Morro Bay hires consultant to help with economic development

Morro Bay
Morro Bay The Tribune

A Morro Bay consultant who said the city is at a “crossroads in terms of its economy” was awarded a $49,000 contract Tuesday to prepare a local economic development action plan.

The Morro Bay City Council voted 5-0 to hire Don Maruska & Co. to lead a one-year project to help guide the city in areas of business growth to help increase tax revenues and economic vitality.

Maruska — a business coach and founder and CEO of three Silicon Valley companies — outlined several general keys for success in a draft report to the city, including getting commitments from business and city leaders to work toward promoting goals.

Maruska said his plan would garner input, through workshops and outreach, from business leaders in Morro Bay and other communities.

“(Morro Bay) faces the difficulty in getting segments of the business community to work together,” Maruska wrote. “This hinders the ability to focus efforts and leverage resources to accomplish results.”

Maruska said the city faces economic challenges with the closure of the power plant, aging tourism facilities, retail vacancies and low sales tax revenue.

But he also cited assets such as a “working waterfront, refreshing summer temperatures, friendly residents, new events and more.”

Councilman George Leage cited the city’s seaside location as a potential “untapped jewel” for business opportunities — though he didn’t offer specific suggestions.

“This (approval of a working economic development plan) is the best thing that’s happened to the city in years,” Leage said.

In the past two years, the city contracted with the Morro Bay Chamber of Commerce at $58,000 annually to conduct an incubator program out of its office that was intended to encourage business start-ups.

The program didn’t achieve results so the council opted not to renew the contract with the chamber. Instead, it redirected the funds to hire Maruska for the economic study.

“Don’s a great resource, and we’re getting his expertise at a reasonable price,” said Mayor Pro Tem Christine Johnson.

City Council and mayoral candidates who ran in the June election each identified improving the business climate in Morro Bay as a key to the city’s financial stability.

Incoming councilman John Headding, who assumes his position at the start of the year, warned during his campaign that Morro Bay’s financial state is “dire.”

Mayor Jamie Irons has held a more measured view, saying the city is meeting its reserve requirements, but that business growth and increased tax revenues are needed.

Specific ideas haven’t been formulated yet. But Maruska cited accomplishments elsewhere such as encouraging the growth of the software engineering industry in Santa Cruz because the city is attractive to computer engineers who surf.

Maruska cited a San Luis Obispo County economic development plan that sought to attract industries related to “knowledge and innovation” to create head of household jobs.

The idea was to encourage and fast-track projects through the planning process, such as the marketing company Rosetta’s new, expanded 48,000-square-foot facility near the San Luis Obispo County Regional Airport.

But the plan for Morro Bay could be different than what other cities have focused on.

For example, opportunities with offshore fiber-optic cables that connect to the North Coast, Maruska said, could lead to new business ideas through brainstorming and collaborations.

“The focus of this is a business-led economic action with the city’s support,” Maruska said.

Maruska said companies that generate income from out of the county and internationally tend to take in much higher revenue producers than those that focus on local clientele. Desirable projects should be fast-tracked through the planning, permitting and building processes.

“I think the return on investment (from conducting the plan) could be very significant for Morro Bay,” Irons said. “For around $50,000, the city will get a return on invest that’s much, much higher.”

Once the plan is in place, the idea is that the Morro Bay Chamber of Commerce as well as merchant and tourism groups will help spread the information.

Maruska will hold regular meetings with “action teams” to help ensure goals are met, helping the stakeholders overcome obstacles, and publicly reporting results of the program, showing successes in particular to help build enthusiasm for the ideas.

Key general factors for success Maruska identified include the following:

  • the commitment and leadership of the business community because “they will be the ones to generate results”;
  • fact-based input on opportunities for sustainable economic activity;
  • broad and active support from elected officials; and
  • periodic progress updates and revisions to keep it fresh.