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HomeMy WebLinkAboutCAO-11-004 - Economic Development Strategy 2011-2015 - Stakeholder Engagement Process1 S~r~~'Re~ art T ~' I~ITCHEI~E~,. ~AOSO~te www.kirchenerra REPORT TO: Planning & Strategic Initiatives Committee DATE OF MEETING: May 2, 2011 SUBMITTED BY: Rod Regier, Executive Director of Economic Development (519) 741-2506 PREPARED BY: Janette MacDonald, Technical Analyst, Economic Development (519) 741-2760 WARD(S) INVOLVED: All DATE OF REPORT: April 27, 2011 REPORT NO.: CAO-11-004 SUBJECT: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 - STAKEHOLDER ENGAGEMENT PROCESS RECOMMENDATION: That the proposed stakeholder engagement process for the draft Economic Development Strategy 2011-2015, be implemented, as outlined in Chief Administrator's Office report CAO-11-004. BACKGROUND: The City of Kitchener's Economic Development Strategy establishes the corporation's direction regarding the investment of human, financial and physical resources to support the city's economy. The current strategy, drafted in 2006, was designed to inform the City's economic development activities until 2010. Since the fall of 2010, City staff have been engaged in a series of discussions with the Economic Development Advisory Committee and the Downtown Advisory Committee to review the core assumptions of the 2007-2010 Economic Development Strategy and the requirements for success in the next stage of economic development. The attached discussion paper presents a summary of these discussions and articulates a refined approach that will help to formulate the strategy and implementation tools to move forward during this term of Council. Staff propose to engage in a series of discussions with economic development stakeholders to ensure the analysis is complete and to test the validity of core assumptions, goals and objectives. This consultation process would ultimately lead to the completion of a new Economic Development Strategy for the City of Kitchener. REPORT: The City of Kitchener Economic Development Strategy is a guiding document that outlines the direction for investment of City resources in economic development during the current term of Council. Through early consultation with the Economic Development Advisory Committee, Downtown Advisory Committee and staff, three themes emerged for the refined direction of economic development. First, an innovative economy drives cluster development in a variety of business areas. This supports diversification which creates new opportunities in a community that has historically 2-1 1 I~IT(~HEI~TE~,. Staff Report CA~sO~~e www.kitche~terca been heavily invested in the vulnerable manufacturing industry. Support for manufacturing remains a priority, as does the development of small business which feeds cluster growth. This is all made possible by talent, an essential component of innovation, as talented workers bring ideas and innovation to life. Second, while an innovative economy encompasses the regional economy, including clusters concentrated in downtown Kitchener (e.g. digital media), there is an additional layer of complexity with respect to the development of downtown. Additional staff activities including, for example, event support, retail attraction and establishing urban design guidelines, contribute to attract people to the core, cultivate residential growth and a positive design aesthetic. Finally, an inventive approach to the way that staff approach the implementation of economic development will serve to drive the first two themes forward. By leveraging our resources, staff can make a greater impact than through conventional methods. Historic examples include the creation of the Manufacturing Innovation Network, and the Economic Development Investment Fund -both one-of-kind tools to further our work to strengthen the local economy. With these themes set for discussion as part of the engagement process, the discussion paper offers a framework to respond to a changing development environment, including higher oil prices, increasing global competition, local opportunities in transit and growth management and other factors that influence Kitchener's economy. The resulting strategy must be flexible to be responsive to a dynamic environment for development. Stakeholder Engagement Process: 1) September 2010 to March 2011 -Discussions with City Advisory Committees; 2) March 2011 to April 2011 -Preparation of a Discussion Paper as a basis for consultation with Council and Stakeholders; 3) May 2011 -Online Stakeholder consultation; 4) May 2, 2011 to June 17, 2011 -Informal consultations with key stakeholders; 5) May 25, 2011 -Stakeholder symposium on Economic Development in Kitchener; 6) June 8, 2011 -Public open house; 7) June 27, 2011 -Table draft Economic Development Strategy with Council; and, 8) September 19, 2011 -Presentation of Strategy to Council. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Economic development has been a significant priority of the City of Kitchener for many years. In the current City of Kitchener Strategic Plan, the six priorities are leadership and engagement; quality of life; diversity; downtown; development and environment. In particular, the economic development strategy aligns with "Downtown" and "Development". The framework in the discussion paper prioritizes downtown vitality with support for arts and culture, and event programming. As well, as part of "Development" the discussion paper offers the cluster-based approach to economic growth, and supports intensification and partnering to 2- 2 1 I~IT(~HEI~TE~,. Staff Report CA~sO~~e www.kitche~terca facilitate employment land development. The discussion paper is also consistent with Kitchener's Growth Management Strategy and the Province's Places to Grow. But the principles for the strategy discussion also address the other corporate priorities, as staff encourage sustainable development (i.e. "environmental") including improving transit options, environmental remediation and corporate leadership in sustainable development. This is one way to address another corporate priority: "quality of life". A livable community that offers culture, safety and community spaces will be more attractive to both businesses and talent. Finally, the proposed strategy is being developed through stakeholder consultation. But also, embedded in the document and the mission statement is the idea of stakeholder collaboration to achieve our goals. In this way, staff work to achieve the remaining corporate priority "leadership and engagement". FINANCIAL IMPLICATIONS: The stakeholder consultation will be implemented under existing budget provisions. COMMUNITY ENGAGEMENT: As outlined above under "Stakeholder Engagement Process", public engagement on this strategy includes consultation with advisory committees, a stakeholder symposium, one-on-one consultations with partners, an online survey and a public open house. Through this engagement, the principles in the discussion paper will be tested for their fit with the work of partner organizations, the needs of the community, and the priorities established by the corporate strategic plan. CONCLUSION: Staff will provide the discussion paper to stakeholders to frame the conversation throughout the balance of the engagement process. In this way, staff inform participants of our work and accomplishments to date, the environmental context for development and the current models and principles that guide our approach to economic development. The discussion paper reflects suggested actions already brought forward by the advisory committees and staff, and asks for the input of stakeholders in further refining our approach. ACKNOWLEDGED BY: Carla Ladd, CAO 2-3 CITY OF KITCHENER ECONOMIC DEVELOPMENT STRATEGY 2011-2015 DISCUSSION PAPER Building on momentum Submitted by: Rod Regier, Executive Director, Economic Development Prepared by: Janette MacDonald, Economic Development Analyst Cory Bluhm, Manager of Downtown Development Silvia Di Donato, Manager of Business Development Economic Development, City of Kitchener Date: April 28, 2011 2-4 TABLE OF CONTENTS Summary Introduction Environmental context Global trends influencing our city _ Local trends shaping our progress Accomplishments to date 1 3 5 5 9 13 Ourapproach 15 Corporate direction 15 Stakeholder consultation underway 15 Recommended approach 15 Strategic direction 18 Vision 18 Mission 18 Values 19 Overview of strategic themes 20 Strategic theme: an innovative economy 22 Goal 1. Business clusters prosper 22 Goal 2. Manufacturers innovate and compete 26 Goal 3. Small businesses succeed 27 Goal 4. Talented workers locate here 28 Strategic theme: a cool, dynamic downtown 31 Goal 5. People make downtown the urban heart ofthe region 32 Goal 6. Residential market is the hottest in the region 34 Goal 7. Urban chic sweeps through downtown 36 Strategic theme: an inventive approach 37 Goal 8. New developments create a clean, attractive environment 37 Goal 9. Tools enhance our effectiveness 39 Conclusion 43 Strategic alignment 43 Appendix A. Discussion paper FAQ i Appendix B. List of stakeholders Appendix C. Results from 2007-2010 Economic Development Strategy iv 2-5 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM SUMMARY The city of Kitchener is the heart of Waterloo Region, now Canada's tenth largest metropolitan area and one of its most dynamic economies. Throughout its history, Kitchener's economy has prospered as a result of entrepreneurship and innovation. From bold industrial foresight in the previous century to the advancements of the digital age, Kitchener continues to lead through visionary strategies. An economic development strategy provides a roadmap for continued economic vitality, building on the momentum created by the strategic investments made possible by the Economic Development Investment Fund (EDIF) and the implementation of the 2007-2010 Economic Development Strategy. EDIF was in place a full three years in advance of the most severe global recession in 80 years. Now the economy is recovering, and there are emerging opportunities as the catalytic projects made possible by EDIF progress through their implementation. The City of Kitchener's Economic Development Strategy establishes the corporation's direction regarding the investment of human, financial and physical resources to support the city's economy. The current strategy, drafted in 2006, was designed to inform the City's economic development activities until 2010. Since the fall of 2010, City staff have been engaged in a series of discussions with the Economic Development Advisory Committee and the Downtown Advisory Committee to review the core assumptions of the 2007-2010 Economic Development Strategy and the requirements for success in the next stage of economic development. This paper presents a summary of these discussions, including the articulation of three themes which have emerged. been heavily invested in the vulnerable manufacturing industry. Support for manufacturing remains a priority, as does the development of small business which feeds cluster growth. This is all made possible by talent, an essential component of innovation, as talented workers bring ideas and innovation to life. Second, while an innovative economy encompasses the regional economy, including clusters concentrated in downtown Kitchener (e.g., digital media), there is an additional layer of complexity with respect to the development of downtown. Additional staff activities including, for example, event support, retail attraction and establishing urban design guidelines, contribute to attract people to the core, cultivate residential growth and support a positive design aesthetic. Finally, an inventive approach to the way that staff implement the economic development strategy will serve to drive the first two themes forward. By leveraging our resources, staff can make a greater impact than through conventional methods. Historic examples include the creation of the Manufacturing Innovation Network, and the Economic Development Investment Fund -both one-of-kind tools to further our work to strengthen the local economy. With these themes set for discussion as part of the engagement process, this discussion paper offers a framework to respond to a changing development environment, including higher oil prices, increasing global competition, local opportunities in transit and growth management and other factors that influence Kitchener's economy. The resulting strategy must be flexible to be responsive to a dynamic environment for development. First, an innovative economy drives cluster development in a variety of business areas. This supports diversification which creates new opportunities in a community that has historically DISCUSSION PAPER Staff will provide the discussion paper to stakeholders to frame the conversation throughout the balance of the engagement process. In this way, staff inform participants of 2-6 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 our work and accomplishments to date, the environmental context for development and the current models and principles that guide our approach to economic development. The discussion paper reflects suggested actions already brought forward by the advisory committees and staff, and asks for the input of stakeholders in further refining our approach. This document is in circulation for further input from advisory committees as well as Council. It is intended to be aligned with the overall goals of the City of Kitchener Strategic Plan, but must also be considered for its fit with the work of other stakeholders. The final strategy will be derived from further consultation with stakeholders from business, arts, culture, tourism, local government, education sectors and the general public. • An online survey • A stakeholder symposium • One-on-one consultations with stakeholders • A public meeting Through this consultation, a subsequent version of this document will represent a strategic plan for consideration by Kitchener City Council. The approval of the plan guides economic development to facilitate and monitor the actions to fulfill our shared vision. Kitchener will lead a thriving innovative regional economy that supports a livable community During May and June 2011, consultation is intended through: 2 DISCUSSION PAPER 2 ~ 7 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM INTRODUCTION December 31, 2002 was the last day that the Canadian dollar closed below $0.64 US dollars. In the following eight months the dollar climbed steadily against its US counterpart. By the time the City of Kitchener was preparing for the 2004 budget, it was 20 per cent above its December closing value. Industry and community leaders were concerned about the impact on the city's manufacturing base. At that time, manufacturing constituted over 27 per cent of total employment in the Kitchener-Cambridge-Waterloo Census Metropolitan Area.' City leaders started looking for ways to bolster the city's economy against ongoing manufacturing job losses. and encourage the development of new industrial areas in north Cambridge and Woolwich Township around the Region of Waterloo International Airport. The question was put to the people of Kitchener through an extensive public consultation process. A panel of citizens assembled in the Council Chambers to debate the options and formulate a recommendation. They strongly supported the second option and recommended the establishment of the $110 million Economic Development Investment Fund to make it happen. Also in 2002, Richard Florida published "The Creative Class", changing the economic development landscape. Florida's work built on that of Michael Porter's work on jurisdictional competitiveness and economic clusters by focusing on the role of talented and creative workers in the emerging economy. It emphasized the role of place in attracting and retaining the minds needed to compete in the increasingly competitive global market. A third factor came to play in the City's deliberations in 2003 and 2004 -the city was exhausting its supply of greenfield industrial land. Soon it would have no locations available for manufacturing firms looking to expand in the city. One option was to extend the Huron Business Park to the southwest, but was prohibitively expensive as the area had extensive environmentally sensitive areas and the topography was not well-suited to manufacturing. The second option was to focus on building new knowledge-intensive clusters in the downtown The Kitchener-Cambridge-Waterloo Census Metropolitan Area (CMA) consists of Kitchener, Cambridge, Waterloo, Woolwich and North Dumfries. DISCUSSION PAPER Today, we are building on the foundation laid by those decisions. By the time the 2008 financial crisis and recession struck, the implementation of the new economic development strategy and EDIF-funded projects were in full swing. In addition to the $100 million in public sector and institutional projects, over $140 million in private sector investment had already been made in the downtown and another $130 million was in the planning process. The seeds of new digital media and life sciences industries had been sown. Employment in the downtown had grown at 4 to 5 per cent annually since 2004 and held its own and rebounded quickly after the recession. Though the recession resulted in significant job losses in Waterloo Region, overall this urban economy performed at a higher level and rebounded much quicker than its counterparts around Canada. Today, the urban economy is on a strong footing. Manufacturing employment has actually increased by 6.5 per cent in 2010. Total employment is at record highs. Personal income is growing. And, the private sector continues to invest significantly in both the Downtown and suburban areas of the city. 3 2 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 However, we live in uncertain times. Global energy markets are volatile. The future response to climate change creates both challenges and opportunities. Changing demographics will put tremendous pressure on our economy over the next five to 10 years. Social media has changed the way that we communicate. New industries are emerging at lightening speed and technological innovation is starting to drive growth in the developing world -even in places like Africa. As Kitchener finds itself competing globally for businesses, investment and talent, a passive approach to economic development will almost certainly result in missed opportunities. A framework to respond to emerging opportunities and challenges will better position the city to capitalize on the strengths of this community. Kitchener's new Economic Development Strategy must position the city to thrive in this time of tremendous change. It must help position our innovative businesses to compete on the global stage. It must help us attract and retain both investment capital and talent. And, it must do so while helping to reduce our environmental foot- print and build an inclusive community. We are asking people to engage in a discussion about the economy of the city of Kitchener and the best way for us to build on our momentum to position our city for the future. Please take the time to consider, discuss and provide us feedback on this critical issue. 