A significant potential for new growth will be found through encouraging small business starts and enabling them to expand. The policies on financing business expansion (policies ED-16 through ED-20) are of particular benefit to small businesses which often lack access to capital. Certain types of zoning also provide sites that are well-suited to small or start-up businesses. Redmond should provide land use designations that give small businesses opportunities to start and grow.

ED-8 In developing and implementing City policies and programs, decision makers should seek to enhance small business opportunities and reduce potential negative impacts on small businesses.

C. Land Availability for Economic Activities

and is the basic requirement for many retail, office and manufacturing activities. Redmond encourages economic growth in locations suited for those uses, based upon available public facilities, land capability, neighboring uses and the development pattern preferred by the community. These areas are identified in the Land Use Chapter.

Redmond should plan for a variety of retail, office, research and development, and manufacturing uses. A range of retail and service uses are needed to meet the needs of community residents, businesses and employees. A variety of economic uses also will provide jobs for Redmond’s diverse population and help reduce the negative impacts of a slowdown in any particular industry.

ED-9 Redmond should provide opportunities for a variety of retail, office and manufacturing uses to locate in the community.

Redmond has significant amounts of vacant or redevelopable retail, office, research and development and manufacturing land. However, there are limits to vacant urban land in the area. Some areas are not suited to these uses. Other areas are committed already to other purposes. Redmond is limited in its ability to provide the public facilities and services needed to support growth. The Urban Growth Area also limits long-term conversion of rural land to urban uses. For these reasons, Redmond should use wisely its existing land resources.

ED-10 Redmond should encourage continued economic development in existing retail, office and manufacturing areas to maintain the economic and employment base, make use of existing public improvements and wisely use the finite supply of urban land.

Historically, the manufacturing sector created a high proportion of the family-wage jobs in the economy. Manufacturing and industrial zoning should be maintained. Manufacturing jobs can supply family wages to segments of the community who cannot obtain high-wage service jobs.

Manufacturing uses also are more limited than service jobs in terms of the areas in which they can be sited. While within the region there is a limited amount of available manufacturing land, Redmond is one of the few areas that has such land available to meet future needs. Encouraging manufacturing uses can help keep family-wage jobs available to Redmond residents and help meet the regional need for manufacturing land.

ED-11 Redmond should maintain existing manufacturing and industrial zoning where the areas meet the criteria in the Land Use Chapter and continued manufacturing use is feasible. Redmond shall reserve land designated manufacturing for manufacturing uses and prevent competing and incompatible uses from locating in these areas.

Redmond’s long-standing policy is to encourage retail and service uses in downtown Redmond. The intent is to provide opportunities for these uses, reduce sprawl, conserve land, provide for a land use pattern that encourages transit, walking and other transportation alternatives, achieve community desires for a strong downtown and reserve manufacturing areas for family-wage jobs. The Overlake area is also another major center for retail and advanced technology uses. Development in Overlake is also encouraged because the needed infrastructure can be provided efficiently.

ED-12 Redmond should encourage the development of strong urban and advanced technology centers in Downtown and Overlake. Downtown should develop into the major retail center for the City and include public uses, office uses, entertainment and arts uses and housing. Overlake should include appropriate retail commercial and high technology uses and supportive employment uses. These areas should provide a variety of goods and services and help support the City’s tax revenue base.

Policies ED-11 and ED-12, together with other provisions of this plan, will help develop and retain firms that export products and services outside the region. These firms bring income into the region that local residents can use to purchase goods and services. Manufacturing firms often export goods outside the region. Some service firms, especially many of the software firms in Redmond, also export services and goods outside the region. Firms that export goods or services are critical to the region’s economic strength.

Concentrations of businesses, such as those found in Overlake and Downtown, can benefit each other and the community. On a large scale, many businesses are dependent upon suppliers, contractors and customers. While improvements in transportation and telecommunications have reduced the need to have customers and suppliers nearby, proximity does help some industries and businesses operate more efficiently. Proximity to similar enterprises also can help businesses attract employees. On a smaller scale, some service and retail businesses benefit from locating near concentrations of similar uses that draw customers to an area. The Comprehensive Plan and Development Regulations should encourage such concentrations. The Downtown and Overlake urban and advanced technology centers are examples of ways that planning can help encourage the development of these concentrations.

ED-13 Concentrations of businesses that are complementary, that attract increased customers or that provide needed services or goods for nearby uses (both producer goods and consumer goods) should be encouraged.

More and more people are working out of their homes. This trend results from shifts in the economy toward services, corporate down-sizing, improved telecommunications technologies and the need to reduce traffic. Telecommuting and appropriate home businesses can produce many community benefits including reduced traffic congestion, reduced air pollution, increased energy efficiency and more people in neighborhoods during the day, reducing opportunities for crime. Redmond’s Development Regulations should encourage people to work at home while protecting neighborhood quality.

