Petaluma’s business outreach pays off

Earlier this year, Kitsbow, a high-end mountain bike apparel company based in Petaluma, desperately needed workers to operate a specialized industrial sewing machine. The company could have outsourced the jobs to a country like China, but it wanted to keep manufacturing local.

Enter Heather LoBue. The program manager for the Sonoma County Economic Development Board was contacted by the city to help retain businesses and jobs in Petaluma. It took seven months, but LoBue was able to help Kitsbow recruit four industrial sewers, and help the company get a $25,000 grant to train them.

“The alarm is when a business says ‘hey, we’re ready to leave Sonoma County. It’s too expensive to do business here,’?” she said. “Whatever it takes to keep businesses here, we’ll help with that.”

A thriving business community, and the tax revenue and jobs that come with it, is essential to a city like Petaluma. This was evidenced by the recent economic downturn, in which companies folded, left town or shipped jobs overseas.

Petaluma, like many other cities, made a concerted effort to attract and retain businesses. The first step was to create a welcoming business climate, and in 2011, the city hired Ingrid Alverde as economic development manager.

When Alverde arrived, commercial space in the city was 40 percent vacant and the industrial vacancy rate was 20 percent.

“The effort started when the city implemented its economic development strategy,” she said. “We began marketing the city as an attractive place to start and grow a business. Petaluma would benefit from that economic activity.”

To streamline the process and make it easier for potential business to locate in the city, Petaluma formed a development review team to expedite the permitting process. The team has representatives from the engineering, planning, fire, building, public works, police and economic development departments, and meets to review development applications.

“It’s really helped in demystifying the permit process,” Alverde said.

Alverde’s department launched a toolkit to help answer questions that people might have when starting a new business in Petaluma. The department also started a website,, to promote the city to potential businesses looking to relocate and current Petaluma businesses seeking to expand.

In four years, the city’s efforts, combined with an upswing in the economy, have led to impressive gains in almost all economic indicators in Petaluma. The commercial vacancy rate is down to 12 percent and the industrial vacancy rate is at 5 percent, and developers are now looking at adding more space to the city.

Having more businesses in the city increases the property values of the occupied spaces, which leads to more property tax for the city, Alverde said. And the added jobs bolsters sales tax, while traveling business professionals increase hotel tax revenue, she said.

The city’s sales tax revenue is up 40 percent from $8.8 million in 2011 to $12.4 million in the past fiscal year. In the same period, property tax is up 27 percent, business tax is up 32 percent and hotel tax is up 54 percent, according to city data. The city added 3,500 jobs in the past five years going from an unemployment rate of 9 percent to the current 2.9 percent jobless rate.

“Cities want to be the driver of their economic development,” Alverde said. “The cities that are out there telling their story become top of mind.”

(Contact Matt Brown at On Twitter @MattBrownAC.)

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