Economic Analysis

ECONOMIC DEVELOPMENT
BACKGROUND REPORT OF FINDINGS
FEBRUARY 17, 2009
Prepared for
City of Atascadero
Prepared by
Applied Development Economics
100 Pringle Avenue, Suite 560  Walnut Creek, California 94596  (925) 934-8712
2151 River Plaza Drive, Suite 150  Sacramento, CA 95833  (916) 923-1562
www.adeusa.com
With
The Placemaking Group
CONTENTS
I. Summary of Economic Opportunities .....................................................................1
II. Introduction .............................................................................................................5
III. Economic Opportunities .........................................................................................11
IV. Economic Development Goals ................................................................................45
V. Action Plan ..............................................................................................................49
VI. Appendix A: Fiscal Impact Methodology ................................................................51
VII. Appendix B: Atascadero Survey ...............................................................................59
VIII. Appendix C: Economic Base Analysis .....................................................................71
IX. Appendix D: Community Forum Handout ............................................................79
I. SUMMARY OF ECONOMIC OPPORTUNITIES
The essence of Atascadero stems from its residential quality of life. Yet the economic
prosperity of the community is vital to maintaining and enhancing the amenities that
make Atascadero special.
The City has a number of economic development opportunities, both in the short
term and in the longer term that it can pursue to strengthen its local economy. The
City has been moving in several positive directions over a number of years, but needs
to focus on completing key projects that will make a difference in the future of the
City.
RETAIL AND DOWNTOWN DEVELOPMENT

Much of the dollar-volume of retail leakage (sales lost to other communities), could be
stemmed with the development of regional-serving retail centers at the Del Rio Rd
interchange. The kind of “big box” development that would serve many of the needs
of the community would be best located at this type of site. Once new regional centers
are in place at Del Rio Rd., it may be possible to extend the commercial development
further north along the west side of El Camino Real to serve other kinds of regional
retail uses such as high end autos.
However, the community’s desire for certain kinds of retail stores, such as quality
apparel and fine dining establishments will not likely be served at this location. The
Downtown would be the most desirable place to meet these kinds of needs but
substantial additional progress is needed to transform Downtown into a vibrant
shopping, entertainment and cultural center for the City. The Colony Square project
would be an enormous step toward this end. These are difficult times to move
innovative projects forward but the City should continue its efforts to bring this
project to fruition. Similarly, any possible efforts to move the renovation of the City
Hall Rotunda forward would be critical to re-establishing Downtown as a civic center
and a visitor attraction.
The focus in Downtown on visitor attractions is a third major opportunity for the
City to pursue. The additional spending power of visitors to the City could
significantly boost the retail market in Downtown, which currently suffers from the
extensive diffusion of retail development along the full length of El Camino Real
through the City. Visitors require attractions, which, in addition to the historical
Rotunda and the Carlton Hotel, could come in the form of an arts colony coupled
with additional entertainment opportunities at Stadium Park. The Art Walk has been
quite successful in highlighting the widespread presence of fine artists in Atascadero.
The City needs to build a brand to promote this cultural quality and entertainment
opportunity.
Applied Development Economics, Inc. 1