4 DISCUSSION PAPER 2-9 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM ENVIRONMENTAL CONTEXT Global trends influencing our city Global recession and the financial crisis The 2007-2010 Economic Development Strategy was adopted as the United States was on the brink of recession. In 2007-2008, a liquidity shortfall in the US banking system triggered possibly the worst financial crisis since the Great Depression. Contributing factors include subprime lending and the US housing bubble, rising inflation and interest rates, and an increase in oil prices. The ensuing global recession of 2008-2009 was more moderate in Canada than in the United States. In Canada real GDP fell 3.3 per cent during a recession that lasted only three quarters The unemployment rate rose by 2.5 percentage points, a more moderate increase than in past Canadian recessions. While an international recovery is underway, the national and provincial economy remains vulnerable to factors such as the European debt crisis, ongoing volatility in global energy markets, Figure 1 ~ $160 •L $140 o c w L $120 ~ ~ $100 'L L ~ Q $$0 ~ ~ $60 and the increasing competitiveness of emerging economies of the developing world. Global energy security, climate change policy and transportation The international and national response to the interrelated challenges of climate change and energy security will have significant effects on Kitchener's economy. Volatility in global energy markets in the past four years appears to be continuing with oil prices increasing 20 per cent in 2010 and crossing the $100/bbl level in early 2011.2 (see Figure 1) The International Energy Agency projects that after the year 2010, increasing world consumption of oil can only be met through new and more expensive sources, meaning that high oil prices will be here to stay. (see Figure 2) Continued growth in the developing world will also drive demand for oil over the planning period, while demand in North America and Europe is forecast to remain flat and even fall as new transportation standards and technologies are put in place. Price of oil ~ ~ $40 a~ ~ $20 as °~ $0 1997 1999 2001 2003 2005 2007 2009 2011 DISCUSSION PAPER 5 2-10 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 Figure 2 ~ 144 1= 84 rsa 44 24 World oil production by type Transportation issues are global with respect to the effect of oil prices, but the magnitude of the impact of oil shocks is determined locally - depending upon the reliance of the community on cars for transit, and trade activity. According to CIBC World Markets' former chief economist Jeff Rubin, one of the impacts of higher oil prices will be a change in consumer behavior, with more people choosing alternative modes of transportation as prices increase.3 Over the medium to long-term this will affect the form of the city with larger numbers of people choosing to live near cost-effective and efficient transit, placing greater demands on the public transit system. Renewable energy is emerging as an economic force as increasing concern over the environmental impact of conventional fossil energy creates a demand for lower carbon alternatives. To support the expansion of renewable energy, the Province of Ontario passed the Green Energy and Green Economy Actin May 2009. This included leading-edge incentives for renewable energy generation; s "Why your world is about to get a whole lot smaller", Jeff Rubin. 2009. 6 Uncon4entional ail Natural gas liquids Crude oil -fields yet to be developed ar found ~r Crude ail -currently producing fields - Total crude oil Source: International Energy Agency, www.iea.org notably the Act made possible the Feed-In Tariff (FIT) program which makes renewable energy financially viable. One objective of this legislation is to establish competitive green energy clusters in Ontario, creating jobs and economic opportunities in the process. A strong Canadian dollar From 2002 to 2007 the Canadian dollar appreciated over 40 cents against the US dollar, achieving parity in November 2007. It fell back below $0.80 USD during the 2009 recession and has since moved back to parity with increasing oil prices and the strength of Canadian labour and financial markets. (see Figure 3) The five-year increase in currency values was one of several factors contributing to a decline in the competitiveness of local manufacturers and service exporters. Manufacturing employment fell dramatically over that period, with nearly 500,000 jobs lost in Canada, including nearly 300,000 in Ontario. Locally, manufacturing fell over the decade by about 15,000 jobs, with 2010 offering a small sign of improvement with slight growth. It is likely that the Canadian dollar will remain strong for the foreseeable future. DISCUSSION PAPER 2-11 1994 1995 244[} 2445 2414 2415 2024 2.425 2430 2435 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM Figure 3 CDN-US Exchange Rate 1.20 ~ 1.00 p 0.80 U ~ 0.60 a~ .. ~ n an 0 z 0.20 0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Bank of Canada, www.bankofcanada.ca/ wireless banking is transforming the African Rise of innovation in emerging markets economy where six of the world's 10 fastest growing economies are now located.5 Over the past four years, one of the forces on the global economy has been the emergence of an innovation economy in the developing world. For decades, the large industrialized economies have seen employment in low-skilled manufacturing transferred to the developing world -primarily India, China and southeast Asia. However, the effectiveness of investments in education and infrastructure and the emergence of a middle class in these countries has given them the capacity to drive innovation independent of the western advanced economies. Western companies now have significant research and development units located in emerging markets. This new capacity is now beginning to leapfrog capacity in North America and Europe in key industries such as renewable energy and wireless communications. China has become a hot bed of development in the solar industry, and is forecast to exceed the US in output of published scientific papers by 2013.4 In East Africa, innovation in a BBC News, "China 'to overtake US on science' in two years", March 28, 2011. http://www.bbc.co.uk/news/science environment-12885271 DISCUSSION PAPER This trend challenges the developed world and its industries to engage with emerging markets to remain relevant and competitive on the world stage. Talent and immigration The Canadian labour market will be dramatically altered over the next decade. The post-war baby boom generation is now retiring and the growth in the Canadian-born population is low, making immigration essential, while sought-after knowledge workers are increasingly mobile. Nationally, immigrants who arrived during the 1990s accounted for about 70 percent of net labour force growth between 1991 and 2001. Statistics Canada projected in 2006 that this e The Economist: Daily Chart. "Africa's impressive growth", January 6, 2011/ 7 2-12 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 proportion will increase to 100 per cent in the following decade.6 and Wikipedia, has become one of the leading online brands.10 The increasing role of immigration in labour force growth creates challenges for economic growth, as newly arrived Canadians find it more difficult to secure work, and tend to earn less than Canadian-born workers.' Finding ways to maximize the potential contribution of immigrants benefits not only the economy, but helps improve the quality of life of new Canadians. While we work to attract immigrants to this region, there is an additional challenge in trying to retain the nearly 100,000 students attending our leading-edge post-secondary education institutions. The flow of immigrants and students in and out of this community has still left more than 2,000 high- techjobs unfilled, according to Communitech. Knowledge workers are extremely mobile, and local businesses must be able to compete with great companies in great cities around the world. With an aging workforce, population growth reliant on immigration, and talent lost to outside opportunities, it is imperative that a competitive economic development strategy targets talent attraction and retention as a foundation for all activities. Social media Social media has become a major global force with 22 per cent of time spent online on social media sites.$ There are over 500 million active users of Facebook,9 which, along with YouTube s Statistics Canada. Education Matters: Insights in Education, Learning and Training in Canada. "Literacy skills among Canada's immigrant population", February 28, 2006. Ibid. $ Nielsen, 2010. s Facebook, 2011 8 The speed of the adoption of social media tools by people and organizations around the world has transformed communications. Social media creates both economic opportunities and new tools to advance the urban economy. The City of Kitchener has adopted a proactive posture towards the use of social media tools with a multi-pronged Social Media Strategy. As well, the key concepts of social media have been applied to create the Manufacturing Innovation Network - a model for leveraging technology to facilitate innovation in a cluster in transition. 1D Nielsen. 2010. DISCUSSION PAPER 2-13 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM Local trends shaping our progress Regional economic performance The City of Kitchener is part of a regional economy with a history of success through difficult transitions. Innovation and entrepreneurship has allowed the local economy to adapt to global trends. Most recently, the local economy was forced to respond to a global recession, but is now posting strong growth. According to the Conference Board of Canada, Figure 5 Kitchener-Cambridge- Waterloo CMA 7% ~..~...ta..a..~.e,.~+ a.eT.~..esa. n..,..e. na.+s.hs.r nnn~ ®a.,...'..e..~+.~.se.~ Barrie 5% Kitchener-Cambridge- W aterloo 3% 1% -1% St. Catharines-Niagara Brantford _3% Windsor London Guelph -5% -7% -9 Oct-OS Dec-OS Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 lun-10 Aug-10 Oct-10 Dec-10 Feb-11 Source: Statistics Canada, www.statcan.gc.ca Figure 4 Percentage change in employment since 2000 50.0% 40.0% 30.0% v ~ 20.0% C v 10.0% v rn f6 0.0% - c v w -10.0% a -20.0% -30.0% -40.0% 2000 the Kitchener-Cambridge-Waterloo Census Metropolitan Area (CMA) posted the second highest real GDP growth rate in the country in 2010, at 5.8 per cent. This is expected to moderate in 2011 to 3 per cent. During the recession, local labour force participation remained high -nearly always above 70 per cent -which contributed to a high unemployment rate. Yet now, outside the Greater Toronto Area, the Kitchener-Cambridge-Waterloo CMA is one of only two CMAs to recover all the jobs lost during the recession. (see Figure 5) This demonstrates the resiliency of the local economy. i ~- ~ ~- . ..1 -~_a ~- - r Canada Services- producing sector - ~ ~' ener-Cambridge- - - Canada laterloo~-MA ~ ~Ontar'io -- Manufacturing 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Statistics Canada, www.statcan.gc.ca DISCUSSION PAPER 9 2-14 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 In 2000, manufacturing employment peaked at 68,600, about 31 per cent of total employment. Since then manufacturing has fallen almost every year, but experienced a slight recovery in 2010. (see Figure 4) Local manufacturing employment now makes up just over 20 per cent of total employment, yet remains the leading industry of employment with 53,700 employees. While employment is the best proxy for overall economic performance at a local level, other indicators such as housing starts and building permits demonstrate that the city is rebounding from the recession. In 2010, housing starts were up 22.5 per cent compared to 2009, and building permits rose 36 per cent. Growth management The Province of Ontario projects that Waterloo Region will grow by about 200,000 to reach a population of 729,000 by 2031, with 40 per cent of new development, housing and employment occurring in the centre of the city.12 Half of that growth will occur in Kitchener, which is expected to grow by as many as 100,000 people and 40,000 new jobs by 2031.13 The City of Kitchener's Growth Management Strategy (KGMS) identifies six goals: The Economic Development Strategy and KGMS are complimentary in that they both prioritize urban renewal, culture and creativity, more transportation options and a strong economy. The KGMS urban design direction in Kitchener is to place greater emphasis on built form and place-making. It emphasizes access to high quality amenities that include a mixture of land uses and a range of housing and transportation options. Rapid transit The Provincial and local policy framework is well- suited to support the adjustment to a more energy efficient urban form. The Province of Ontario's Places to Grow policy, the plan to extend GO Transit to downtown Kitchener, the Region of Waterloo's Transportation Master Plan, and the Region's and City of Kitchener's Growth Management Strategies all support the development of a more sustainable transportation system. It is expected that the population in the central transit corridor will increased by 100,000, yet there is little room to expand the existing road network.14 With increasing emphasis on reducing emissions and oil reliance, rapid transit offers a sustainable transportation solution. But it also • Enhance our valued natural and cultural heritage resources where people want to live, invest and be creative • Create vibrant urban places • Ensure greater transportation choice • Foster a strong economy • Strengthen communities to improve social, cultural and recreational networks • Manage change in an effective and coordinated manner 12 Province of Ontario, Places to Grow, 2005. 13 Kitchener Growth Management Strategy, 2009. 10 plays an important role in talent attraction as workers look to communities that offer alternatives to car ownership and commutes. The environment The industrial revolution in Kitchener (1850- 1990) advanced Canada from a nation of farmers and fishermen to our current information age. The cost of our advanced standard of living is a legacy of soil and ground waiter contamination 14 The Region of Waterloo, http://ra pidtransit.region.waterloo.on.ca/faq. html DISCUSSION PAPER 2-15 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM from previous land use. Kitchener's future reurbanization and redevelopment will provide ongoing opportunities for the restoration of our natural environment. offer local food. Through the success of the CFE, local food becomes an economic driver creating wealth and jobs in the community." Residents have indicated through the "Who are you, Kitchener?" campaign that the environment is important, and that they expect the municipality to act as an environmental steward. This means "making green living easier" with more transportation options, and incentives for conservation.15 According to the 2009 Environics Survey of Kitchener residents, 71 per cent of respondents indicated that protecting the environment and improving sustainability are high priorities.16 Offering a policy on environmentally sustainable growth is not only attractive to residents, but also the business community, especially with respect to the issue of managing transportation as a means of attracting talent. Local food movement The local food movement is associated with environmental responsibility as long, global supply chains have a greater environmental impact, and are vulnerable to rising oil prices. As well, local food is presumed to be healthier as it does not require additives/processing to maintain its quality. The local food movement is now spreading globally. While local food is associated with proximity, to be successful it has to be able to compete in quality as discriminating consumers demand flavour, variety and food safety. But an equally important part of local food is about supporting community food enterprises (CFEs) -the food producers or retailers that 15 "Who are you Kitchener", 2010. 16 2009 Environics Survey. DISCUSSION PAPER Tourism The Waterloo Region Tourism and Marketing Corporation (WRTMC) was launched in 2007 to establish a collaborative regional approach to tourism. This proved to be consistent with the provincial direction for tourism, as Ontario began restructuring the tourism industry by supporting the formation of 13 new tourism regions in 2010. Waterloo Region is positioned in Region #4, which extends west to Lake Huron. Each Regional Tourism Organization is responsible for working with tourism partners to enhance and grow that region's tourism products and marketing activities. The intent is to better coordinate tourism marketing and management, attract increased visitation, generate more economic activity and create jobs across the province. The province will help the industry transition to the new tourism regions by providing $25 million in each of the first two years of operation. This funding is in addition to the $40 million in ongoing annual funding announced in the 2009 Ontario Budget. Tourism ranks eighth among Ontario's export industries and employs over 200,000 people. In Waterloo Region in 2007 tourism accounted for $300 million in GDP and employed more than 5,000 people -about 2 per cent of total employment. There were 3,531,496 person visits locally, primarily from domestic tourism.'