John Keisler on City of Long Beach’s Blueprint for Economic Development

John, share the City of Long Beach’s recreated, economic development department, and the significance of its recently adopted economic Blueprint.

John Keisler: Economic Development is a relatively young department. Over the last decade where, because of budget reductions, the city eliminated the former Community Development Department and put pieces of economic, workforce, and property development in different departments throughout the city. Two years ago, the mayor and city council created this department anew, and asked us to create—in partnership with the community—a blueprint for economic development that would help guide policymakers over the next 10 years.

We spent 26 community-based meetings talking with industry experts in real-estate development, housing, transportation, international trade, and all the major industries and sectors in the city of Long Beach. This was not a consultant-driven process; it was a community-based process. From those meetings, our Economic Development Commission, which are 11 people appointed by the mayor to represent these different sectors, collected approximately 82 recommendations that were then sorted into seven different focus areas. These comprise our economic development blueprint, which is dedicated to creating economic opportunities for workers, investors, and entrepreneurs—the three primary ways that people are making money in the city.

Since we were formed to create this blueprint, and form follows function, our department is now built around this blueprint and these client groups. Workers are represented and served by our Workforce Development Bureau; investors by our Real Estate and Property Services Bureau; and entrepreneurs by our Business Development Bureau. 

What inspired Long Beach’s Blueprint?

We learned from the innovation economies of other cities, like Austin, Boston, and Silicon Valley. But rather than trying to be something else, or structure our economic development strategy around another place, we intentionally focused on building around what Long Beach is: What is it about our history, our infrastructure, our economy, and the people who live here, that makes us special in our part of the world? 

What contributes to making the City of Long Beach special?

First, Long Beach is about building stuff and moving stuff. Transportation and manufacturing have always been huge for us.

Right from the beginning—around 1910—the residents of Long Beach realized that the port is important to us, so they taxed themselves to dredge the port. At one point, it was used for shipbuilding and manufacturing. Over time, we connected the port with rail, we built our own airport, the major freeways were constructed, and eventually, so was the consolidated rail system. Then the Navy came. During World War II, the port was the Navy’s logistics center, and we had 70,000 Navy personnel. The airport became the hub of manufacturing for our aerospace strategy in the war. After the Navy left in the mid-90s, the port was largely empty. Now, it’s been converted to a commercial port.

As we evolve, and the economy changes, the question is: How can we take advantage of these historic core competencies to position our city for the new economy of global logistics, global manufacturing, and online retail?

In addition to identifying the things we’ve historically done well, it was important to look at our anchor institutions, like our university. Over the years, Cal State Long Beach has become the largest CSU in the system, with 40,000 students. Most states in America would just die to have 1,200 engineers graduating from their university system each year; we have that in Long Beach alone. That has to do, of course, with our history of building infrastructure and civil engineering.

After looking at those assets and that history, and we looked at how places like Silicon Valley and Boston handle their assets. What kept coming up in places that are seeing growth and attractive innovative companies was a very intentional partnership among university, industry, and government. All of those assets are here in Long Beach. Connecting them in a deliberate and formal way—through partnerships, innovation centers and hubs, and incubators—is the strategy that is working for other cities.

In Long Beach, we’ve formed a new Institute for Innovation and Entrepreneurship on the Cal State campus. We recently broke ground on a new incubator in Downtown, leveraging technology around navigational tools for entrepreneurs.

I would encourage everyone in the business of economic development to understand who you are, your history, your historical ecosystem, the infrastructure you have in place, and then build around those unique assets and anchors.

How has the city leveraged its port as an economic development asset?

We’re fortunate that the port and the airport are centerpieces of the modern economy. Our geographic position is a huge natural advantage: We’re the beachhead for imports coming to the U.S. from Asia and the Pacific Rim.

The community has a fierce sense of ownership and pride with regard to the port. Long Beach has fought multiple attempts over the years, from the city of Los Angeles and the federal government, to merge our port with the Port of LA. The port is important not only for trade, logistics, and goods movement, but also as a strategic asset for the creation of jobs and the opportunity to connect to markets. It is a source of economic activity and innovation in itself. At this point, the port has become the vehicle through which all of our commerce moves.

Over the last 100 years, we have maintained a strict separation between the port as an enterprise and the rest of city government. Like an enterprise, we are constantly reinvesting the port’s proceeds back into operations and improvements. There is about $4 billion in investment going on at the port right now to make it more technologically advanced: moving to the containerized method, changing the configuration of our piers, and more. When our Middle Harbor is completed in a year or so, it will be the most technologically advanced berth in the world.

Continually reinvesting in the port, and being willing to commit present and future funds to its redevelopment, has allowed it to stay nimble and to position itself as an industry leader in trade, commerce, and logistics.

How has the use potential of the Boeing site evolved over the decades? What will that site become in the future?