The Downtown Revitalization Strategy adopted by the City in 2000 has a number of
excellent proposals. The San Simeon earthquake has necessarily diverted the City
attention with regard to the Rotunda but it would be important for the City to
continue its focus on implementing these ideas. In particular, the Downtown would
benefit from more mixed use development. This would not only create more
nighttime activity to support local businesses but it would help to increase the
property values in Downtown and lead to the opportunity to implement more
consistent architectural design themes to enhance the visual character of the
Downtown core.
Over the longer term, greater focus needs to be placed on redeveloping some of the
existing uses in proximity to the Sunken Gardens so that this amenity can provide a
more significant gathering place. Enhancing Atascadero Creek as a pedestrian feature
and a setting for outdoor restaurant seating or small art boutiques, as well as
increasing building intensities on the north side of Sunken Gardens, would help to
create more of a visitor friendly commercial core in the City. Once these kinds of
projects have been implemented, redevelopment of the Junior High School site
could create another major focal point in Downtown.
The City should recognize that in order to achieve greater density of activity in
Downtown, it may need to consolidate some of the existing strip commercial along
El Camino Real. It may also wish to consider constraining the travel lanes on El
Camino through Downtown to maximize public and pedestrian space as well as to
create opportunities for innovative building designs to complement the public features
at Sunken Gardens and the Rotunda site.
TOURISM DEVELOPMENT
The City’s recent Tourism Marketing Plan emphasizes the idea that Atascadero is best
served by promoting its authenticity. This certainly means marketing its existing
attractions such as the Zoo, Lake Park, the historic Downtown and the Chalk
Mountain Golf Course as well as developing additional attractions such as an Arts
Colony and entertainment venues.
While Downtown presents a significant opportunity to enhance visitor attractions in

Atascadero, it is by no means the only opportunity. The proposed Eagle Ranch
annexation area could support a major new attraction for Atascadero such as an
equestrian center that would host frequent events on various horse enthusiast circuits.
Other kinds of resort attractions may also be possible on this property, with the key
being to find ways of inducing visitors to stay longer in Atascadero and to utilize
existing and new lodging and restaurants in the City.
One consideration is the fact that many visitors to North San Luis Obispo County are
attracted to the many wineries in the area. While the center of this activity is in Paso
2 Applied Development Economics, Inc.

Robles, the extent to which Atascadero can draw wine-related business activity into
town will help sell the community as an integral part of the wine country.
AN INCUBATOR OF INNOVATIVE INDUSTRIES

In addition to retail and professional services, a community needs to provide jobs for
its workforce. The Atascadero State Hospital serves as a major employer in the City,
but no other sites in the City can support another employer of that scale. However,
the City can create other assets attractive to business, including access to major
broadband facilities, a well educated workforce, and a business climate supportive of
innovative industries.
New business opportunities are emerging on a number of fronts as investments are

made in energy efficient technologies, alternative energy sources, new communications
technologies and other environmentally responsive products and services.
Atascadero is in a position to support small business development in these fields that
tie into broader markets globally as well and throughout the County.
A cornerstone in the foundation of innovative infrastructure could be a technical

training institute. Such a facility could be an attractive business asset as well as
helping the City and regional labor force to stay at the forefront of technological
capabilities.
These opportunities and recommendations form the basis of this economic strategy’s
goals and objectives. The action plan (to be completed upon approval of economic
development goals) will outline in greater detail the specific initiatives that would help
make these opportunities a reality.

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II. INTRODUCTION
Atascadero’s current Economic Development Strategy was adopted in 2003. The

purpose of that document, developed internally by the City, was to provide a
framework for making decisions related to the allocation of economic development
resources and to improve coordination among the many City Departments and
external organizations involved in economic development activities. The 2003
economic development strategy consisted of four major program components:
business development; community image and promotion; community revitalization;
and, economic development partnerships. The City’s intent was to update that
economic strategy every five years.
In 2007, the City Council authorized the City Manager to begin the process of
updating the economic development strategy and allocated funds for that purpose. In
April 2008 after an extensive selection process, the City Council chose Applied
Development Economics to prepare the economic development strategic plan.
A. PURPOSE – WHY ECONOMIC DEVELOPMENT?

Economic development is but one of several tools that the City has for helping it
achieve its broader community goals. Other tools include the General Plan and Zoning
Ordinance, the Redevelopment Agency Implementation Plan, the Capital
Improvement Plan among others. The Economic Development Strategy is
distinguished by its focus on improving the city’s economic vitality. Due to the inter-
relatedness of these plans, it is important that each supports the other.
VITAL CYCLE
The vital cycle is a way of describing the inter-dependence of a community’s economy
and its quality of life. Wealth generated by successful businesses is available to support
community programs and services, including public safety, recreation, roadways, and
education. In turn, a community’s quality of life, as manifested in the quality of its
infrastructure, neighborhoods, schools, parks, libraries, safety, and commercial core
attracts further investment by business.
Though every community is unique, there are four major reasons for economic
development that are common across all communities. These include enhancing
quality of life; providing career opportunities through quality jobs; providing a
supportive environment for business to succeed so that they provide goods and
services desired by residents; and, to provide resources that can be tapped by the public
sector to pay for public services.