$ ""Community Food Enterprise: Local Success in a Global Marketplace," Michael Shuman, Alissa Barron and Wendy Wasserman, 2009. '$ WRTMC Strategic Plan: 2010-2015 11 2-16 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 The WRTMC Strategic Plan for 2010-2015 identifies the following direction. Vision: The Waterloo Region will be widely recognized as a must-visit destination, providing visitors with a varied and exceptional experience. Mission: Our Mission is to increase visitors and tourism in the Waterloo Region by focusing resources on promoting the region and its attractions to high-potential markets. WRTMC will promote individual attractions as well as marketing the region as amulti-faceted destination. In particular, the region has strength in festivals and events. Arts and culture Kitchener has many cultural assets including the Centre in the Square, the Conrad Centre for the Performing Arts, the Kitchener-Waterloo Art Gallery, THEMUSEUM and many successful events like the Blues Festival. However, there has not been a co-ordinated approach to the role of arts in the community to date. Therefore, the Prosperity Council has established the Creative Enterprise Enabling Organization (CEEO) to cultivate the creative economy. The CEEO will endeavour to create employment and prosperity in creative industries, and to attract the talent that will make this possible. But more than that, the outcome - a vibrant arts scene - is part of talent attraction for all business clusters, making it a key success factor for economic development. 12 DISCUSSION PAPER 2-17 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM ACCOMPLISHMENTS TO DATE The 2007-2010 Economic Development Strategy was in place during a tumultuous economic period. With the recession of 2008-2009 and subsequent recovery, the strategy proved to be flexible to accommodate changing economic circumstances. Some of the successes during this time period include the launch of the Manufacturers Innovation Network (MIN), the establishment of the Communitech Hub, implementation of the King Street Streetscaping, and adoption of a region-wide Brownfield incentive program modeled after Kitchener's program - a program that has made possible the redevelopment of projects like the Lang Tannery. Additional results can be reviewed in Appendix C. Results from 2007-2010 Economic Development Strategy and specific outcomes related to the Economic Development Investment Fund (EDIF) and Downtown Trends & Indicators, are outlined below. EDIF is driving change In 2004, the City of Kitchener established the Economic Development Investment Fund, known as EDIF. The fund addressed immediate opportunities to make strategic investments in downtown locations for the Wilfrid Laurier University Faculty of Social Work and the University of Waterloo School of Pharmacy. The fund also included allocations for downtown streetscapes, parking solutions, and greenfield industrial land projects. EDIF was always seen as a long-term program with results expected beyond its 10-year time frame. However, preliminary analysis of the early impacts of EDIF suggests it has made a positive economic impact. Assessment is growing faster near EDIF investment properties, with growth nearly twice as high as other downtown properties. Investments in the Shirley Drive employment lands secured jobs, and caused assessment and tax growth. Downtown employment and business counts are growing, while vacancy is falling. The redevelopment of Kaufman Lofts has produced 270 new residential units, a project that proceeded only after the City confirmed its investment in the nearby School of Pharmacy. Another nearly 450 residential units will be made possible by EDIF, through the redevelopment of Centre Block as City Centre Condominiums and the Upper Storey Residential Program. Finally, as of 2009, for every EDIF dollar, other partners have contributed, or will contribute $1.78, which demonstrates the capacity to leverage city funds for stimulus. Further, in the area surrounding the UW Health Sciences Campus the private sector has invested approximately $70 million and plans are underway for an additional $23 million investment in 2011-2012. Additional residential construction in the downtown illustrates investor confidence in the projects made possible through this fund. It is this benefit of EDIF that is most difficult to quantify. However, it is clear that the City's commitment to development, and willingness to invest gave the private sector confidence in the long-term direction of the Kitchener economy. Downtown is coming alive Beginning with the implementation of The Downtown Strategic Plan in November 2004, the focus of downtown development has been to maximize economic growth and diversity in the central business district, benefiting Kitchener as a whole. The objective of the action plan is to support the residential, cultural and investment potential of a community that is designed as a place for people to live, learn, work and play. DISCUSSION PAPER 13 2-18 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 Since its inception in 2004, significant results have been made possible by the Economic Development Investment Fund. While the fund provided direct benefits with EDIF-sponsored projects like the University of Waterloo School of Pharmacy, it also stimulated investor confidence and triggered private sector investment. Highlights to date include: • Major employment investments include the Tannery District, Breithaupt Block and consolidated Provincial Courthouse • High density residential developments such as Kaufman Lofts, Mansion Lofts, Le Marche Residences, City Centre Condominiums and Arrow Lofts. • Digital high tech firms such as Google, Desire2Learn, and Electronic Arts locate in downtown Kitchener. • Office vacancy is at an all-time low, as is residential rental vacancy at 1.6 per cent. • Special event attendance is at an all-time high, peaking with the Kitchener Blues Festival in August 2010 with 62,000 visitors, filling local hotels with tourists in addition to a residents, visitors and employees), but still exist, particularly among suburban. As well, too many retail spaces remain vacant and many surface parking lots hold the potential for redevelopment. Vacant downtown properties can hold an additional 2,000 residential units and over 1,000,000 square feet of new office space. Together these projects can bring an additional 7,200 residents and 5,000 employees to the downtown over the next 10 years. One aspect of downtown redevelopment that is particularly complex, with along-term time frame, is transportation planning. Transit changes are seen as a requirement for successful reurbanization, economic vitality, talent attraction and environmental sustainability. GO Transit, the future multi-modal hub, and rapid transit are key initiatives to expand public transit for future economic growth. The planned developments in these areas will accelerate the process of change underway in downtown Kitchener as well as the overall structure of the city and its labour markets. broad regional audience • King Street Streetscape, facade grants, and high quality architecture reshape perceptions of downtown. While there have been considerable improvements in a number of indicators, the long- term nature of many EDIF investments means that there is a time lag before many benefits are fully realized. In addition, there are still some issues that require attention, such as a disproportionate number of residents (2,085) compared to employees (+12,000). According to the most recent Environics Survey19 negative perceptions are disappearing (particularly among downtown 19 http://kitchener.ca/en/insidecityha II/resources/EnvironicsSurve yResults2009.pdf 14 DISCUSSION PAPER 2-19 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM OUR APPROACH Corporate direction stakeholders such as Communitech and Canada's Technology Triangle (CTT). Through extensive public consultation, the City developed a 20-year strategic plan, which was released in 2007. This strategic direction was determined from the results of exercises like "Who are you, Kitchener?" and the Environics Survey. As well, the corporate plan built upon the work from the following plans: • 1999/2000 - Charting a Path for our Future. • 2004 -Healthy Community Plan for the City of Kitchener • 2005 - A Plan for a Healthy Kitchener The 2011-2015 Economic Development Strategy offers a roadmap to achieve the community priorities identified in the City of Kitchener's Strategic Plan. Stakeholder consultation This discussion paper presents the input received to date and translates it into the goals, objectives and potential actions. Input received Priorities including innovation, sustainable living, quality of life and leadership emerged from consultations so far. As a way to incorporate these priorities into economic development practices, the innovation/cluster-based approach to economic development suggests that the role of the economic developer is to enable investors, talent, and the business community to come together. Thus, the greatest benefit is realized by using astakeholder-based approach, with greater emphasis on staff in a facilitation role to leverage the capabilities and resources of the entire community. underway Process Both the Economic Development Advisory Committee (EDAC) and Downtown Advisory Committee (DAC) participated in a series of consultations to provide feedback on the previous strategy and offer suggestions for the next phase. As well, economic development staff participated in workshops which built upon the feedback from the advisory committees. These sessions provided the values and themes that are outlined in this document. Recommended approach Innovation and cluster-based economic development In the past, efforts focused on the attraction of industrial investment to greenfield business parks. Economic development has changed dramatically in the 21St century. Successful economic development no longer emphasizes land development, but rather engagement and innovation in a cluster-based economy. The draft strategy will frame discussions for the next phase of consultations, which includes reporting to senior staff, council and advisory committees. As well, the public component will include online surveys and a local economic symposium. Finally, this document will be considered for its fit with the work of partners and DISCUSSION PAPER Economic clusters are "geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that are 15 2 ~ 2~ BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 present in a region."20 Clusters arise because they increase productivity and support innovation. However, economic clusters also have a life cycle that is affected by changes in technology, consumer preferences and global markets. In Kitchener, some of our historic industries included leather products, buttons, and tires. Each of these was displaced by market forces. But, in spite of these losses, employment has continued to grow as business leaders and labour markets adapt to capture, and in some cases create, new opportunities. Cluster development stages: • Embryonic clusters -early stages of development • Established clusters -room for further growth • Mature clusters -stable, but expansion is difficult • Declining clusters -reached their peak and are contracting With the transition away from traditional economic development, emphasis shifts to new areas, as shown in Figure 6 below. The chief competitive advantages were once the availability of natural resources, transportation networks and labour costs. Now, specialized talent, research capacity, community openness and social networks, as well as urban design and cultural resources are key factors driving investment decisions. This has altered the way that we think about economic development. Where it was once described as "smokestack chasing" it is now about facilitating development and innovation in a community. Such a community will attract investment and talent. With this change in approach, the roles of staff have evolved from selling land, to supporting and leading activities that affect local cluster development. The shift from the role salesperson to facilitator requires staff to offer a much broader knowledge set as it is no longer sufficient to work with a knowledge of Kitchener's selling features; now staff must also be informed of the nuances of digital media or health sciences business needs, for example. Staff must monitor and understand industry trends and the climate for investment and innovation. In a rapidly evolving global market in which global industries are emerging and falling, innovation is the only way to ensure ongoing competitiveness in local clusters. Innovation ignites private sector investment. It helps to commercialize research, foster an entrepreneurial culture and positions companies to compete in global markets. Figure 6 Evolution of economic development . Regional innovation clusters ~~~~~" Business parks Physical proximity to Access to networks, talent, research Highways, rail suppliers, customers, Global reach Costs, incentives labour Market understanding Natural resources Lifestyle 20 Michael Porter, "Location, Competition, and Economic Development: Local Clusters in a Global Economy", 2000. 16 DISCUSSION PAPER 2-21 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM Innovation-based economic development requires: • Willingness to deviate from traditional and parochial perspectives • Encouraging public investment and risk taking • Developing trust through collaboration • Building consensus of constituents through education and participation • Support by key stakeholders including industry associations, education institutions, and government21 Innovation is more than the translation of ideas to technology. For Kitchener, it also represents a willingness to go beyond traditional boundaries and perspectives. Through intervention and facilitation, private sector investment is made possible which enables economic growth and diversification. Innovation and cluster-based economic development highlights the following activities: • Identify strengths, gaps, trends and develop foresight • Provide catalytic investment • Maximize successful networking, including connectivity with education, institutions, alliance groups, all levels of government • Developing policies and programs that include incentives for investment • Implement a customized marketing strategy for each cluster Waterloo Region and the City of Kitchener have a well-earned reputation for innovation. Institutions such as the University of Waterloo, Wilfrid Laurier University, Communitech and Conestoga College are nationally recognized for their role in technology, innovation and commercialization. They are also key partners of the City in its economic development strategy. 21 Metropolitan Policy Program at Brookings."The new `cluster moment': How regional innovation clusters can foster the next economy", Mark Muro and Bruce Katz, September 2010. DISCUSSION PAPER 17 2 - 22 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 STRATEGIC DIRECTION Vision Kitchener will lead a thriving innovative regional economy that supports a livable community Kitchener's size and position suggest a greater ability and responsibility to the larger community to act as a leader in economic development. Kitchener is the most populous municipality in the region, with employment comparable to both Waterloo and Cambridge combined. At the centre of the region, with the historic urban core, Kitchener is the major transit centre and home to government, business and community services. Kitchener is positioned to lead, but to do so in collaboration with regional partners as the local economy is tightly entwined. Through our regional partnerships, shared services and the exchange of information, we can work together to support the regional economy. • planning for attractive spaces and business developments, intensification, and balanced communities where the live-work experience is supported (Corporate priorities: Quality of Life, Development) • encouraging planning for pedestrian-friendly spaces, trails and parks (Corporate priorities: Development, Environment) • ensuring that different kinds of transportation needs are met (Corporate priority: Development) • creating a clean environment where Brownfields are remediated and renewable energy is deployed (Corporate Priority: Environment) • promoting events, arts and culture (Corporate priorities: Quality of Life, Downtown) • working to create an inclusive and supportive community that embraces diversity (Corporate priority: Diversity) Building a community that is safe, open and strong allows people and ideas to flourish and in that environment, economic prosperity is unrestrained. Innovation is emphasized in the vision, as it is an essential component of an adaptable and resilient business community. In a region that has been heavily invested in manufacturing in the past, innovation will drive diversification. In short, innovation is essential to building sustainable growth, as there is no guaranteed path to economic vitality other than the one that accepts the inevitability of change. While economic development works to create jobs, investment, and prosperity, it must be within the context of a livable community. This is not only beneficial to attracting talent, but it is also part of our social responsibility to all citizens. Some of the relevant areas that economic development considers include: 18 Mission Foster stakeholder collaboration to build an innovative and sustainable local economy The economic development vision emphasizes Kitchener's role in a regional economy. With the strength of community infrastructure including post-secondary institutions, research institutes, accelerator centres and other partners, we can leverage our own resources through a collaborative approach. This has enabled past successes like the Digital Media Hub, where Kitchener's thought leadership produced a DISCUSSION PAPER 2 - 23 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM partner-lead project that was backed financially by other stakeholders. Through this approach, we maximize our impact, and reinforce our commitment to the corporate mission: Proudly providing valued services to our community Therefore, the economic development mission places greater emphasis on the role of facilitator as a path to accomplish our goals. "The unique thing I've found about this community is the collaborative nature of