Campbell economic-development manager urges streamlining, protection for industrial land

At a March 10 study session, Nathan Donado, Campbell’s economic development manager, gave planners an extended briefing on the city’s economy and recommended policy ideas aimed at retaining major taxpayers and making it easier for small businesses to open.

Donado framed three central aims for city economic policy: stabilize and broaden the tax base, support jobs, and preserve the amenities that make Campbell attractive. He said Campbell’s general fund is roughly $70 million and that property tax and sales tax are the two largest general-fund revenue streams. He added that the city’s hotel portfolio generates about $4 million annually and that sales tax is an especially responsive revenue source.

Highlighting a core vulnerability, Donado said Campbell’s sales-tax base is highly concentrated: the top 100 payers provide more than 70% of sales-tax revenue and the top 25 more than 40%, underscoring the importance of retention. "Retention is a lot easier than adding many new ones," he told the commission.

Donado reviewed commercial real-estate trends: retail in Campbell has shifted toward food and experience uses; office vacancy is high (he cited a roughly 32% vacancy rate in the local office market); industrial space remains regionally important and should be preserved; and the hotel market is constrained by current floor-area-ratio limits, which may make new hotel projects infeasible without modest zoning adjustments.

On policy, Donado proposed several near-term and strategic changes: consider tightening allowances for nonindustrial uses in key industrial districts, explore reclassifying some CUPs so administrative review is the default for low-risk commercial projects, re-examine the regulatory distinction between quick-service and full-service restaurants (which can affect alcohol permitting), and identify ways to streamline approvals for exterior investments and small interior changes.

Commissioners asked how housing development factors into the revenue picture and whether reducing some local requirements (for example, the local inclusionary percentage or certain impact fees) would materially change feasibility. Donado said housing can indirectly support retail and that incentives or temporary fee waivers (San Jose was cited as an example) can accelerate production; he also urged careful trade-offs so important employment land is not lost.

Public comment included an extended statement from a local developer who praised Donado’s outreach, urged protecting industrial pockets from residential encroachment, and called out permitting friction—specifically slow county fire review—as a deterrent to projects and a candidate for streamlining.

The commission’s streamlining subcommittee outlined a five-step plan—ordinance review, stakeholder interviews, jurisdictional benchmarking, permit-timeline analysis, and a three-to-four-month reporting timeline—with staff indicating roughly 40% allocation of staff time to support the effort. Staff also noted that a city report on SB79 (state housing law) is scheduled for the March 24 City Council agenda.

Next steps: the subcommittee will meet with staff and stakeholders, benchmark peer cities, and return recommendations to the commission in the coming months; staff will provide the SB79 report to the council as scheduled.