ED-14 Redmond should encourage opportunities for telecommuting and home businesses that are compatible with residential neighborhoods. Development Regulations should minimize the potential for negative impacts by limiting signs, maintaining the residential appearance of neighborhoods, requiring adequate parking while ensuring that parking fits into the neighborhood and is not excessive, limiting truck deliveries and appropriately managing other potential adverse impacts.

D. Incentive and Marketing Policies

s noted above in the land availability policies, Redmond has a finite supply of land available for economic uses. Many sites for retail, office and manufacturing uses in Redmond are located within environmentally sensitive areas. For these reasons, Redmond should prioritize the types of businesses it wants and then use incentives and marketing efforts to attract these firms. Incentives include public facility investments and state and federal loans. But since Redmond has limited financial resources, the City should consider other funding needs when allocating local funds for economic incentives.

ED-15 Redmond and other local, state and federal agencies should give priority in the use of incentives and marketing efforts to the following:

▀     Businesses and industries that minimize waste, prevent pollution and reuse natural resources including water;

▀     Businesses and industries in which the area has a strong competitive advantage or that support existing businesses and industries;

▀     Expansion of existing Redmond firms;

▀     Businesses and industries that help diversify the region’s economy or fill gaps in the goods and services available in Redmond;

▀     Businesses and industries that match available workers within the community;

▀     Businesses and industries that help provide housing for employees;

▀     Business and industries that provide high wage jobs; or

▀     Business and industries that export goods and services to other areas of the country and world.

E. Financing Business Expansion

he Washington State Constitution limits cities’ ability to help finance private business start-ups and expansion. Nevertheless, there are some sources of funding for business expansion. These include federal Small Business Administration loans, Industrial Revenue Bonds, state loans for pollution control equipment, state tax incentives for job creation and business investment, federally funded revolving loan funds and federally authorized Small Business Investment Corporations (SBICs). Limited state and federal programs also are available to finance some of the public infrastructure costs of job-creating business expansions. However, these programs have declined in recent years. They also have stringent requirements and there is fierce competition among applicants. Redmond can help local businesses use these funding sources by maintaining information on them in the Permit Center.

ED-16 The Redmond Planning Department shall maintain information on available public sector funding for private businesses in the Permit Center. This information shall include program summaries and information on where to apply.

ED-17 Redmond should support continued funding of cost-effective state and federal business financing programs.

ED-18 If necessary, Redmond should actively seek state and federal funding to help retain existing firms, expand existing firms and site new firms and economic activities within areas of the City designated for those uses. Redmond should give priority to firms that fall within policy ED-15.

ED-19 Redmond should work with other local and state agencies to maintain the capacity to issue industrial revenue bonds and to actively promote their use for firms in Redmond.

While these existing funding sources for economic development are effective, they are limited. Other innovative tools that could help fill gaps left by those programs, such as community redevelopment financing and economic development corporations, cannot be used by local governments in Washington state. Local governments, businesses and state agencies should work cooperatively to make the changes needed so that local governments may use these effective tools. Community redevelopment financing is the term used in Washington state to describe tax increment financing.

ED-20 If they become available, Redmond should use community redevelopment financing, economic development corporations, enterprise zones and other innovative economic development programs to meet City goals.

F. Education and Job Training

well-educated work force is important to remain competitive in the global marketplace. Redmond has a well-educated population and good schools. The City of Redmond supports education in a variety of ways, including social service, youth and recreational programs. The following policies are directed at maintaining a well-educated population and high quality schools.

ED-21 Redmond should work cooperatively with the Lake Washington School District to help maintain and enhance the quality of the community’s schools.

ED-22 Redmond should continue programs to address the needs of young people and promote a high quality educational system. These efforts should include partnerships with young people, residents and businesses.

ED-23 Educational institutions, government agencies and businesses should cooperate in providing young people with exposure to a wide variety of employment and business opportunities. Examples include mentoring programs, job fairs and vocational education that includes on-the-job training as part of the program.

Education is a lifelong process. Competitive workers and businesses need access to quality training and educational resources. Redmond is near a variety of training and educational institutions. The Lake Washington Technical College is a valuable local resource for adult education and employee training. Other nearby educational institutions include Bellevue Community College, City University, Seattle University, Seattle Pacific University, Northwest College, the University of Washington, the University of Washington’s Satellite Campus in Bothell and the Cascadia Community College.

ED-24 Redmond should support efforts to provide adult education, vocational education, job training and higher education within the region that meet the needs of Redmond businesses, employees and residents. The City also should encourage the development of new, high quality programs that address the changing needs of businesses and employees.

ED-25 Redmond should encourage greater communication between educational and training providers, businesses, employees and residents better to meet community needs.