business, government, the not-for-profit sector and the education sector" recession or an increase in oil prices can shock the economy, a flexible strategy enables us to respond. Relentless: We are committed to overcoming obstacles and we persevere to meet our goals. We face risks head on. Focused on talent: We need to ensure that this community can compete with global locations for talent by ensuring that young people want to stay after graduation; new Canadians are welcomed with open arms and diverse lifestyles are honoured. John Doherty, Chair of the Prosperity Council22 Values Corporate mobilization: Economic development is a corporate objective of the City of Kitchener and harnesses the capacity of the whole organization to achieve its objectives. City Departments, Division and Enterprises work in concert for the benefit of the larger community. Regional: Our economy is larger than that of some provinces. Its scale and complexity compel us to act in concert with other economic stakeholders. Partnerships and community networking: We work as a skilled intermediary, building connections with stakeholders. Global relevance: We work to raise the profile of our community to a global audience. Through CTT, Waterloo Region is promoted as a desirable location for business. Responsive: We need to be able to turn on a dime. While global or national issues such as a zz Anthony Reinhart, The Globe and Mail, "In high-tech hub, a pair of election horse races", April 13, 2011. Committed to a healthy community: We make decisions that support more than economic growth; members of the community must feel a sense of belonging, have their values respected, and their needs met. Vision and foresight: We must look ahead. This means scouring the academic and research landscape for catalytic ideas that keep our community above the trends. It means recommending bold action. These values are consistent with the prior economic development strategy, and the way we have always done business. DISCUSSION PAPER 19 2 - 24 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 OVERVIEW OF STRATEGIC THEMES The goals and objectives of this strategy further three strategic themes: an innovative economy, a cool, dynamic downtown, and an inventive approach. Prioritizing an innovative economy and a dynamic downtown establish the direction of economic development, while our inventive approach enables staff to apply creative, leading- edge methods that advances those themes. An innovative economy But beyond business growth, there are goals for downtown that are distinct from city-wide programming, including a focus on vitality and lifestyle, creating a vibrant retail scene, and increasing residential intensification to support a better balance of residents to workers. But a healthy downtown is also a component of the first strategic theme, for the role that it plays in attracting talent through an authentic urban environment. Innovation is essential to sustainable economic growth, and the first strategic theme captures the activity that makes this possible. Emerging clusters in particular depend upon the success of innovative start-ups, who in turn are in need of a support network that offers information and investment to enable their success. The region has an advantage over other communities in its culture that values the role of the start-up. From a history of entrepreneurship to the intellectual property policy at the University of Waterloo, this community has supported the development of an ecosystem in which start-ups flourish. But even in mature business clusters, innovation is helping to transform business activity. And the ability of this community to attract and retain talent will be pivotal in determining our capacity to generate new ideas, and fulfill the needs of growing businesses. A cool, dynamic downtown A healthy downtown is a key part of the larger regional economy. Downtown is implicitly affected by the first strategic theme; there are opportunities created in an innovative economy that can be directed to underutilized space in downtown. For instance, in the emerging life sciences cluster, downtown benefited from the conversion of a former parking lot into the UW School of Pharmacy. 20 An inventive approach Finally, a different approach to leveraging land and financial resources helps enable the success of the other two strategic themes. While traditional economic development meant the creation of industrial parks, this strategy focuses on meeting the needs of businesses for space in more creative ways. Emerging clusters can be accommodated in the urban environment on redeveloped sites. But talent, consumers, and businesses demand more; they want an attractive environment where streetscaping, signage and buildings reinforce a positive image of Kitchener. But this must all be done in an environmentally conscious way; new buildings can meet LEED standards, intensification on existing industrial land can preserve other greenfields for better uses, and renewable resources are protected. In this manner, the incubation and expansion of business is supported and socially-responsible businesses are attracted to a community that prioritizes sustainable development. To enable staff, economic development tools provide the analytical research and marketing materials necessary to attract investment, monitor a changing economy and to position the city to attract talent. As well, the redevelopment of its assets can act as a catalyst to advance the City's economic development objectives. DISCUSSION PAPER 2 - 25 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM Through past financial incentives and the funding available through the Economic Development Investment Fund, a great deal has been accomplished -from small projects such as the redesign of downtown business facades to the impressive redevelopment of the Epton lands into the University of Waterloo School of Pharmacy. All of these projects -big or small -contribute to the goals of one or both of the first two themes. With EDIF now fully allocated, it is important for the City to build a new set of tools to implement its ambitious economic development agenda. DISCUSSION PAPER 21 2 - 26 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 STRATEGIC THEME: AN INNOVATIVE ECONOMY Waterloo Region has a proven track record in innovation. Local businesses spend more on research and development as a percentage of GDP than Ontario, Canada and the US. In 2005, research and development reached 2.7 per cent of GDP in the region. In 2006, Waterloo Region patent applications per capita were far in excess of Ontario and Canada, and exceeded only by a few of the most innovative states in the US (California, Massachusetts and Minnesota).23 dynamic nature of cluster development and therefore acknowledge the essential monitoring that needs to occur to identify and support clusters with an increasing profile subsequent to the adoption of an economic development strategy. A flexible approach will ensure that we respond to emerging opportunities. Objective 1.1. Build emerging cluster: digital media "Over the last decade, Waterloo Region has become one of North America's leading concentrations of tech companies, academic and industrial R&D, commercialization expertise and venture and early stage capital. We want to build on this success through further investment in a world-class climate for research and commercialization in Waterloo Region." lain Klugman, President/CEO of Communitech24 Innovation drives cluster development. The economic development strategy is intended to facilitate innovation throughout the business life cycle, with assistance for start-ups through, for example, the Waterloo Region Small Business Centre or Digital Media Hub. But there is also support for mature clusters with, for example, the mature manufacturing sector accessing the Manufacturing Innovation Network. Goal 1. Business clusters prosper Each of the following objectives is intended to capture emerging growth clusters, or mature and dominant local clusters. But we recognize the zs Canada's Technology Triangle, "Waterloo Region - a leader in R&D expenditures and patents granted", November 6, 2008. za libid. 22 The complexity of digital media and the speed at which it is evolving has made it difficult to categorize and evaluate as an industry. It is estimated that in Ontario there are about 1,000 digital media businesses, employing 16,000 people in 2008. What is noteworthy its double- digitgrowth rates, which makes this cluster attractive for development.25 Current estimates are that the global market for digital media is $1.5 trillion.zs The 2007-2010 Economic Development Strategy identified significant local strength in digital media. The strategy concluded that existing anchor firms were the foundation of a globally competitive cluster. The result was a Communitech-lead effort to bring private and public stakeholders together to establish the Communitech Hub - a digital media and mobile accelerator centre in downtown Kitchener. The $47 million Hub was made possible through investment from Communitech, the City of Kitchener's EDIF, 30 companies, a $5 million grant from the Government of Canada, as well as a $26.4 million investment from the Province of Ontario. zs Ontario Media Development Corporation, http://www.omdc.on.ca/AssetFactory.aspx?did=6564 zs http://espressocapital.com/idmtc/index.php DISCUSSION PAPER 2 ~ 27 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM The Hub is a 30,000 square foot facility designed for collaboration on digital media applications, with a presence from local leaders including Research In Motion, Christie Digital, and Open Text. It has become a hotbed of start-ups, and attracted the co-location of expanding offices of Desire2Learn and Google in the Tannery. The incubation centre supports young companies to take business ideas to market in areas such as mobile platform development, gaming, film production and 3D medical visualization. "[The Tannery] is not just an emblem of the Southwestern Ontario city's long history of reinvention and resilience, but of Canada's ever more global economic ambitions." The Globe and Mai127 Potential actions creates an environment positioned to attract investment. As of 2006, Statistics Canada states that 140,000 people were employed in the arts in Canada, close to the same number (135,000) employed in the auto sector. Yet in 2010 in the Kitchener- Cambridge-Waterloo CMA employment in arts, culture, recreation and sport (7,300) is less than a third of manufacturing employment. Both Ontario and Canada have higher concentrations of employment in arts and culture occupations than Kitchener-Cambridge-Waterloo, indicating that there is growth potential for this cluster. There is a growing consensus that there is increasing momentum for support of the arts regionally, especially through the establishment of the Creative Enterprise Enabling Organization (CEEO), which will continue the Prosperity Council's earlier work to build economic success for the region through the creative sector. • Implement an aggressive business development program to expand, attract and retain digital media companies and create a critical mass of digital media businesses (e.g., games, social media) • Create networking opportunities for businesses, suppliers, consumers, post- secondary faculty, researchers and government • Work with stakeholders to ensure adequate infrastructure is available (e.g., fibre optic, broadband, reliable power supply) • Your ideas go here... Objective 1.2. Build emerging cluster: arts, culture and tourism A rich cultural living experience enhances the competitiveness of the region for talent and 27 Anthony Reinhart, The Globe and Mail, "In high-tech hub, a pair of election horse races", April 13, 2011. DISCUSSION PAPER The City of Kitchener's Special Events Strategic Plan compliments the work of economic development, as it aims to deliver festivals, events and celebrations, and supports urban vitality through activity.28 The Kitchener Market is the cultural experience of food. It is the intersection of local producers, consumers and, in the Marketplace, the culinary genius of some of Waterloo Region's greatest chefs.2~ Together, cultural assets and events are the foundation for a vibrant tourism industry and a deepening international brand for the region. This industry can create employment and wealth. But it also improves the quality of life in Waterloo Region, improves our ability to attract talent to growing companies and creates jobs in the tourism industry. zs City of Kitchener Enterprise Division Unit, Special Events Strategic Plan Implementation. 29 www.kitchenermarket.ca 23 2 ~ 2~ BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 Opportunities for Kitchener include capitalizing on the authentic urban environment to draw people for signature events. Further, Kitchener's emerging strength in digital media can intersect with art to create more opportunities for cultural and business innovation. Potential actions • Support the Waterloo Region Tourism and Marketing Corporation (WRTMC) strategy by developing distinctive events in the downtown • Support the Creative Enterprise Enabling Organization (CEEO) with a special emphasis on collaborating around plans for amulti-tenet arts facility and artist development/networking • Facilitate programs to increase artist income through business management support from the Waterloo Region Small Business Centre (WRSBC) • Your ideas go here.. . the region benefits from the University of Waterloo's WISE (Waterloo Institute for Sustainable Energy) and the Centre for Advanced Photovoltaic Devices and Systems. With this strength in solar energy, the Solar Industry Networking Group (SING) was formed under the umbrella of the Manufacturing Innovation Network (MIN) in April 2010. In the words of one of the region's solar industry leaders, Waterloo Region is, in fact, the solar industry capital of Canada. Wind energy generation is better suited to other geographic areas in the province, but there are local manufacturers capable of entering into the supply chain for wind turbine production. According to Canada's Technology Triangle (CTT), in 2010 nearly 75 percent of all business growth inquiries were in the area of clean technology or alternative energy sector, which demonstrates the local potential for this cluster. Objective 1.3. Build emerging cluster: renewable energy Ontario is positioned as a leader in renewable energy through the programs made possible by The Green Energy and Green Economy Act of 2009. The provincial policy makes possible a Feed-In Tariff (FIT) program which provides guaranteed pricing for long-term renewable energy contracts. With the incentives designed to benefit installations made in Ontario, there is new investment in Ontario to meet the demand for local products. These tools have made Ontario one of the most desirable locations to invest in renewable energy in North America. Ontario is the third largest North American market for solar photovoltaic installations.30 Waterloo Region is home to established solar companies like Arise Technologies, Canadian Solar Solutions Inc. and Photowatt Ontario Inc. As well, so Renewable Energy World, "Ontario Reaching the Top in Solar", August 23, 2010. 24 Potential actions • Work closely with CTT and partners in market attraction for solar and wind manufacturers/suppliers • Support integration of existing manufacturers into supply chain for wind and solar • Connect university researchers to the industry (currently through corporate visitation) • Your ideas go here Objective 1.4. Build emerging cluster: life sciences Waterloo Region's life sciences cluster is currently in its infancy; this is a sector with long pipelines through research and development to commercialization. The region is not known for life sciences nor does it benefit from institutions such as large teaching and research hospitals or large life sciences companies. However, it does have a surprisingly energetic group of small to medium-sized life sciences companies and remarkable research strength in areas of health infomatics and medical devices. DISCUSSION PAPER 2 - 29 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM The University of Waterloo Health Sciences Campus has become a catalyst for networking and investment in this emerging industry. Once fully developed, the new University of Waterloo School of Pharmacy will have approximately 500 students, 31 along side the more than 80 students enrolled in the McMaster School of Medicine.32 This gives strength to a developing cluster. The indirect and direct spin-off investments are emerging, though finding wet lab space in the Waterloo Region has proved to be a challenge. The Report on Life Sciences Commercialization Model for the Waterloo Region completed by Strategic Development Services in December 2009 had as its principle recommendation: "Build a wet and dry lab facility to house a life and environmental science incubator with a minimum of 30,000 s.f. for incubation and ideally another 30,000 s.f. to house graduates of the incubator and/or anchor tenants." A life sciences networking group has been established, which is meeting quarterly, organized by Communitech, and a Linkedln group is now active. Potential actions • Work with the UW to develop a Health Sciences Campus Master Plan • Determine all lab and commercialization requirements and develop facility options • Facilitate relationship between life sciences and digital media (e.g., digital modeling to replace wet labs) • Support CTT's investment attraction efforts in life sciences • Your ideas go here... Objective 1.5. Foster mature cluster: finance and insurance With more than 22,000 employees in this industry, Waterloo Region is recognized as an excellent location for financial services. It boasts access to North America's top actuarial program, highly-regarded business training at nearby post- secondary institutions, and a strong technology sector to support business activity. Participants in a recent corporate visitation survey indicated a desire for quality urban space, and concern was expressed over the cost and availability of parking in the downtown, and finding a balance between pedestrians, vehicles, buses, and alternative forms of transportation. Better local transit service and access to the GTA via GO Transit was cited as a priority, as was the need for more retail and higher-end restaurants catering to business lunches. The recent announcement of GO Transit service to the GTA commencing in 2011, and a decision on rapid transit will help to address these concerns. "When your staff actually come to you and say `I want to use alternative forms of transportation. I do not want to drive,' and ask you to put that in a building proposal, it means something..." Jeff Nesbitt, VP of Agfa Healthcaress Potential actions • Support plans for local insurance office expansion • Raise profile as a head office location • Develop program to raise region's talent profile 31 University of Waterloo School of Pharmacy, http://www. pharmacy.uwaterloo.ca/future-students/fag sz The Record, "Second Kitchener health-sciences building officially opens", April 8, 2010. DISCUSSION PAPER ss Frances Barrick and Terry Pender, The Record. "Support for light-rail trains gets boost", April 14, 2011. 