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Apr 20th
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Moving On

news2The City of Santa Cruz loses its economic development director

After four and a half years as the Economic Development Director for the City of Santa Cruz, Peter Koht is leaving the position to work on expanding OpenCounter, an open-source software aimed at helping people navigate the difficult process of starting a new business.

Koht took the position in late 2008, as the country was experiencing what many economists say is the worst financial crisis since the Great Depression of the 1930s—it was certainly not an easy time for someone tasked with a city’s economic development.

Koht is quick to point out that he was just one member of a team focusing on economic development and bringing projects to fruition. That team included Bonnie Lipscomb, executive director of economic development, council members, the city manager’s office and staff in the public works and planning departments, among others.

He declined to comment on whether he feels he achieved all of the goals he had during his tenure, but says he leaves the position proud of what he has accomplished.

“In general, I'm proud of what I was able to do in my 4.5 years at the city,” Koht says. “I worked with great people who gave me a lot of freedom to work on projects like the Project for Innovation and Entrepreneurship and OpenCounter, as well as collaborate on policy initiatives like the downtown parking incentives, reduced traffic impact fees for adaptive reuse of older building stock, broadband infrastructure development and better online and social communications.”

That communication building is something Councilman Don Lane believes has been hugely important.

“Peter was incredibly well-focused on personal relationships, helping city council members meet with business owners, strengthening those relationships, and really helping business owners on a more personal level,” Lane says.

That extended to helping would-be business owners find locations and work through the process, he says.

“He worked very closely with anyone who was shopping around [for a location],” Lane says.

He also credits Koht with being instrumental in increasing Internet access in the city, as well as using technology to help move the city forward. One of the ways in which Koht did so was by using social media to connect residents with city leadership to help solve the city’s budget crisis. A need for immediate decisions prompted the creation of a special community feedback portal on the city’s website as a way of getting residents engaged and giving them an opportunity to offer constructive suggestions to the fiscal problems in Santa Cruz.

“He’s been a great asset for the city,” Lane says.

Lane says Koht’s absence will be hard for the city as they seek his replacement, but he is hopeful city officials will be able to find someone who can fill his shoes successfully.

“In the short-term, we are really losing someone who had those [strong] relationships,” he says.

On a longer-term basis, the affect of Koht’s departure really depends on who and what comes next. Lane says he’s confident the city can bounce back from his absence.

Initially, his job function was housed in the city’s Redevelopment Agency, which was eliminated in early 2012 along with other redevelopment agencies throughout the state in an effort to help solve California’s fiscal crisis. The dissolution was first proposed by Gov. Jerry Brown, who argued that redevelopment funds were being abused across the state and were diverting money from schools, fire departments and other municipal needs.

That proposal, upheld by a California State Supreme Court decision, struck a definite blow to Santa Cruz, where redevelopment funds were largely responsible for helping the city recover and grow from the 1989 Loma Prieta earthquake. Redevelopment funds are credited for accomplishments including rebuilding Pacific Avenue after the quake’s destruction, the establishment of the Tannery Arts Center and numerous other projects throughout the county.

The successor agency to the city’s Redevelopment Agency became known as the Economic Development Department.

Koht has little comment on the closure of redevelopment, except expressing confidence in continued development despite the dissolution.

“Efforts to reduce out-commuting, encourage the renovation of existing hotel stock—such as Hotel Paradox and the Dream Inn, Internet infrastructure, signage and neighborhood branding, as well as making stronger connections between the beach and downtown through projects like the Santa Cruz Warriors and the trolley will continue in Santa Cruz,” he says. “No matter what the administrative structure is.”

City Manager Martin Bernal says that Koht's departure definitely doesn't mean the city will stop pushing economic development, but that the role he vacates may change somewhat.

"Economic development is obviously important for the city," he says, but the internal structure is still "kind of work in progress." 

Bernal says city officials are still assessing funding structures, among other attributes, as they work to continue the strides Koht made in terms of recruiting businesses and job creation. 

"We want to retain those functions [of Koht's work] and enhance them," Bernal says, adding that while the role would continue, it may be in a different capacity. 

City councilmembers have made it clear they feel economic development is an important function, he says, but the department has been so busy with post-redevelopment work that there hasn't been sufficient time yet to truly evaluate its structure and assess "what we have access to." 

Meanwhile, though the economy has improved since Koht came in, there is still plenty of progress to be made.

Koht took the position around the same time the multimillion dollar Rittenhouse Building at the corner of Pacific Avenue and Church Street was unveiled, an extensive project that remains unoccupied nearly five years later and serves almost solely as a venue for special events. The four-story building's vacancy looms over downtown, a tangible symbol of the economic problems that continue to plague the city. 

Still, city officials remain optimistic. 

Bernal says that the local economy is improving but it has been moderate, though "certainly different."

City officials, he says, will continue to work on utilizing and leveraging the city's strengths, particularly through developing stronger relationships with UC Santa Cruz and expanding upon the area's recreational sports and organic foods industries. 

"That's all been very positive," he says. 

Tourism continues to be a huge source of revenue. Though the city won't see the numbers from this year's summer season quite yet, Bernal reports that so far it looks very positive—a development he attributes in large part to the city's push to highlight Santa Cruz as a destination. 

As always, creating more well-paying jobs and other quality of life issues will continue to be a central concern, he says. 

 As for Koht’s next step, he will be working hard to bring the OpenCounter software to other cities. OpenCounter is aimed at helping people navigate the process of starting a new business, from providing information about applicable regulations and fees to assisting with the complex process of planning. Through a website portal, OpenCounter helps individuals determine what paperwork they will need to submit and coaches them through the planning process, including the actual submittal of documents and advice on how to proceed.

The startup, launched with help from San Francisco-based Code for America, is aimed at being an easy road map for would-be small business owners. It officially launched early this year, after about a year of development and coordination led by Koht. The company recently received $450,000 from the John S. and James L. Knight Foundation to help expand its open-source software, and has continued support from the Code for America Accelerator Program.

“We hope that our software will become a powerful economic development tool for other cities to follow Santa Cruz's lead in empowering entrepreneurs to start and scale new businesses,” Koht says.

Comments (2)Add Comment
County Supe Wanabe
written by Bill Smallman, August 01, 2013
I ran for 5th District Supervisor on creating an Economic Development Board for the County which did not resonate very much with voters. Full time staff costs a lot, and advisory Boards costs are negligible. Talented business owners are excited to be on Boards, as it so important for the community and their business. You have to ask what exactly you want an economic director to do, and I believe an advisory Board can do it better. It can find inefficiencies in Government, provide free review for business plans, recommend infrastructure improvements, invite and attract companies etc. etc.
Unsuccessful at best!
written by Mr. Potatohead, July 31, 2013
What fab economic developments has this person achieved in his tenure? Sounds like he spent a good deal of time planning his next move on your dime. It appears that he had a number of "feel good" moments, but not much else. Maybe we should hire a surfer? Couldn't do any worse. And, this article sounds like a promo for his new company. Anyone want to invest? I'm disgusted!

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