ED-26 To address job dislocations and retraining needs in the Redmond area, the City should work with other agencies to support and encourage the provision of training and other services for affected workers.

G. Partnerships with the Business Community and the Region

usinesses, residents and governments face in-creased demands on limited resources. In this environment, cooperative partnerships between governments, public and private organizations, residents and businesses can stretch resources and more effectively address certain problems and opportunities. Redmond currently participates in several cooperative partnerships to address economic development issues. The following policies address these partnerships.

ED-27 Redmond should participate in public-private partnerships when such partnerships have the potential to effectively address problems and opportunities.

ED-28 Redmond should continue to participate in cooperative economic development programs with the private sector and other public sector agencies. These programs include the following:

▀     Participation in the Greater Redmond Chamber of Commerce, the Puget Sound Regional Council, the Economic Development Council of Seattle/King County and the Central Puget Sound Economic Development District.

▀     Support of targeted marketing activities that attract businesses to Redmond and the region. Marketing efforts should be targeted to firms and industries that meet the priorities in policy ED-15.

▀     Coordination of Redmond’s economic development activities and planning for economic growth with public and private economic development groups and other jurisdictions.

ED-29 Redmond should participate in the ongoing efforts to develop a regional economic development strategy and cooperate in setting regional diversification goals. Within two years of the adoption of the strategy, the City should consider amending this Chapter to incorporate its recommendations. When regional diversification goals are set, the City should review this plan within two years to determine if amendments are necessary and should be adopted to carry out the diversification goals.

Redmond’s Goals for the Future call for Redmond to include the public in City decisions. In addition to City residents, businesses and those who work in Redmond can contribute information and opinions to help the City make the best decisions.

ED-30 Redmond should continue to include business and labor in the City’s public participation programs.

International trade is important to firms in Redmond and the region. International trade has been a major force in diversifying the regional economy and has the potential to increase economic diversity. To remain competitive, the region needs to maintain and improve its international trade facilities. The Port of Seattle, a countywide local government, is the primary manager of these facilities and has a leading role in the development of international trade.

ED-31 Redmond should work cooperatively with the Port of Seattle to further develop international trade.

H. Economic Opportunity for All

aintaining a high quality of life requires that all Redmond citizens have the opportunity to participate in the economy. The labor force is changing. Studies have shown that the future labor force will be more diverse. Those firms and communities most attractive to a wide range of people will be in the best position to attract the highest quality and most productive employees. These are the type of employees area businesses must attract to remain competitive worldwide.

One way of making the area attractive to a wide range of people is to address the disparities in income and employment opportunities faced by some members of the community. Historically women, minorities and other economically disadvantaged groups have had lower incomes as well as fewer and poorer employment opportunities compared with society as a whole. These disparities can be addressed through education, training, social service programs and enforcement of anti-discrimination laws. Members of disadvantaged communities should be involved in these and other efforts to improve their economic future.

Providing economic opportunities for all segments of the community also has the potential to reduce crime and dependency. Reducing these problems can help make employees and businesses more productive. The education and training policies, ED-21 through ED-26, will help meet these needs. The Human Services Chapter policies also have the side benefit of improving employee productivity and opportunities for people to enter the labor force.

ED-32 Redmond should encourage the education, training and social services programs in which it participates to work toward meeting the needs of all members of the community. Members of disadvantaged groups should actively participate in the development and implementation of programs designed to improve their economic future.

ED-33 Redmond should continue to participate in programs that combat illegal discrimination.

I. Monitoring Economic Changes

ver the past several decades Redmond and many of its residents, firms and their employees have benefited from changes in the state, regional, national and international economies. Every indication is that changes in the economy are likely to accelerate. While Redmond can have little influence over many of these changes, Redmond can and should adjust its policies to take advantage of changes in its favor or changes that may create problems for the community in the future. The following policy establishes a process for monitoring economic change in the community.

ED-34 As part of the Planning Commission’s annual report to the City Council on implementation of the Community Development Guide, the Planning Commission shall monitor economic changes affecting the City and the effectiveness of the City economic development policies. The Planning Commission, in consultation with the Mayor and City staff, may recommend policy changes to take advantage of opportunities and address issues that have arisen. The Planning Commission shall use readily available data to monitor the economic changes.

Not all Redmond residents have benefited from past economic changes. Future economic changes also will harm some in our community. Policies in sections F, G and H addressed those who have been either harmed by these economic changes or unable to take advantage of those changes. The Human Services Chapter policies also address these groups. When considering appropriate policy changes, we should look at the effect of economic change on the entire community.

ED-35 The Planning Commission should consider the effects of economic change on the entire Redmond community and may propose policies to address economic dislocations affecting all or part of the community, including geographical and social segments of the community.

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