25 2 - 30 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 • Explore opportunities to establish a Waterloo Region networking group • Your ideas go here... Objective 1.6. Foster mature cluster: food In 2007, food manufacturing generated about $2.5 billion in revenue locally, positioning this industry in third place in the CMA for revenue generated. There are 104 businesses in the CMA, including some of the larger manufacturers in Kitchener (e.g., Maple Leaf Consumer Foods, Dare Cookies, Weston Bakeries). Food processing is a mature area of the manufacturing sector, but it does show considerable promise for future growth. There are several reasons for this, such as: • the region's location on the 401, an hour west of the GTA, and thus close to major markets • proximity to adjoining agricultural areas and a ready supply of raw food for processing • the future opening of an Ontario Centre for Excellence in Food Processing at Conestoga College • the resources of the Ontario Ministry of Agriculture Food and Rural Affairs (OMAFRA) and the University of Guelph Food and Rural Affairs (OMAFRA) and other stakeholders to ensure an adequate land base for growth • Continue joint corporate visits with OMAFRA staff to local food processors • Your ideas go here... Objective 1.7. Identify and nurture other emerging clusters The rapid emergence of renewable energy as a cluster demonstrates the need for a responsive strategy. While there are unknown opportunities for future development, there are several known areas that should be monitored for their potential. Two clusters with growth potential are aerospace and water. Kitchener is home to established aerospace companies like Heroux-Devtek and Chicopee Manufacturing. In the area of water, the University of Waterloo is home to The Water Institute, and the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is proposing a Southern Ontario Water Consortium which is intended to bring together the expertise of industry, academia, and governments in all of the disciplines impacting on water management and technological innovation. Unlike many manufactured products, food needs to be processed close to where it is grown and where it will be consumed, and thus is somewhat insulated from foreign competition. In addition, North American consumers are concerned about the quality of their food, and rely on the assurances of inspections from regulated government food inspection agencies. Recent problems in the pet food industry have only emphasized the importance of these regulations and inspection. Kitchener has along-standing tradition of producing quality food products, and a trained labour force with expertise in this area. Potential actions • Explore aerospace cluster through future corporate visitation • Monitor industry response to evolving global market conditions and regional research projects • Monitor city's business community to identify other emerging clusters with potential to compete internationally • Your ideas go here... Goal 2. Manufacturers innovate and compete Potential actions • Facilitate relationships with the Region of Waterloo, the Ontario Ministry of Agriculture, In the Kitchener-Cambridge-Waterloo CMA, employment in manufacturing peaked in the year 26 DISCUSSION PAPER 2-31 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM 2000 at 68,600 jobs, making up 31 per cent of total employment. Since then manufacturing employment has fallen by almost 22 per cent or about 15,000 jobs. In 2010, a slight improvement raised manufacturing employment to just over 20 per cent of total employment, with 53,700 people employed in this industry. Despite these manufacturing losses, the Kitchener-Cambridge- Waterloo CMA still has the highest concentration of manufacturing employment among CMAs in Canada, just slightly higher than Brantford and Windsor. Objective 2.1. Facilitate growth opportunities While some traditional manufacturing subsectors (e.g., automotive) have been in decline, new opportunities are emerging. Renewable energy is a growth area, specifically in solar technology. Several Canadian and international corporations have plans to expand or establish a manufacturing presence in the region. There is a great deal of opportunity for existing manufacturers to diversify their operations and become part of the renewable energy supply chain. But there is still a need to support traditional subsectors. Objective 2.2. Support the Manufacturing Innovation Network To facilitate new manufacturing initiatives, the City of Kitchener developed the Waterloo Region Manufacturing Innovation Network, known as MIN. This online community was launched in 2009 with the support of community partners including local governments, post-secondary institutions, the Greater KW Chamber of Commerce, Communitech and Canada's Technology Triangle. The network connects manufacturers with these partners, other agencies, and stakeholders to create a more responsive and globally competitive manufacturing community through improved collaboration. Currently, a MIN social media strategy is being launched across multiple platforms including Facebook, Linkedln and Twitter. Potential actions • Strengthen online MIN community through a strategic plan with the objective of achieving financial sustainability over time, the implementation of a social media strategy and activating innovation • Your ideas go here... Potential actions • Identify and promote opportunities to transition from traditional production to new industries such as renewable energy • Support existing programming for retraining of laid-off workers • Develop the supply chain relationships in the manufacturing community to maximize the attraction of Tier One suppliers serving Ontario automotive OEMs • Support development of employment lands east of the Grand River • Support CTT's "Go to-Market" Strategy for Employment Land • Your ideas go here... DISCUSSION PAPER Goal 3. Small businesses succeed Small businesses are a source of tremendous energy in the economy. Many of our small start- ups will drive the future economic growth. We need to have a business environment that supports small business, where it is easier to raise capital, obtain critical expertise and find new customers and suppliers. Objective 3.1. Enhance small business services and programming From its three locations in Kitchener, Cambridge, and Waterloo, the Waterloo Region Small Business Centre (WRSBC) provides information and services to entrepreneurs and small business 27 2 - 32 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 owners in both the start-up and business development stage. In the community, the centre is regarded as a one-stop shop providing a wide array of business services essential to aspiring entrepreneurs and the small business community regardless of the industry sector or stage of business development (e.g., "thinking", "starting" or "growing"). The services are beneficial especially to those businesses with fewer than five employees, whose operators tend to have fewer resources and limited or specialized knowledge. In the Kitchener-Cambridge-Waterloo CMA businesses with 1-4 employees make up about 24 per cent of all businesses, though there are another 53 per cent of businesses classified as "indeterminate" which are typically less than five employees.34 The mission of the WRSBC is to encourage and contribute to the enterprising spirit and economic development of our community through the development of small business. Potential actions • Increase access to entrepreneurial resources by improving online tools, resources, market research and information • Support networking, advisory services and professional development training in sectors such as retail, food, health, arts, trades, youth and newcomers • Partner with local business organizations to promote available services, programs and events for small businesses and entrepreneurs • Facilitate collaboration between established small businesses and entrepreneurs, government and universities, and business associations to build stronger support networks and mentorship • Your ideas go here... Goal 4. Talented workers locate here 2010 WRSBC strategic plan objectives: • Provide small business and entrepreneurs with guidance and advice in a collaborative environment encouraging and enabling connectivity, interaction and innovation. • Improve access to information and resources and develop new programs that will focus on individual and sector-specific needs to ensure the continued success and diversity of small business in Waterloo Region. • Develop a strong network of collaborative partnerships to develop, facilitate and promote entrepreneurship and innovation for business owners, youth and new Canadians. • Foster entrepreneurial growth and development in Waterloo Region attributed to services offered by the WRSBC. sa Canadian Business Patterns, June 2010. 28 Bright, well-educated, energetic people are the life blood ofhigh-growth companies competing on the global stage. Access to talented people has emerged as a critical component of the decision- making process for business site selection. Companies in Waterloo Region require highly qualified personnel to support their growth over the long term. Even the manufacturing industry will require access to talent as it recovers from the downturn of 2008-2009. It is imperative to economic sustainability that Kitchener is a desirable choice for specialized talent and entrepreneurs. To foster innovation in mature clusters or emerging start-ups, Kitchener needs to focus on retaining graduates from the nearly 100,000 full-time and part-time post- secondarystudents in the region.35 Additionally, by 2016, Statistics Canada advises that 100 per ss University of Waterloo, Wilfrid Laurier University, Conestoga College, 2010 enrollment. DISCUSSION PAPER 2 - 33 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM cent of net labour force growth will be made possible through immigration.36 As a community of choice, Kitchener will need to meet the needs and values of this next generation and new Canadians. "Cities that fail to attract new people will struggle to stay prosperous and vibrant." Mario Lefebvre, Director, Centre for Municipal Studies, the Conference Board of Canada3 Across all strategic themes, goals address and support factors that attract talent include bustling downtowns, walkable neighbourhoods, diverse career opportunities, and a vibrant art and music scene. But rather than focusing only on talent attraction, this strategy also includes the retention and development of talent. As the business saying goes, "It is cheaper to invest in keeping a customer than to attract a new one." Our `customer' is one of thousands of post-secondary students already living and learning in the community. Potential actions • Facilitate implementation of programs that attract talent (e.g., cultural vitality programs, arts, and events that emphasize diversity) • Expand outreach activities and programs targeted at local post-secondary students, such as downtown tours to establish a connection to the community (e.g., Downtown Kitchener Walking and Tasting Tours) • Continue the implementation of a high quality streetscape and urban design standards to attract the interest of young talent, including new Canadians who have expectations for the urban experience • Support development of rapid transit and intercity rail to improve connectivity for knowledge workers • Support Communitech's talent web portal, www.waterlootechiobs.com, and their efforts to recruit for member firms. • Your ideas go here... Objective 4.2. Support programs for new Canadian talent Objective 4.1. Develop programs for talent retention and attraction Many activities will act as both retention and attraction programs. For example, offering tours to integrate post-secondary students into the community, providing affordable arts and culture activities and answering the question: "What is there to do in this town?" ss Statistics Canada. Education Matters: Insights in Education, Learning and Training in Canada. "Literacy skills among Canada's immigrant population", February 28, 2006. 37 http://www.conferenceboard.ca/press/newsrelease/10-01- 13/Six Canadian Cities Out of 50 Have the Winning Com bination that Attract Migrants.aspx Within the next decade, all of our labour force growth will be achieved through immigration. Qualified talent and investors are looking around the world for opportunities and this community must compete on this world stage. Attracting the right talent is the first challenge, but studies show that many Canadian immigrants are discouraged after several years and may not stay permanently. This risk must be addressed to ensure retention of talent. DISCUSSION PAPER 29 2 - 34 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 "As a daughter, you have immigrant parents and you realize your father and your parents not only gave you a life and a future, but gave 60 other [employees] a future. Media and Design programs, and Conestoga College Food Processing Institute • Support online innovation networks, retraining programs in transformative economic sectors such as growth areas in advanced manufacturing and renewable energy clusters Tania Sabados, daughter of Rapid Gear founder Julian Sabados38 Potential actions • Monitor work by the Community-University Research Alliance (CURA) studying the developing advantage of Tier I I cities for immigration retention in Ontario compared to the large cities of Toronto, Montreal, Vancouver, and Ottawa • Support UW Economic Development Study of immigrant tech workers and WLU Study to develop "Newcomers Business Network" to further increase chances of international talent retention • Support the Waterloo Regional Immigrant Employment Network (WRIEN) • Your ideas go here... Objective 4.3. Create new opportunities for talent development As a medium-sized city, Kitchener has a distinct advantage of being the largest urban centre in the heart of a region with approximately 54,000 full- timeand 44,000 part-time post-secondary students. Retaining local students is still the most cost-effective way to secure future talent. Potential actions • Support additional co-location of post- secondary education institutions, building on UW School of Pharmacy, McMaster School of Medicine, UW School of Optometry, WLU Faculty of Social Work, Conestoga College 38 Chuck Howitt, The Record. "Kitchener firm stays in gear for 35 years", March 30, 2011. • Your ideas go here... 30 DISCUSSION PAPER 2 - 35 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM STRATEGIC THEME: A COOL, DYNAMIC DOWNTOWN We are witnessing the reinvention of downtown Kitchener. It is rapidly becoming a dynamic downtown, where more and more people are living in cool places, working in cool environments, creating really cool products and services in exciting start-up companies. Nowhere is this more evident than in the Warehouse District. Tech workers are living in the Kaufman Lofts and working in the Tannery. In between, they're sipping cafe mochas at the Little Bean and Balzac's coffee shops while devising the next great mobile app, or discussing how to enhance e-learning worldwide. This is what downtowns should be about - people living and working in really cool places, creating really cool products. In fact, each district is slowly discovering its own cool, dynamic side: The City Centre District, with its contemporary new streetscape, has opened the doors to stylish new developments like the City Centre Condominiums, and attracted hip new businesses, like Treehaus, Gloss, Rarefunk and Silver Spoon Chocolates. And the community has embraced the new look. In 2010, King Street hosted the largest festivals in the city's history - 23,000 to Cruising on King; 48,000 to the Christkindl Market; and 63,000 people at the Kitchener Blues Festival. THEMUSEUM has delighted and inspired by showcasing exhibits varying from dinosaurs to Figure Andy Warhol. And the Conrad Centre ~~~ for the Performing Arts has preserved a community-based venue for the performing arts. Pedestrian traffic on King Street has more than doubled .- '" , over the past five years, while the number of outdoor cafes is expected to grow to 14 in 2011. '~`- . The Market District is slowly become the region's culinary showcase of international cuisine. Thai, Vietnamese, African, Mexican, Caribbean, EI Salvadorian, Greek... you name it, you can probably find it here. With the Kitchener Market consistently drawing 10,000+ people every single week, more and more foodies are discovering downtown's hidden gems. With the completion of the consolidated Provincial Courthouse in 2013, more than 1,000 lawyers, judges and social administrators will begin to immerse themselves in the rich tapestry of flavours. The Civic District is home to the arts. From Bryan Adams to Hawksley Workman and Melissa Etheridge, the Centre in the Square played host to more international acts in 2010-2011 than ever before. The KPL is getting a contemporary makeover, while the KW Art Gallery and the Registry Theatre continue to host a mix of internationally-acclaimed and locally-developed exhibits and performances. With a new long-term vision, this district is poised to truly stake its claim as the epicenter of arts in Waterloo Region. Finally, the Warehouse District's transformation can be explained with three words - `King and Victoria'. While the first wave of change saw the arrival of the Kaufman Lofts, School of Pharmacy and School of Medicine, the latest wave is bringing new life to the Tannery and Breithaupt Block. The opening of the Communitech Hub will 7 NTQWN C}ISTRICTS 1arehouse City -=~' i T' ~ .