Local Business

Fullerton Economic Development Takes First Steps

Due to a projected revenue shortfall as early as the 2024/25 budget year, Kosmont Companies was commissioned to provide a citywide retail market study which was presented to the City Council and the public at the June 20th Council meeting. It is important to recognize that this study addresses only the City’s retail market and does not consider other economic development opportunities. Kosmont used a SWOT (strengths, weaknesses, opportunities, and threats) model to present current conditions and recommend possible actions.

The study shows a total population of 144,381 with a median age of 36 and a much smaller percentage of those ages 14 and under at around 17%. These figures are comparable to Orange County and statewide figures generally. Fullerton has a diverse and well-educated population, with 46.6% having a Bachelor’s degree or better and fewer than 10% without a high school diploma. This is not surprising given the current and historical focus on local education, the presence of Cal State University Fullerton, Fullerton Community College, and excellent schools throughout the City. Cal State University Fullerton attracts over 40,000 students annually, while an extensive healthcare industry adds to the live/ work appeal of the City. Education and healthcare industries account for the bulk of the 59,000 local jobs.

Fullerton is home to Orange County’s largest transportation center, with OCTA bus, Amtrak, and Metrolink serving over 3,000 people daily, providing convenient travel to and out of the City for business or pleasure.
A breakdown of City revenues shows a higher-than-average dependence on property and retail sales tax to support the City’s General Fund. Fullerton’s property taxes provide 56.2% vs. 40.5 % and 28.0% vs. 22% in sales tax compared to other California cities. Other California cities generate TOT (hotel tax) better, averaging 8%, while Fullerton lags closer to 4%. Bounded by four major state highways, Fullerton is well-placed to draw local and regional shoppers to the eight major retail centers in town.

Kosmont noted that much of Fullerton’s retail space is older, having been built in the ’60s and ’70s. The exceptions are Fullerton Crossings and Amerige Heights Town Center. While vacant retail space is at a healthy low of 3.8%, the north end of town has significant vacant space and too high a reliance on numerous large box stores. The empty retail space and a large parcel of undeveloped land (500 acres) may provide an opportunity to introduce new services at the north end.
Measure W prohibits development in West Coyote Hills, and Sunrise Village is converting from retail to residential uses reducing available retail square footage.

E-Commerce continues to impact traditional store-front retail and is a trend we can expect to continue. Inflation and Covid have impacted all retail but downtown has shown a strong rebound with returning customers and new tenants. Kosmont presented various action items for the Council to consider in guiding staff efforts and resources to maximize retail revenues. Recommendations include improvements to signage, more inviting walking and gathering spaces, and creating databases to track the dynamics of an ever-changing retail environment while nurturing existing retail-owner and City relationships. These efforts will help retain and promote new business ventures.

Following staff and consultant presentations and public input, the Council provided general direction to staff for
the next steps. No formal action or vote was taken on this item.

1 reply »

  1. Economic Development is code for increasing revenue to pay for employee pay, pensions and benefits. But the money wasted “studying” it is so ironic that it almost makes it worthwhile.