City Council
MEETING DATE: 3/25/2015
TITLE:
Title
Cathedral City Chamber of Commerce Service Provider and Lease Agreements
End
FROM:
Leisa A. Lukes, Economic Development Manager
RECOMMENDATION:
Recommendation
Staff recommends that the City Council receive a report and discuss.
Body
BACKGROUND:
The Cathedral City Chamber of Commerce, founded in 1937, has operated for over 75 years. The Chamber serves the business community by providing a source of information and advocacy to enhance opportunities for business retention and expansion within the city. Actions facilitated by the Chamber's 15-member Board of Directors and implemented by Chamber staff supplement the City's ongoing economic development activities. Additionally, the Chamber serves as the City's Visitor Information Center to share and promote the community's attributes to visitors, residents, and business owners.
The City has contracted with the Chamber since the City's incorporation in 1981. Current City support includes an annual general fund allocation in exchange for specified services. The City also hosts the Chamber offices in the City-owned Civic Center Building in Town Square at minimal cost to the Chamber.
The following information is provided for Council information in preparation of the upcoming fiscal year budget discussions.
DISCUSSION:
The City of Cathedral City, like many cities, has provided annual support to its Chamber of Commerce over the years. Current records indicate that the City has contributed financially to its Chamber since 1996 and presumably for prior years. The amount of annual support ranges from $$20,952 in 2002 to $75,000 in years 2007, 2008, 2009, and 2010. The Council has approved the Chamber's annual funding request for the past three years at $50,000.
At the start of FY12/13, the Chamber moved from its location at the northwest corner of East Palm Canyon and Date Palm Drive in a rented retail storefront to its current location in an approximate 1,044 square-foot office space located in the City-owned Civic Center Building. The space is adjacent to the City's administrative offices and is accessed from a separate entrance. The front office area also serves as the City's Visitor Information Center. The average rental rate for similar space is estimated at $0.85/square foot or approximately $10,650 per year and potential common area maintenance charges associated with building upkeep of approximately $3,000 per year.
Due to the poor condition of the previous Chamber location, the City Council agreed to lease the space within the Civic Center to the Chamber on a temporary basis to benefit the Chamber's budget and appearance. The City offered the Chamber this City-owned space for $1 per year for two years. In parallel, the City approved the Chamber's reduced General Fund request from $67,500 to $50,000 during that period. In 2014, at the conclusion of the lease term, the Council authorized a one-year lease for the Chamber to remain in its current location, which the Chamber had determined satisfied their current needs, and which also serves well as the City's Visitor Information and Welcome Center. The lease term now runs concurrent with the term of the Chamber's Service Provider Agreement, both of which expire at the conclusion of the current fiscal year on June 30, 2015.
PRIMARY FUNCITIONS AND RESPONSIBILTIES
Through a Service Provider Agreement between the City and the Chamber (Attachment 1), the Chamber provides services that the City does not have the resources to do. As an economic development partner with the City, the Chamber of Commerce has several key responsibilities, including promoting businesses through its outreach and education activities. These business retention and expansion efforts are intended to assist businesses so that they may thrive within the community and ultimately improve business attraction, which is spearheaded by City staff. The Chamber's business outreach and education efforts can take many forms, including networking, advocacy, lobbying and liaison activities with other existing business resources in the community.
As the Visitor Information Center, the Chamber may be the first point of contact visitors, and potential residents and businesses have with Cathedral City in learning all that the City has to offer.
The Service Provider Agreement requires the Service Provider ("Chamber") to prepare and submit to the City's Business Development Administrator (Economic Development Division) detailed reports on a quarterly basis regarding the Service Provider's performance of the services required by the Agreement (Section 18). The attached Quarterly Report was submitted by the Chamber's CEO/President for Spring 2015 (Attachment 2).
CITY COUNCIL GOALS AND CHAMBER SERVICE PROVISIONS
Community and economic development are integral to the Council's vision for the City. In January, the City Council adopted its goals for 2015. One of these goals included review and evaluation of the current Service Agreement and the Lease Agreement (Attachment 3) with the Chamber. The following are two other Council goals that specifically address Chamber activities and the corresponding Chamber Service Provider requirements per its Agreement with the City.
a. Develop a plan to contact existing businesses and gather information on how to best facilitate their retention and growth - The current Service Provider Agreement does not specifically identify this as an action to be provided by the Chamber; however, the Chamber does provide business networking opportunities through Chamber mixers and monthly luncheons; it has an Ambassador Program to welcome new members at these functions; and it is expanding upon the existing Mission Plaza, Perez Road, and Consignment Corridor clusters. The Chamber's monthly "power" lunches/networking mixers and special events, such as the State of the City and the Orion awards, are open to all with Chamber members receiving special pricing.