~ ~.... DISCUSSION PAPER 31 2 - 36 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 no doubt place the epicenter of creative industries squarely on the Warehouse District. The decision of tech powerhouses Google and Desire to Learn to chose the Tannery as their new homes is a clear message that today's creative minds want to work in cool places, like Downtown Kitchener. We're just getting started The transformation is just beginning. New developments and new programs continue to emerge, such as: • The arrival of GO Transit service • A planned multi-modal transit hub at King and Victoria • The planning and development of six new residential developments, including the future completion of Arrow Lofts • More than 15 fagade improvements • A formalized Downtown Live program which brought over 100 live music acts to King Street in 2010, showcasing local emerging talent • New festivals celebrating Chinese New Year, St. Patrick's Day and Cinco de Mayo • New infrastructure enhancements to Hall's Lane, Otto Street and three downtown parkettes. vacations, etc. No other time in the history Waterloo Region will downtown merchants be better positioned to flourish than over the next 10 years. But to capture these markets, Downtown Kitchener needs to be positioned as the leading and most desirable commercial and residential destination in the region. Be the tree that bears the fruit for the next generation Twenty years from now, residents, politicians, critics and supporters will look back on today's action. Did we make the right decisions today to create the downtown that they will embrace and love? Will an unwavering pursuit of excellence and style today, build not just a reurbanized downtown, but a proud and boastful city centre? Downtown's most dramatic and influential growth period looms ahead. No other generation will get to reinvent downtown as ours will. Do we strive for cool and dynamic, or settle for dull and typical? In the end, the marketplace will dictate the answer. But if lessons can be learned from projects like the Kaufman Lofts, Lang Tannery and Arrow Lofts, this community wants excellence. Not just chic appearances, but true urban vitality. All totaled, from 2003 to 2016, Downtown could witness a transformation in excess of $600 million dollars of new investment in building projects in a great city. A growing urban market From 2011 to 2016, the number of urban minded Kitchener residents is expected to grow by about 17,000 people. Retired baby boomers will begin to downsize and rediscover their cities. The children of the boomers will graduate university, looking for the action while preparing to make their first home purchase. Combined, these 17,000 people will spend over $200 million on discretionary purchases every year. That's $200 million spent on clothing, dining, entertainment, gym memberships, 32 Goal 5. People make downtown the urban heart of the region "The wall is down. Kitchener is as cool a place to be as Waterloo." John Lind, Colliers39 Objective 5.1. Stimulate vitality Downtown has always been, and will continue to be, first-and-foremost, a place for people. To this 39 Chuck Howitt, The Record. "Real estate market sizzling in region's commercial sectors", January 20, 2011. DISCUSSION PAPER 2 - 37 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM end, the City has invested in creating people places: • Apedestrian-first, festival-focused King Street • Anew Civic Square • Anew Speaker's Corner • The Kitchener Market and Piazza • Anew Victoria Park entrance • The Health Science Campus • A modernized Kitchener Public Library • New public art • The Downtown Community Centre These spaces provide the physical foundation for the future of downtown life. While this vitality will occur organically, the City and its partners have a role to play in stimulating great people activity. It's time to shift from focusing on the `place' and to start focusing on the `people' part of the equation. In 2010, downtown saw a glimpse of its long-term potential. Signature festivals and events, such as the Blues Festival and Cruising on King, drew record attendance figures. The first season of Downtown Live brought more than 100 free live performances. THEMUSEUM is drawing more than 90,000 visitors annually. The Marketplace brought a new culinary dimension to the Kitchener Market. New retailers brought new products and new life to the core. Downtown restaurants took advantage of King Street with a record number of outdoor cafes and patios. While tourism is a regional initiative, the City of Kitchener is still providing visitor information services to capture and direct the potential audience for local events and attractions. Services include tours, maps, information packages and responding to inquiries. Looking forward, we can expect more events, larger festivals, more live performances, new retailers, new restaurants and even more patios - pointing to the inevitable outcome that Downtown Kitchener will some day soon reclaim its claim as the centre of the region's social life. Potential actions • Work with the Downtown Kitchener BIA to animate the core after 5pm • Promote major events to attract tourists and residents • Your ideas go here... Objective 5.2. Attract new retail businesses In 2010, the City of Kitchener began a formal program led by the Downtown Kitchener BIA to strengthen the retail sector downtown by attracting a mix of retail businesses. This process and strategy was supported by the Downtown Advisory Committee (DAC) and prioritized for future action. With a stronger retail offering, downtown can compete with other retail centres to draw people to the core. Potential actions • Work with local realtors and the BIA to recruit an appropriate mix of new urban retail and restaurant operators, with a focus on unique, independent and authentic urban businesses • Continue small business support program to ensure strong independent downtown retailers and restaurateurs • Continue Facade Grant program and evaluate the need for new programs that provide specific assistance to retailers downtown • Evaluate short-term parking availability for retail and service sector requirements • Continue to support the Landlord/Building Manager Group and evaluate the need for a proactive property standards inspection team • Your ideas go here... Objective 5.3. Build on success of the Kitchener Market The Kitchener Market is a proud tradition in the city, with a passionate following of thousands of committed consumers. Every Saturday for more than 130 years, meat and fish, fruits and DISCUSSION PAPER 33 2 - 38 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 vegetables, cheese, flowers and other local products have flowed into Kitchener's market building in anticipation of the thrifty and gourmet alike. Currently it operates every Saturday with over 80 vendors and over 10,000 visitors weekly and more attending the international Food Court during the week. With a recognized brand that is growing stronger, the Kitchener Market should be the first place people of Kitchener think about when they want to create a great meal with superb local produce. Through community consultation the following strategic objectives have been approved for 2011-2012: School Board, and others. But it is also a place for business, with a recognized profile as the central location for office space in the region. In the office market, one of the biggest trends in 2010 was the move of some high-tech tenants, including Google and Communitech, from Waterloo to Kitchener.4o Emphasizing Downtown Kitchener as a premium location for office space helps attract high-profile tenants which not only brings more employment to the core, but raises the profile of Downtown Kitchener as a cool place to locate. Potential actions • Increase business sustainability at the Kitchener Market by increasing the number of customers and vendors and increasing rates consistent with Farmers' Market Ontario recommendations • Continue vendor relations activities for upper and lower vendors through networking and collaborative policy development • Develop and implement an annual communications and marketing strategy to strengthen customer awareness, increase weekday traffic, and promote key events • Continue community partnerships in neighbourhood associations and key partners such as the Waterloo Region Tourism and Marketing Corporation to grow the culinary tourism programs for 2011-2012 • Continue marketplace improvements such as addressing the acoustics challenge in the space, fostering relationships with local chefs and attending consumer trade shows that focus on target audience. • Your ideas go here... Objective 5.4. Continue to be the head office for the region Downtown Kitchener is the home to many government and community services including its own municipal government, regional headquarters, the Waterloo Catholic District 34 • Encourage development of a variety of office spaces to meet business and institutional needs • Your ideas go here... Goal 6. Residential market is the hottest in the region From 2006 to 2031, the number ofurban-minded residents (students, young professionals, empty nesters and seniors) in Kitchener and Waterloo is expected to grow 81,000. This growth, and the development of rapid transit and the intercity rail hub at King Street and Victoria Street, will stimulate the most competitive market for condo and apartment units in the history of the region. To capture the majority of this growth, Downtown Kitchener needs to become the hottest location for new residential purchases by 2016. Objective 6.1. Engage developers In such a competitive marketplace, ordinary units won't suffice. The City will need to seek out the best builders, local and abroad, who want to build 40 Chuck Howitt, The Record. "Real estate market sizzling in region's commercial sectors", January 20, 2011. DISCUSSION PAPER 2 - 39 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM only the most stylish and most eco-chic units, offering top-notch amenities in well-planned buildings. The Kaufman Lofts and the City Centre Condominiums, with floor-to-ceiling windows, stylish layouts, contemporary finishes and sustainable features are the benchmarks moving forward . Kitchener offers the lifestyle sought by future residents • Develop a webpage promoting downtown living • Your ideas go here... Objective 6.3. Engage agents "I am very bullish on downtown Kitchener. When the opportunity came up, we jumped at it." Lee Piccoli, Fusion Homes, downtown land owner41 Potential Actions • Work with local developers who are building new prototypes for infill development • Meet with leading-edge development companies from across Canada to determine their potential interest in the Downtown Kitchener residential market • Your ideas go here... Objective 6.2. Engage consumers Delivering units and amenities tailored specifically to demographic groups is critical to actualizing sales. A contemporary, glass condo on King Street, next to all the action, may not appeal to the buyer looking for a more traditional brick building in a quieter neighbourhood, and vice versa. The Region's Reubanization Market Study 2010 offers an initial glimpse into the wants and needs of Downtown's future residents. Potential Actions • Use the findings of the Region's Reubanization Market Study 2010 to shape future initiatives, ensuring Downtown 41 Terry Pender, The Record. "Guelph developer buys block on King Street East", December 11, 2010. Real estate agents and brokers are among the most influential voices in encouraging or discouraging downtown as a place to live. Ensuring they are well informed of downtown's key assets and amenities will lead to purchasers making wise decisions about where in the region they want to call home. Potential Actions • Regularly present to the Kitchener-Waterloo Association of Realtors on the state of Downtown Kitchener • Your ideas go here... Objective 6.4. Use City-owned lands to facilitate new residential developments The City is ideally situated with 14 key strategic parcels of land ideal for redevelopment. Through the development of a disposition strategy, the City will assess which parcels are best suited for residential purposes. These parcels will provide leverage for not just attracting developers, but for ensuring any new residential buildings meet the demands of the future downtown consumer. Potential actions • Develop partnerships with leading builders to redevelop City-owned lands for residential development • Your ideas go here... DISCUSSION PAPER 35 2-40 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 Goal 7. Urban chic sweeps through downtown Awell-designed urban setting encourages people to meet, collaborate, build community and spark business innovation. Place and amenities matter in competing to attract and retain talent, as well as investors. "If you have really good public space then you can activate buildings." Jeff Lederer, University of Waterloo School of Architecture42 Objective 7.1. Continue to raise the bar Architecture and urban design is the foundation by which Downtown Kitchener's image is established. While the City has already facilitated many award-winning design projects, such as the internationally acclaimed King Street, and the widely talked about School of Pharmacy, more great buildings and spaces are ahead. Most notably, the Civic District will undergo a transformation as a new contemporary glass skin wraps the KPL, Otto Street is enhanced, and a new urban square rises above the new parking structure. Potential actions • Establish urban design guidelines for high-rise development • Continue to implement the Civic District vision • Work with the region to create an award- winning multi-modal hub that connects Waterloo Region to Guelph, Brampton, Pearson Airport and Union Station by rail. • Your ideas go here... az Terry Pender, The Record. "Well-designed urban landscapes prevent crime, candidates tell Waterloo Region prevention council", October 8, 2010. 36 DISCUSSION PAPER 2-41 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM STRATEGIC THEME: AN The first two strategic themes provide direction for the future of the Kitchener economy. But to realize the related goals, we must continue to innovate in how we work. Kitchener's creative approach to economic NVENTIVE APPROACH We also work to achieve our objectives in a way that honours our corporate priorities with respect to the environment. In economic development, we have the opportunity to promote and implement sustainable development in much of our work, from the intensification of industrial and development has brought the city many successful developments, especially downtown. These projects were made possible in large part by the one-of-a-kind Economic Development Investment Fund. While the funding model is unique, even the individual projects made possible by EDIF are distinct. For example, the City's loan to a private land owner to facilitate the development of industrial lands on Shirley Avenue resulted in early repayment of the loan, with interest, and the addition of industrial employment lands that generate greater tax revenue for the City. This was a far more efficient approach to land development that allowed staff to focus on our core competencies while leaving land development to the private sector. As well, the launch of the Manufacturing Innovation Network (MIN) was a new approach to connecting a business community. And many of the City's incentive programs have been carefully constructed to offer much more effective solutions by, for example, changing the fapade improvement program to allow tenants, and not just owners, to access grants. Within the corporation, staff are working to implement effective tools to facilitate their work, from the replacement of the old labour-intensive Business Directory, to a new and more cost- effective online model. As well, staff are connecting across the corporation, informally and formally in forums like the Downtown Interdepartmental Resource Group (DIRG). DISCUSSION PAPER commercial land to protect greenfields, to the remediation of former industrial sites for a myriad of possible uses. The reconstruction of King Street was another example of the incorporation of sustainable development into a project that contributed to the aesthetic of downtown. King Street has been recognized as a "green street' by Tree Canada for its contribution to, and leadership in, creating an environmentally sustainable street design. Features include 120 new street trees, bike racks to encourage cycling, environmentally-friendly planter beds that collect and filter storm water, the use of recycled materials, and improved waste management practices. Through these methods, we attempt to leverage our resources to achieve a far greater economic impact that conventional methods would offer. But we also achieve our goals in a socially- responsible and environmentally sustainable manner. In this way, we work to achieve our corporate mission "proudly providing valued services". Goal 8. New developments create a clean, attractive environment The first two themes focus on much of the work that is done to improve the business climate for investment; however the physical environment and community infrastructure are still an important part of investment decisions. Decision makers are influenced by the quality of the community: infrastructure, schools, 37 2-42 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 neighbourhoods, commercial development, streets, parks and natural amenities, arts and culture, downtowns, and the visual appeal of the environment. Objective 8.1. Support a high quality urban environment Kitchener has already redesigned and constructed the streetscape on King Street to create a contemporary street with the flexibility to support events, parking and the movement of pedestrians. Continuing this work supports other strategic objectives in particular with respect to support for the downtown aesthetic and to overcome negative perceptions of downtown. Potential actions • Increase priority of gateway design and signage at entrance to the city and downtown • Maximize support for cultural attractions and facilities • Support continuing implementation of urban design standards for private development in support