Issaquah staff review economic-development dashboard; council hears concerns about limited retail space and rising office vacancy

Issaquah Economic Development Manager Jen Davis Hayes told the City Council Services, Safety and Parks Committee on April 29 that the city is expanding the data it gathers to guide business outreach and policy, but councilmembers and commissioners warned that constrained retail space and recent large office vacancies pose near-term challenges.

Davis Hayes said the city maintains about 28 economic-development data points ranging from retail sales and vacancy rates to lodging taxes, and that the information is intended to give businesses a quick snapshot of Issaquah’s market. “Our economic dashboard is really intended to showcase Issaquah’s climate,” she said, describing tools designed for business recruitment, performance tracking for the city’s economic-development action plan and regular reporting to the Lodging Tax Advisory Committee.

Why it matters: Councilmembers said the vacancy and space data should guide land-use and incentive discussions. They also pressed staff on how the city will use the performance dashboard to turn red or yellow indicators into policy or administrative responses.

Most important facts

- Data and tools: Davis Hayes described three main uses for the city’s metrics — a public-facing economic dashboard for businesses, performance metrics tied to the city’s recently adopted Economic Development Action Plan, and recurring reports (including sales and lodging tax figures) used internally and with advisory bodies. She also said a customer-relationship management (CRM) system imported in fall 2024 will let staff track services to businesses, and that an economic development coordinator will begin in May.

- Vacancy and large tenants: Davis Hayes said two large office buildings vacated by a major tenant earlier in 2023 account for about 12% of Issaquah’s office market and roughly 75% of the city’s current office vacancy. She told the committee the buildings’ owners are actively marketing and that one large prospective tenant was negotiating lease terms.

- Retail and industrial/flex: Council members and the Economic Vitality Commission (EVC) noted retail and industrial/flex vacancy rates under 2 percent, which they described as evidence that the city may be running short on leasable commercial space. “We have to build more retail,” Councilmember Ray said, adding that new residential development has often come without corresponding retail space. EVC members urged closer coordination with planning to preserve commercial floorspace in future redevelopment.

- Business survey and trends: The city’s business survey (a repeating instrument the city has used since 2012) shows about 63 percent of respondents reported sales as stable or increased over the prior three years; 16 percent reported no observable trend. Top issues named in the latest survey included finding appropriate space, lack of advertising and persistent concerns about affordable housing and workforce availability.

- Live-work share and jobs: Davis Hayes reported a rise in the share of Issaquah residents who both live and work in the city — from roughly 30 percent in 2022 to about 50 percent in 2023 — a shift she said may reflect increased hybrid work and local hiring. She also said final 2024 employment numbers from the Employment Security Department were not yet available.

- Workforce efforts: Davis Hayes highlighted regional workforce efforts and a Sound Jobs program that is providing roughly $20,000 in services to support retention in the hospitality sector; she said the city coordinates with regional partners because it has limited resources to change larger labor-market trends.

Council and commission feedback

Councilmembers pressed for more granular vacancy data (by size and type of retail space) and suggested staff return with recommendations next year on whether to incentivize or require commercial space in redevelopment. Councilmember Marks asked whether the performance dashboard will expose “red” indicators and, if so, what administrative steps follow — a question Davis Hayes said staff are working to automate once updated source data arrive.

Economic Vitality Commission Chair Chris Richley and commissioners Jake McGill and Jennifer Larson attended and spoke in support of staff work. Richley asked council to route policy updates to the commission for review and said the commission is looking for clearer opportunities to support business recruitment and retention.

Implementation steps and limits

Davis Hayes said the city will continue business-retention and outreach visits, pilot pop-up uses in vacant spaces, and refine web-based market materials; she said staff expect to bring recommendations to council next year but provided no formal motion or vote. Several councilmembers emphasized that actions such as changing land-use requirements or offering incentives would be higher-level policy choices for council rather than immediate administrative changes.

Ending

The committee took no formal action on the presentation. Members encouraged staff to publish clearer dashboard timelines and to produce vacancy breakdowns by space size and type to inform planning and policy discussions.