The Service Provider Agreement stipulates that the Chamber work with the commercial broker community, which has direct contact with businesses interested in locating, relocating, or expanding in Cathedral City. Through its community outreach, the Chamber partners with various City departments, local public and private agencies such as SCE, CVWD, and Time Warner, CVEP, and others to assist businesses through the Chamber's legislative and public relations contacts.
b. Providing educational opportunities for businesses and consider holding a business expo - The current Service Provider Agreement stipulates that the Chamber incorporate Workforce Development into its work plan. The Chamber is to develop a partnership with the Workforce Development Department in Indio and the Riverside County Department of Social Services in Cathedral City to host job fairs, job training, internship opportunities, and employee referrals. The Chamber currently expands upon the efforts of the Workforce Development Department and the Small Business Development Center in multiple aspects of workforce development and small business educational opportunities and refers candidates for potential internships and job opportunities as noted in the Quarterly Report.
Other areas covered by the Service Provider Agreement include the Chamber's support for City events and activities. The Chamber does this by promoting these events in its monthly newsletters, e-mail blasts, and website. The Chamber also has links on its website to both the CathedralCity.gov and DiscoverCathedralCity.com City websites. The Chamber recently participated with City Economic Development and Communications staff and with CGI Communications to develop City promotional videos that are accessed through the Chamber's website and that provide a marketing opportunity for all City businesses.
According to the Chamber, its minimal levels of staffing and volunteer participation prevent it from taking a substantial role in City-sponsored special events.
CHAMBER MEMBERSHIP STATUS
The Chamber noted in their Winter 2014 Quarterly Report a growing membership of 307 members and 23 membership commitments for a potential total of 330 Chamber members, which represents an approximate 20% increase over the prior year. The past 3 years' membership totals were noted as follows:
2014 - 275 total members
2013 - 230 total members
2012 - 124 total members
In addition to sponsorship(s), growing the Chamber's membership is one means of obtaining the resources needed to increase benefits to all members. Increasing business benefits could ultimately increase the number of member businesses. One of Cathedral City's opportunities is that there are a large number of businesses with a strong attachment to the city. Conversely, one of the challenges is that most of these are individually owned small businesses that have limited resources. Attachment 4 includes the Chamber membership package showing the membership fees along with membership benefits and services although some of this material is out of date, such as the Cathedral City Guide, Power breakfasts (vs. lunch) and cost to attend.
PROVISIONS OF OTHER CHAMBERS AND THEIR SPONSORSHIPS
Attachment 5, provided by the Cathedral City CEO/President at City staff's request, summarizes several aspects of 7 other Coachella Valley Chambers of Commerce, including their office locations and rental rates; city sponsorship levels; hosted special events; staffing; service provisions; and what they are not contracted to provide. There is a wide variety of city support provided to the various chambers consisting of a combination of financial and facility subsidies. The chambers provide a wide variety of services; however, all serve in some capacity to support economic development for their cities and most serve as visitor centers. The number of staff is generally two or three, with only Palm Desert employing six.
SUMMARY
The Cathedral City Chamber serves to supplement some of the economic development activities of the City and is charged with providing services the City does not have the resources to do in exchange for City sponsorship. Several other chambers within the Coachella Valley receive some form of subsidy from their associated city in exchange for providing a varying range of services generally focused on economic development and visitor-serving activities.
Changes in the economy, expansion of the City's corporate boundaries and ongoing growth of both commercial and residential development, the recently-adopted goals of the City Council, the now seasoned tenure of the current Chamber CEO/President, and the upcoming budget discussions all coincide with the Council's goal of reviewing the current agreements between the City and the Chamber.
FISCAL IMPACT:
$50,000 is included in the proposed FY 2015-2016 Budget for the Chamber Agreement.
ATTACHMENTS:
1. Service Provider Agreement
2. Chamber Quarterly Report - Spring 2015
3. Lease Agreement
4. Chamber Membership Package
5. Other Chamber Provisions and Sponsorships