of the Kitchener brand • Ensure that high quality urban design is a core objective in the redevelopment of city-owned real estate • Continue using City facilities and infrastructure as examples of sustainable design • Support Parks Master Plan (e.g., trail initiatives) • Support transportation initiatives such as rapid transit and Transportation Demand Management (TDM) to promote shift away from single occupant vehicles. (e.g., cycling, pedestrian-friendly spaces) • Your ideas go here Objective 8.3. Protect and maximize renewable resources Three factors intersect to drive Kitchener's need to renew some of its current urban lands: Kitchener's industrial and commercial past; Kitchener's dependence upon ground water for the community's drinking water supply; and Kitchener's plan to accommodate future growth within current areas through urban re-vitalization. "We are growing up in the sense that we are realizing that we cannot just keep using good pieces of land. So most builders as well as potential buyers are seeing the benefits of the condos." Adrian Baas, Broker43 • Your ideas go here.. . Objective 8.2. Promote sustainable development Through sustainable development, the City demonstrates its commitment to a healthy environment. Support for alternative modes of transportation, parks, and trails, helps the city to attract talent and encourages residents to engage in a healthy lifestyle. Potential actions • Encourage LEED certification on major development projects, including exploring the use of financial incentives 38 With growth and intensification, staff must identify underutilized space so that redevelopment opportunities are maximized. The land renewal process has transformed numerous vacant, non- tax paying assets into productive developments. This is especially complex in the redevelopment of Brownfields (contaminated lands), but through a revised regional Brownfield financial incentive program, major initiatives such as the Lang Tannery have been made possible. In total 52 contaminated sites have been remediated since 2005 with more than $100 million in private sector as Rose Simone, The Record. "Condo sales boom in Waterloo Region", November 2, 2010. DISCUSSION PAPER 2-43 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM investment through Brownfield Financial Incentives. Goal 9. Tools enhance our effectiveness The community collectively benefits through efficient economic and residential growth, reduced pressure to convert farmland to urban subdivisions, increased tax revenue and a more livable city. "The majority of work now is going to be intensification, the conversion, the adaptive re- use, the retrofitting of older buildings, the brownfields." Paul Puopolo, Planner-in-Residence, UVV'4 Proposed actions: • Manage, with the Region and municipal partners, to develop and deliver a comprehensive set of financial and human resource incentives to assist the private sector in their efforts to clean up contaminated lands • Manage the disposition, renewal and redevelopment of surplus City-owned lands for more economically productive private sector uses • Seek out and identify reurbanization opportunities within the city and market to the local, Canadian and international investment communities • Actively seek out strategies for the creation of more employment lands within currently industrial areas of the city, by working with existing industrial plant owners and the real estate community • Your ideas go here... as Terry Pender, The Record. "Kitchener planner takes up residence at UVV', December 29, 2010. DISCUSSION PAPER Developing a tool kit of research and resources enables staff to work more effectively to advance the other strategic themes. Solutions have ranged from simple, such as primary research in the downtown, to the complex, like the adoption of the Economic Development Investment Fund. In this way, we demonstrate that regardless of scale, we will work to achieve our objectives in innovative and efficient ways. Objective 9.1. Continue focused research and analysis Research and information resources are necessary to implement these potential actions and allow the city to respond effectively to changes in the global, national and regional economies. For example, to assist companies in finding a location, a real estate directory is an essential tool. To promote this area as a location for investment or business, certain metrics and statistics are required to support a case for Kitchener. Through other programs like corporate visitation staff connect with local businesses in support of retention, to offer resources and information, gather business intelligence, and build a relationship with business leaders. In particular, it is important to understand the factors that attract talent. The City must monitor the evolution of its "brand" in the minds of young knowledge workers in order to fine tune its approach to city building, vitality programming and communications over time. Further study is under way to look at ways to attract talent including cultural activities, community diversity, access to education, affordable high quality of life in a green, sustainable environment. These needs will be further confirmed with updated surveys of talent needs. Finally, research and local economic monitoring provides the necessary intelligence to inform the work of staff, which will ensure that this strategy 39 2-44 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 continues to be relevant. It aids in the observation of new clusters of business activity, or in the identification of areas that are at risk. Potential actions • Re-establish regional business database tools • Complete real estate tool in partnership with CTT and the Kitchener-Waterloo Association of Realtors • Continue to implement the Corporate Visitation Program in partnership with Cambridge and Waterloo, to support later business cycle innovation (e.g., provide information about financial support, provincial and federal tax incentives and programs) • Continue research partnerships with CTT, the University of Waterloo and Wilfrid Laurier University • Build inventory of cluster-specific research. • Review primary research of talent including graduates, senior students and employees and partner with key stakeholders to fill gaps in knowledge. • Conduct a biannual downtown employee and/or resident survey. • Your ideas go here... doing business, possible partnerships and lifestyle). As well, communication tools need to be incorporated into the plan to help us nurture and/or develop relationships with clusters and their decision makers. Objective 9.3. Review downtown incentives For many years, developers in the Waterloo Region ignored the downtown and focused exclusively on suburban opportunities. This has begun to change, although developers working in the downtown remain one step ahead of the market. The bulk of real estate projects remain on the periphery of the city. However, today multiple unit developments constitute a larger share of residential building permits and the downtown is a source of a very significant value with respect to Kitchener's building permits. The scale of the current transformation of Downtown Kitchener was described earlier in this discussion paper. A key feature of the process underway has been a dramatic shift in private sector confidence in the urban land market. Objective 9.2. Build marketing plan and develop brand collateral To implement this strategy, a marketing plan will build upon the above analytical work. This plan will identify key messages, audiences, and obstacles as well as propose toolkits and timelines to use to communicate directly to the target clusters and other key decision makers. The emphasis of the marketing collateral will be on focused, customized materials that meet very specific needs. Learning from past successes, these toolkits should incorporate modular marketing material that can be quickly and cost effectively customized to speak to the interests and concerns of each target (e.g., talent pool availability and retention, comparison costs of 40 The shift has been supported by a portfolio of key incentives including the Brownfield Program, the Downtown Development Charge Exemption, the Building Permit and Planning Fee Rebates, the Fagade Program and the Upper Story Residential Program. A comprehensive review of these programs is currently underway. It will provide an assessment of the current programs and make recommendations on potential changes which could be implemented in the one to four year time frame. Potential actions • Complete a review and bring suggested changes to the Downtown Community Improvement Plan Incentives to Council • Your ideas go here... DISCUSSION PAPER 2-45 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM Objective 9.4. Develop comprehensive real estate portfolio strategy The City of Kitchener owns a portfolio of strategic land parcels located throughout the city. They fall into two categories: vacant employment lands located in South Kitchener and parcels in the downtown currently used primarily for surface parking. Each property presents its own redevelopment opportunity relative to its geographical and market context, and can be a potential catalyst to advance the economic development objectives of the City of Kitchener. Collectively these properties represent an asset base that, developed intentionally, will allow the City of Kitchener to continue the transformative process currently underway in the urban economy. This portfolio has the potential to satisfy a wide range of public policies and objectives including, but not limited to, stimulating investment in emerging knowledge-intensive industries, residential intensification, high quality urban design, sustainable design (LEED) and economic return. The intent of the strategy is to ensure a coordinated approach to the redevelopment of each parcel over a five to 10 year timeframe. The redevelopment scenario for each parcel must leverage significant private sector or partner investment. It must optimize sales value and long-term tax revenue as well as reinforcing the City's urban design and environmental objectives. The city's disposition strategy should also optimize the staging process by monitoring market conditions and competition. Potential process involve the development of individualized documents for each site defining the strategic opportunities, highest and best use, constraints and limitations, compatibility with surrounding land uses, design considerations as well as compliance to municipal policy objectives. A design charrette will inform the design guidelines for each of the downtown properties in the portfolio. The ultimate sale and redevelopment of the City lands will be executed using the Request for Proposal method. This disposition method gives the City extensive control over property development ensuring City goals are met. Objectives can be outlined in advance, and the City would have the right to refuse/approve any particular development. The public could be engaged in the decision process as deemed appropriate by Council. In addition to policy objectives, the City has a responsibility to its tax payers to utilize its assets to further the economic health of the City. As such, new developments should consider maximizing the sale value of lands and maximizing long-term property assessment. At the same time, the City will need to ensure redevelopment opportunities are financially feasible for the development industry to execute. Potential actions • Finalize Urban Land Development Strategy • Establish Land Portfolio Advisory Committee • Initiate Staged Development Process for the City of Kitchener's land portfolio • Your ideas go here... A Council-appointed advisory committee composed of development professionals in the fields of real estate finance, planning and urban design, architecture as well as senior City staff in Economic Development, Planning, Finance and the City Solicitor will be established to develop Terms of Reference for each property, evaluate development proposals and advise Council in the disposition of each parcel. This process will DISCUSSION PAPER Objective 9.5. Continue investment in catalytic projects The City of Kitchener has benefited significantly from the Economic Development Investment Fund. Investments made possible by that fund stimulated a fundamental shift in investor and consumer confidence in Kitchener's downtown. 41 2-46 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 The ability of the City of Kitchener to make an initial investment has allowed partner agencies to attract private sector and further public sector funding to ambitious initiatives. Projects funded by EDIF ranged from the $30,000,000 grant to the University of Waterloo for the School of Pharmacy and the $500,000 grant to Communitech to build The Hub, to a $100,000 loan/grant investments in new upper- story residential units in the downtown. The founding grant to Communitech allowed that organization to attract an additional $49 million in cash and in-kind investment from the private sector, and Provincial and Federal Governments - a ratio of 1:100. This indicates that City of Kitchener does not have to be majority funder to facilitate a transformative investment. But, it does have to have some funding to act as a point of leverage to attract additional investment from other sources. "Does anybody believe Google would be in downtown Kitchener today without the economic development investment fund?" Andrew Hilliard45 Now that EDIF is fully allocated, it is appropriate to consider the need for a subsequent mechanism to support catalytic economic development projects, including other sources of financing and evaluating the potential of establishing a successor fund to finance apost- EDIFeconomic development strategy for 2014- 2020. Potential actions • Conduct a review of the need for a successor fund to EDIF for Council consideration • Your ideas go here... as http://www.therecord.com/opinion/article/301004--invest-in- li hg t-rail 42 DISCUSSION PAPER 2-47 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM CONCLUSION The 2007-2010 Economic Development Strategy and the Economic Development Investment Fund created considerable momentum. Now, we have the opportunity to build on the many opportunities that will continue to emerge from the early stages of development on these catalytic projects. The 2011-2015 Economic Development Strategy will reflect the same values and principles as the prior strategy, but with an updated set of goals and objectives to reflect emerging opportunities and changing circumstances. As well, it better reflects the corporate priorities identified under the City of Kitchener's Strategic Plan. Strategic alignment The Economic Development Strategy builds upon the City of Kitchener's Strategic Plan to reinforce the City's commitment to growth and prosperity. The corporate strategic plan identifies six priorities: leadership and engagement, quality of life, diversity, downtown, development, and the environment. The principles in this discussion paper are consistent with corporate priorities: Downtown: We implement the roadmap from the Downtown Strategic Plan, encouraging core vitality through arts, culture and events support, and offering solutions to adjust perceptions of the downtown. Development: We promote acluster- development approach, and address urban vitality, and employment lands. This is also consistent with other development programs including Kitchener's Growth Management Strategy, and the Province's Places to Grow. Environment: We support Transportation Demand Management, environmental remediation and corporate leadership in sustainable development. This strategic approach is consistent with the current economic climate, and with corporate priorities. As well, the direction for a strategy developed within the context of the current Kitchener Community Vision: Together, we will build an innovative, caring and vibrant Kitchener with safe and thriving neighbourhoods. Leadership and engagement: The discussion paper was developed through stakeholder consultation and will be further refined through additional engagement. But also, embedded in the document and the mission statement is the idea of stakeholder collaboration to achieve our goals. Quality of life: We emphasize in our vision the importance of a livable community, and lifestyle including culture, safety and community spaces. Diversity: We support an open and inclusive community that is attractive to talent and recognizes the capacity of diverse members of the community to contribute to our economy. But more than that, this discussion paper outlines the "how" to our corporate plan's "what" and "why". Economic development is how we are going to achieve many of our social and environmental goals. And, it's the way we are going to build the economy we need to support high quality public services and a high quality of life. DISCUSSION PAPER 43 2-48 2-49 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM I APPENDIX A. DISCUSSION PAPER FAQ Why prepare the economic development strategy? Staff strive to create an environment for economic success in the community. Though the economic development strategy will have along-term view, it will provide a direction, focus, and framework for decision making for economic development activities over the next four years. It also informs our work plan and resource allocation for 2011-2015. Why prepare the discussion paper? This discussion paper is intended to frame the conversation for the consultation process that will assist in the composition of the final strategy. It provides background material and proposes a structure for a strategy, which allows for input from stakeholders into both the framework and the ideas for action. Who prepared this discussion paper? The writing of this discussion paper is a collaborative effort of the entire Economic Development staff team, under the leadership of the Executive Director of Economic Development. Staff also arranged for stakeholder sessions starting in 2010 and continuing through 2011 as a foundation for this discussion paper. How was this discussion paper prepared? The methodology followed so far includes: a review of previously completed studies and all relevant documents; data and statistical analysis including labour force analysis, a review of economic reports and forecasts including a