After more than 18 months in the making, the City of Temecula will officially open its much-touted 17,000-square-foot “business incubator” Saturday.
The opening comes on the heels of the city receiving 531 new business applications since March of this year, according to Temecula Mayor Pro Tem Mike Naggar.
The opening also follows news that the city’s sales tax receipts for the second quarter (April –June) of 2012 show a 9.9 percent increase compared to the same period one year ago.
Talk to Naggar and Mayor Chuck Washington and they are positively giddy about the city’s economic direction.
“People want to be here,” Naggar said. “We’re very business-minded, we have the demographic and we have quality of life.”
Called the Temecula Valley Entrepreneur’s Exchange (TVE2), the new business incubator is located in the renovated space at 43200 Business Park Drive where City Hall used to be before it was moved to Old Town.
Based on a business incubator model in Ventura, TVE2 features office space for new “innovative” companies to start and grow, along with tools to realize the dream. Business community mentors, technology, and support personnel are available to those companies accepted into the incubator program.
“There’s a win in it for everyone,” Washington said, explaining that the companies get “a help up, not a hand out.”
Businesses must be accepted into the program through a selection process and are expected to eventually graduate and move out of the facility. The hope is that the incubator will spawn new businesses and jobs, Washington said.
The cost to renovate the old City Hall was roughly $160,000 -- money Washington said came from an old lawsuit the city won against the county. The award in that case was approximately $225,000, so there is still money left over for the incubator, according to Washington.
“We have not had to touch the city’s budget for this project,” he said. “Even if we spend the quarter million, it’s a drop in the bucket in terms of an investment into creating local higher paying jobs.”
To date, Washington said applications into the incubator have already been received.
Why do businesses want to be in Temecula? Naggar contends it’s due to the city’s highly desirable demographic, which he says includes a large college-educated middle-income sector.
According to the most recent census figures, 31 percent of city residents over the age of 25 hold at least a bachelor’s degree and the median household income in Temecula is $77,850.
The figures are slightly higher than state numbers, and both Naggar and Washington are banking on Temecula’s population becoming even more educated and more affluent in the future. As per the city’s 2030 Plan, also known as the Quality of Life Master Plan, the city is actively working to beef up its biotech and education sectors. , and Naggar said a second full-scale nationally recognized hospital is also eyeing Temecula. An announcement on that deal is expected shortly, Naggar said.
“That will seal – almost forever – the economics of Temecula,” Naggar said of a second medical facility.
While doctors’ bills don’t generate local sales tax revenue for the city, healthcare and biotech professionals earn higher wages, which translates into more money spent locally.
Hospitals and doctors offices also attract biotech companies that further fuel the local economy, Naggar said, but another piece of the puzzle is higher education.
The city is currently working with California State University officials to expand the existing San Marcos campus in Temecula. Enrollment at the facility is swelling, according to Naggar.
While the existing Temecula campus still has room to grow, Naggar said officials are also eyeing other areas of the city where there’s a relationship between business and education. For example, the second floor of the business incubator may be a good spot for a limited number of business classes, Naggar explained, noting that there can be synergy between businesses looking for new ideas and bright interns looking for real-world experience.
Temecula’s 2030 plan also focuses on how the city will shape its future. Naggar argues that while Temecula is not turning its back on any business, there are certain sectors he would rather not see expand inside the city limits. For example, large–scale distribution centers and manufacturing plants are not a good fit for Temecula, he said, noting that cities like Murrieta and Perris, as well as outlying unincorporated areas, may be better suited given that they already have burgeoning industrial centers.
The city is also in the process of studying a possible revamping of the Jefferson Avenue corridor. Officials are looking at mixed-use zoning along the corridor, including urban “loft-like” stacked condos surrounded by retail and commercial development.
Washington, who holds a master’s degree in public policy, said young, educated professionals often prefer to live in upscale urban-type settings versus large tract homes that require a greater financial commitment to maintain.
“We have to plan for the future,” he said.