In 2013, Boeing Corporation announced the closing of its Long Beach plant due to the end of production of the C-17 Globemaster III, a large military plane. Boeing intends to put that 87-acre site on the market by the end of this year. It is contiguous with the airport, where we have another 1.8 million square feet of vacant hangar space. Now, as we’re looking to reposition and reuse the site, we’re going through a specific planning process, funded by a grant from the Department of Defense.

The plan—called the Globemaster Corridor Project—looks at rezoning a large industrial and manufacturing area, including the Boeing site, to prepare it for the factories of the future, as well as the integration of the whole advanced manufacturing supply chain. What else might we include in that space, through the zoning process, to allow for development that will bring startups, advanced and small-scale manufacturing, research and development, venture capital entertainment and hospitality? What other placemaking components can we use to attract the companies and workforce that will make up a creative, innovative hub for the future of aerospace manufacturing?

We still see this site as relating to aerospace manufacturing. But what we’re envisioning is a very different environment than a historic mass-manufacturing site—a much more integrated, mixed-use complex. The Douglas Park redevelopment to the north has taught us that even advanced manufacturers, engineers, and rocket scientists want a microbrew and good lunch options nearby, and need hotels for people who come in on business travel. Big campuses are becoming much more dynamic, and they have to be far more inclusive of multiple players—smaller and larger—who participate in different aspects of research and development and ultimately manufacturing of space technologies.

In this process, we’re engaging not only the community, but also industry. For example, we’re talking with advanced manufacturers like Virgin Orbit, which is researching and developing small satellite rockets and launch technology just to the north of the site. We’re talking with Gulfstream, which is manufacturing and assembling $70 million private jets to the east of the site. And we’re talking with DASCO, which manufactures aerospace parts to the south of that site. We’re also partnering with Boeing.

The planning process should be complete by the end of the 2018. Our goal is to use that specific plan to create an Enhanced Infrastructure Financing District, where the city will be able to leverage millions of dollars against the tax increment to do public infrastructure. We are going to need to address big transportation and infrastructure issues in the area in order to build the factories of the future there. As the city, we want to bring as much value and certainty to this site as possible so that the next round of owners, buyers, developers, and investors know what they’re getting into, and we can attract the best and the brightest. 

There is much discussion about reinvesting Measure M monies in the Blue Line, down the southern spine of LA to Long Beach. What is the significance of that investment for economic development? 

It begins with the commuting nature of our population: 77 percent of our residents commute outside the city for work every single day. Some would see this as a problem, but those people make 14-15 percent more money by commuting. The fact is that we live in a regional economy. The aggregated GDP for Los Angeles and Orange Counties alone is over $1 trillion.

The high commuting rate also reflects that the city of Long Beach is not only an economic engine for the region; it’s also great place to live. We’ve got a huge range and diversity of neighborhoods, culture, and housing types. It’s a dynamic urban environment—one of the largest cities, sitting right on the waterfront. People love to live here, and the option of commuting 30 minutes east or south to two of the best job markets in the country is part of that as demonstrated by the recent Building a Better Long Beach update from Mayor Garcia.

Connectivity to opportunity doesn’t necessarily mean that the job is just down the street or in the neighborhood or downstairs; it could mean a 25-minute train ride north into Los Angeles or South LA, or a bus ride into northern Orange County. That’s why the Blue Line is so critical: In order to take advantage of the economic opportunities that exist in the region, we need to provide good rapid transit and light rail options.

The median household income on the east side of Long Beach is about $110,000 a year. That’s high, even for Orange County. Those areas, which are by and large made up of single-family homes, have access to multiple freeways—the 605, the 22, the 91, the 405—and a lot of options for single-occupancy vehicles. They’re able to drive to all kinds of different job opportunities, and to bring that wealth back into their homes and into the city.

The challenge is that the median income falls significantly on the central and west sides, to $50-60,000 per household. That puts families of four in the poverty range. And many of those families and households don’t have vehicles—so they don’t have access to all those good regional jobs.

We want to raise the median income for our residents. In some cases, the way we can do that is through workforce development and job training. In some cases, it’s through business development and attracting companies that provide good jobs to the city. And in some cases, it’s improving mobility and access to public transportation for people so that they have choices. When you have choices—when you can choose among employers, and choose a higher income—that’s how you get that commuting premium enjoyed by the people who have their own vehicles in those houses on the east side.

Again, transportation and mobility have always been a part of Long Beach: We build stuff and we move stuff. And moving people is now more important than ever, because a city in a regional economy can take advantage of wealth-building opportunities for people when it provides more and quicker commutes.

Our mayor, Robert Garcia, had the vision to get on the Metro Board to represent Long Beach. Ultimately, he is single-handedly helping to put these investments and projects on the radar of Metro and the region to make sure that Long Beach transportation is a priority. And kudos to him: As a result, we’ve got new trains, 35 new positions in our police department paid for by Metro, and a project to lay eight miles of fiber along the Blue Line to shave 10 minutes off that commute time to LA—and time is money.

Thanks to leaders like the mayor, vice mayor Rex Richardson (who’s on the SCAG Board), and our city council, we are making the strategic investments in economic development through transportation that haven’t always received focus in the past.