review of leading experts, and multiple Kitchener advisory committee and stakeholder consultations. How does the strategy become a reality? The City of Kitchener will collaborate with key community stakeholders to set priorities to implement the strategy. It is expected that some of the action plans are implemented directly by staff, while other actions require facilitation to engage other agencies and stakeholders in the fulfillment of the strategy. Who will benefit? Everyone who lives and works in the city of Kitchener and Waterloo Region will benefit from the strategy. How does the community contribute to the strategy? Stakeholder engagement includes sessions with the Economic Development Advisory Committee (EDAC), the Downtown Advisory Community (DAC) and a full staff review in Economic Development. The type of stakeholder input to date includes an analysis of economic context, challenges and opportunities to carry forward momentum. Future input will include online surveys and a symposium on the economy of Kitchener, scheduled for May 2011. DISCUSSION PAPER 2 - 50 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 I APPENDIX B. LIST OF STAKEHOLDERS There are numerous partners and stakeholders who play a role in strategy implementation. Some of the key partners are listed below. Canada's Technology Triangle (CTT) www.techtriangle.com A public-private regional economic development partnership that markets Waterloo Region to the world, and works to attract new businesses, investment and talent to the region. Communitech www.communitech.ca A membership-based organization that supports regional technology companies and promotes the area as a technology cluster. Creative Enterprise Enabling Organization (CEEO) www.creativeenterorise.ca The newly launched organization derived from the work of the Prosperity Council (see below) to drive investment through arts and culture. Downtown Kitchener Business Improvement Area (BIA) www.kitchenerdowntown.com A membership-based organization to promote downtown Kitchener in support of the business community. Federal Economic Development Agency for Southern Ontario (FedDev Ontario) www.feddevontario.gc.ca A provincial agency to facilitate economic development for southern Ontario. Foreign Affairs and International Trade Canada (DFAIT) www.international.gc.ca A federal agency that works to promote economic opportunities and trade. Greater KW Chamber of Commerce www.greaterkwcha mber.com A membership-based business association that acts as an advocate for development and the business community. Kitchener-Waterloo Association of Realtors (KWAR) www. kwar. ca A membership-based organization representing the real estate community. Manufacturing Innovation Network (MIN) www.waterloomin.com An online community to connect the manufacturing community to facilitate awareness, make connections, encourage trade and facilitate employment. DISCUSSION PAPER 2-51 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM Ministry of Economic Development and Trade (MEDT) www.ontario.ca/economy A provincial agency responsible for economic growth. Prosperity Council www. prosperitywaterloo.com A committee providing thought leadership in region-wide prosperity. Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) www.omafra.gov.on.ca A provincial agency that supports agriculture and food, especially in rural communities. Region of Waterloo www.region.waterloo.on.ca The regional government agency responsible for public health and social services, waste and water services, and complimentary work in transportation and community planning. Waterloo Region Immigrant Employment Network (WRIEN) www.wrien.com A collaborative of employers, agencies, governments, educators and foreign-trained professionals working together to support both employers and new Canadians to improve employment opportunities and capitalize on the advantages of immigration for the workforce. Waterloo Region Small Business Centre (WRSBC) www.waterloorepionsmallbusiness.com A regional agency to support entrepreneurship through services including training, access to resources and consultations. Waterloo Region Tourism and Marketing Corporation (WRTMC) www.explorewaterlooregion.com A regional agency charged with promoting the region as a location for tourism. DISCUSSION PAPER 2 - 52 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 APPENDIX C. RESULTS FROM 2007-2010 ECONOMIC DEVELOPMENT STRATEGY The following section is a condensed summary of action items listed in the 2007-2010 Economic Development Strategy. For the complete wording of each action, please refer to the complete strategy. 1) To diversify the urban economy, the City will: 1.1) respond to opportunities for new education facilities and knowledge infrastructure; / The City of Kitchener has continued to facilitate discussions with WLU, UW and Conestoga College on new opportunities to develop educational infrastructure in the downtown. / The City of Kitchener has supported the implementation of the Conestoga College Cambridge Campus. 1.2.1) work in partnership to facilitate the growth of the health sciences cluster; 1.2.2) design and develop a business solution for a health sciences incubator in downtown Kitchener; / With CTT, co-financed and implemented a market survey and business case for a life sciences incubator facility / Staff researched Health Science Tech Parks in the US 1.2.3) support the commercialization of the intellectual property (IP) generated by the health sciences cluster; / Established a Life Sciences Peer2Peer group now being coordinated by Communitech 1.2.4) work in partnership to explore a life sciences investment attraction strategy; / With CTT attended 810 2006, 2007, 2008 and AURP 2009 to build linkages into the North American life sciences business community. 1.3.1) continue to develop a Digital Media Cluster Strategy and action plan for growth; / With Communitech, facilitated the conceptualization of the Communitech Hub. Co-financed the implementation of the Hub. 1.3.2) work in partnership to explore ways to raise Kitchener's profile in the digital media industry; / Have worked closely with Communitech to optimize branding opportunities associated with the Hub. Met with digital media companies in the city on a regular basis to encourage their identification with the city and the cluster. / Installation of the CUBE as an iconic landmark medium for public art displays 1.3.3) design and develop a business solution for a digital media incubator/laboratory; and, / Co-financed the development of the Communitech Hub. 1.4.1) support the growth and enhancement of emerging clusters. / Initial research into green-tech; corporate visitation in the Finance and Insurance sector,' support for super Courthouse as catalyst for the legal community IV DISCUSSION PAPER 2 - 53 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM 2) To support manufacturing competitiveness, the City will: 2.1.1) continue to conduct an annual corporate visitation program; / Corporate Visitation in 2006 and 2007 were focused on manufacturing. The result of the 2008 visitation was the Manufacturing Innovation Network 2.2.1) continue partnering with the private sector, where appropriate, to develop new employment lands; / Worked with South Kitchener Holdings to facilitate the conversion of the 100 acre BF Goodrich site into a new industrial business park. / Have planned the development of the 37 acre former Maple Leaf lands on Strasburg Rd. / Support the implementation of the Airport Lands as a major new employment lands area for Waterloo Region. 2.2.2) broaden the scope of EDIF's employment land allocation; / EDIF now can accommodate investments in urban employment lands. 2.3.1) facilitate multi-stakeholder discussions on: / attracting research and development in the region's manufacturing sector; / enhancing the relationship between post-secondary institutions and manufacturers; / amulti-stakeholder manufacturing research centre and technology accelerator, / work in partnership to establish a mass collaboration network; / participation in the Region's Manufacturing Taskforce. / implementation of MIN as amulti-stakeholder project to encourage collaboration in process and product innovation. 2.5.1) work in partnership to support the development, retention and recruitment of talented workers needed by the city's manufacturing industry; and, / MIN Job Board now the definitive employment resource in the region's manufacturing industry 2.6.1) continue dialogue on the need for a Manufacturing Task Force to build and garner public support for a regional manufacturing agenda. 3) To attract, retain and develop talent, the City will 3.1.1) continue to support co-location of new post-secondary education institutions in Kitchener; / See 1.1 above. 3.2.1) continue to support the talent recruitment work of external agencies; / Continued funding and in-kind support to Communitech for Waterlootechjobs.com, WREN, and WWTAB. 3.2.2) strengthen its communication tools to appeal to the knowledge workers within the community and from outside of the area; / A variety of communications tools have been developed including the City's social media strategy, a video on urban design in Waterloo Region, new websites for the City of Kitchener and the Kitchener Market. 3.2.3) continue to work to understand the factors that attract young talent; DISCUSSION PAPER V 2 - 54 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 / A comprehensive research review was conducted of talent demographics and urban lifestyle preferences including a retail attraction strategy that targets the young tech worker cohort. 3.3.1) implement an Urban Vitality Strategy & Action Plan; / In 2009 and 2010, the City of Kitchener reconstructed King Street as a pedestrian environment ideal for out door patios and cafe's. As part of that project, the City installed a digital media projection system on City Hall to help animate the street as a unique gallery for digital art. The City also worked with the BIA to establish Downtown Live - a entertainment program for multiple stages on King on Thursdays and Fridays. In addition, the Special Events program hosts 80 events in the downtown annually that draw an audience of more than 400, 000 people. The City also revamped the patio program which resulted in 6 new patios this summer and BIA provided support through providing flower pots for the patios 3.4.1) continuously seek partnerships to align business needs with training and educational services; / In 2007, the Small Business Centre established two training workshops focused primarily on downtown businesses: the downtown retail workshop aims to improve the ability of urban retailers to achieve success. The small business workshop for the arts helps artists develop viable business practices that position them to succeed. 3.5.1) continue to strengthen its role in arts and culture by: • exploring the development of amulti-tenant arts incubator Downtown; / A study on this topic was completed by Artscape in 2006. Applications for funding of such a centre were considered for submission to the 2009 Federal stimulus programs. However, it was determined that further work was required to address financial and organizational questions around the project. • exploring opportunities attract strategic catalytic projects; / In 2008, the failure of the King Street Theatre created the opportunity to attract the Kitchener Waterloo Symphony to the downtown. The KWS has diversified and strengthened the cultural fabric of the downtown. / The Civic District Master Plan has positioned that area of the City as a potential home to strategic investments in the Arts. Two additional building sites for such investments have been identified by the design of the underground parking structure currently under development in conjunction with the Central Library. • promoting arts and cultural event programming; / The City of Kitchener currently hosts over 80 major events in the downtown on an annual basis. A new Special Events strategy is under development. • projecting Kitchener's identity as a creativity community on the world stage; / In 2010, the City of Kitchener and its cultural partners hosted Magnetic North -Canada's premier itinerant theatre festival. • reviewing of the City's Cultural Funding Mechanisms; / In 2009. Council adopted a new Community Investment Strategy with a view to leveraging the City's investments in the not-for-profit sector including the arts. In addition, in 2010 with its partners -the Community Foundation and the Musagettes Foundation the City facilitated the investment of an additional $800, 000 of one-time funding in key arts organizations. • working with stakeholders on the implementation of Culture Plan II; and, / City staff work closely with stakeholders in the arts and particularly with the Arts and Culture Advisory Committee to implement key recommendations of Culture Plan Il. VI DISCUSSION PAPER 2 - 55 ECONOMIC DEVELOPMENT STRATEGY 2011-2015: BUILDING ON MOMENTUM supporting the development of a new plan for the Civic District; and, / A master plan for the Civic District was completed in 2008. The current plans for renovation of the Kitchener Public Library and the construction of an underground parking garage in the District reflect the principles articulated in this plan. 3.6.1) continue to strengthen its role in urban design by: implementing recently approved design policies and guidelines; / In 2006, Council adopted new urban design guidelines. Implementation of these guidelines has been central in the design of key projects such as City Centre Condominiums and the Tannery. High quality urban design has become a criterion in the sale of City of Kitchener land assets such as the Elmsdale Yards. In 2009, the City, with its partners at CTT, the Region of Waterloo, the City of Waterloo and the City of Cambridge produced a video celebrating high quality urban design in the Waterloo Region. • exploring changes to the City's zoning bylaw to implement design objectives; and, / Discussions are underway with the Planning Division regarding opportunities presented by the Official Plan Review to reinforce urban design objectives. exploring new tools and legislative authorities of the Planning Act. / See above. 4) To build a dynamic downtown, the City will: 4.1.1) review and update the Downtown Strategic Plan; / In 2010 Council endorsed 20 actions under four themes which build off the success of Vol. 3; staff will develop a new strategy in 2011 4.2.1) explore expanding the fagade loan and grant programs; / In 2009, Council adopted an expanded fagade incentive program. This change resulted in a significant increase in the projects implemented in both 2009 and 2010. There have been nine projects completed to date; two currently underway; four more anticipated to start by the end of the year,' and four others approved, but no timeline for commencement 4.2.2) work in partnership to develop a business attraction and marketing program to attract key retail and services to support the downtown's growing residential and employment population; / In 2009 and 2010, the City of Kitchener worked with the Downtown Kitchener Business Improvement Area to develop a retail attraction strategy for the downtown. This plan is currently being implemented. 4.2.3) through increased funding, implement a King Street Streetscape Master Plan in 2008 - 2009; / The KSMP has been implemented. Construction was completed in 2010. 4.2.4) in partnership with the KDBA [now known as the Downtown Kitchener BIA] and other downtown stakeholders, will support the consistent operation and maintenance of an attractive improved streetscape in both the public and private realms. / Discussions are underway with the Downtown Kitchener Business Improvement Area and City of Kitchener Operations Division to develop a new maintenance standard for the downtown. 4.3.1) develop an urban vitality program during construction phases of King Street; and, DISCUSSION PAPER VII 2 - 56 BUILDING ON MOMENTUM: ECONOMIC DEVELOPMENT STRATEGY 2011-2015 / Together with the Downtown Kitchener Business Improvement Area (B/A), the City has implemented Downtown Live, an entertainment program designed to get people out of their offices at lunch and capture their attention from 4-6 p.m. on Thursdays and Fridays with over 100 performances throughout the summer of 2010 4.4.1) initiate a plan to systematically attract private sector redevelopment of the City's strategic downtown properties and surface parking lots. / This plan is currently under development. EDAC and Corporate Management Team were consulted in early 2010. 5) To put contaminated lands back to work, the City will: 5.1.1) continue to seek out new investment of urban redevelopment lands; / The City of Kitchener has attended the National Brownfield Conference every year. Investments in target Brownfields include the Lang Tannery, and the former Collins and Aikman factory. 5.1.2) continue to work with other levels of government to bring more resources to play in Brownfield renewal; and, / The City of Kitchener worked with the Region of Waterloo to develop aregion-wide Brownfield program modeled on that of the City of Kitchener. This program dramatically increases funding available for remediation by including the Regional component of municipal property taxes. 5.1.3) continue to market its financial incentives (EDGE). / The City of Kitchener financial incentives are included in all the City's efforts to promote investment. 6) To grow small businesses, the Small Business Centre will: 6.1.1) continue to develop new programs that will focus on sector specific needs; / SBC reports growth in youth and newcomers establishing small businesses, online businesses and social media marketing. 6.1.2) continue to develop a "Business Training for Artists" program; / This event provided artists with basic business information and access to experts for three years. 6.1.3) work in partnership to continue to deliver a seminar series for independent urban retailers; and, / This event continues to provide industry-specific marketing, human resource and online strategies for highly competitive markets. 6.1.4) work in partnership to developed programs aimed at new Canadians who want to start and run a small business. / Assistance was provided in partnership with other business organizations including business planning and access to financing. VIII DISCUSSION PAPER 2 - 57