Morro Bay city, business leaders brainstorming economic development

Faced with a $3 million shortfall that prevents the city from providing some services as basic as paving streets, Morro Bay officials are looking for ways to appeal to more tourists and attract technology companies with high-paying jobs in order to expand the local economy and generate more tax revenue.

In a series of recent public workshops, city officials have presented a wide range of ideas that include bringing in a new hotel/conference center, redesigning Centennial Stairway to encourage foot traffic between the waterfront Embarcadero and downtown, and turning the Embarcadero into a one-way street to make room for a promenade.

At a gathering this week with seven local leaders in real estate, technology and planning, as well as three city officials, City Manager David Buckingham presented a picture of how Morro Bay could look over the short term and over the next 50 years.

“There’s new political stability in Morro Bay,” Buckingham said. “We have a council that represents a broad middle section of the community that’s ready and willing for change.”

A key reason for encouraging business growth is to cover costs for city services and particularly to address a deteriorating infrastructure.

“The city’s $3 million gap between our revenues and requirements is largely created in deferred maintenance — not doing work we should be doing to keep our infrastructure in adequate condition,” Buckingham said. “For example, we require about $1.5 million a year to maintain our streets but only have about $500,000 to spend on those streets. That’s a $1 million shortfall right there.”

The city also needs to build a new police station to replace its aging facility at 850 Morro Bay Blvd., he said.

A new hotel and conference center, for example, could bring in an estimated $500,000 per year in sales tax revenues, Buckingham said, which would help offset the lost $800,000 in revenues from the decommissioning of the Morro Bay Power Plant in 2014.

Major development opportunities exist in the downtown core, where the city already has identified properties available for potential development within a couple blocks of the Embarcadero at Market and Pacific streets.

City-led projects, possibly tied in with new development, include a vision to upgrade Centennial Stairway, which leads to the Embarcadero. Buckingham believes that the old staircase and its orientation don’t make it appealing for pedestrians to head up the hill to downtown shops and restaurants.

Better connecting the stairway to the downtown business district could be tied in with new development around the site, he said, and include creating an Embarcadero promenade.

One of the participants in Wednesday’s forum, Morro Bay Skateboard Museum owner Jack Smith, said that he has witnessed a new group of tourists coming to Morro Bay who want to engage in sports and outdoor activities.

“It’s a different kind of tourist than the ones I saw come through here in the 1970s,” Smith said. “People want to be doing something active. Also, there’s a whole new group of millennials who communicate through social media. It’s a different era. The city needs to reach them as well.”

Other business owners cited the challenges they’ve had with hiring and retaining employees because of the higher cost of living in Morro Bay than other areas of the county.

Buckingham said he hopes that technology firms with head-of-household jobs will come to Morro Bay because of its natural beauty, and he has identified buildings within the city limits that could house those kinds of companies.

He also identified a handful of sites with larger development potential.

A 200-acre parcel owned by the company Tri-W on a hillside east of the Morro Bay Boulevard-Highway 1 interchange has large development potential, perhaps with a commitment of public open space because of beautiful views and hiking opportunities on the parcel, he said.

The future of the shuttered power plant property remains a question. Last year, Texas-based Dynegy put the site up for sale, then took it off the market after no satisfactory offers came through.

If a deal to demolish and redevelop the power plant were to go through, a new owner could open it up for a wide-range development, including a hotel/conference center, public parks and recreation areas, professional office space and light/green industry and perhaps some affordable housing, Buckingham said.

The city’s existing wastewater treatment plant near the ocean on Atascadero Road also is expected to become available for development by 2021 when a new treatment plant and water reclamation facilities are built at an inland site yet to be determined.

Overall, the city is not in dire economic straits, but more revenues for key enhancements are needed, Buckingham said.

“We want to create a stable, sustainable economy in Morro Bay,” Buckingham said. “... I’m definitely not trying to convey that the boat is sinking, but there are some areas in which we don’t have funding for things our residents would like us to do — streets for example.”

This story was originally published March 10, 2016 at 5:34 PM with the headline "Morro Bay city, business leaders brainstorming economic development."