Economy Community
QUALITY OF LIFE
The ultimate purpose for economic development is to improve the quality of life for
its residents. In most communities, this means improved educational opportunities,
recreational facilities, public safety, and utilities. It also means choice in safe travel
options (bicycling, transit, car, walking), attractive neighborhoods and shopping
districts, diverse opportunities for entertainment and recreation.
JOBS AND ECONOMIC PROSPERITY

Another key purpose of economic development is to provide a range of career
opportunities that allow workers to increase their income and standard of living over
time and to enable the businesses that employ them to continue to succeed. Thriving
businesses provide stability not only for their employees, but also for the communities
in which they are located. By supporting the growth of businesses, a community is
supporting its own sustainability. Local jobs allow for shorter work commutes and
greater re-cycling of dollars within the community.
SHOPPING, ENTERTAINMENT, ARTS

A community is often valued for the selection and quality of its shops, entertainment
and cultural venues and recreational opportunities. The combination of these often
defines the community as a place and just as importantly how it is perceived by both
residents and the outside world alike. These amenities are often what residents become
attached to or identify with in addition to their places of worship, volunteer activities
and work. An economic development strategy recognizes this and includes strategies
for enhancing these aspects of the community. Doing so tends to have direct positive
impacts on the local economy as increased spending on entertainment supports other
businesses, including restaurants, lodging, and specialty retail.

FISCAL BENEFITS
Cities in California have few options for raising the revenues they need to provide the
level of services expected by their residents. A major focus of most economic
development strategies is to ensure the continued health of the retail sector and
commercial, industrial, and residential property valuations.
The City’s economic base provides important benefits in terms of helping to fund
municipal services for its residents. Residential and non-residential land uses provide
different levels of local tax revenues and also exert differing demands for City services.
The two main revenues that cities depend on are the property tax and the sales tax.
Residential uses tend to generate more property taxes while commercial uses are the
primary source of sales taxes.
As shown in Figure 1, residential uses, including both single and multi-family units, are
estimated to create about $11.5 million in revenue for Atascadero, about two-thirds of
which are property taxes. (See Appendix A for the derivation of the figures discussed
in this section). Commercial uses, mainly retail and service commercial, generate an
estimated $5.9 million per year, of which $4.2 million is sales tax. Industrial uses
generate a relatively small amount of property tax, while lodging facilities generate
Transient Occupancy Taxes (TOT) totaling about $700,000 of the nearly $800,00
generated by this land use annually.
FIGURE 1
TOTAL ANNUAL GENERAL FUND REVENUE IN ATASCADERO BY LAND USE
$12,000,000
$9,947,178
$10,000,000
$8,000,000
Dollars
$5,930,596
$6,000,000
$4,000,000
$2,000,000 $1,473,230
$793,874
$165,916
$0
Single Family Multi-Family Commercial Industrial Lodging
Land Use
Source: ADE, Inc.

While residential uses are the highest revenue generators, they also require the highest
expenditures for services. For the Atascadero General Fund, it is estimated that
residential neighborhoods require a combined total of about $16.5 million in police
and fire protection, street maintenance, parks and recreation and other community
services (Figure 2). Relatively little service demand is created by non-residential uses,
although police protection of retail centers accounts for much of the service cost for
commercial uses.
FIGURE 2
TOTAL ANNUAL GENERAL FUND EXPENDITURES IN ATASCADERO BY LAND USE
$16,000,000
$13,561,309
$14,000,000
$12,000,000
$10,000,000
Dollars
$8,000,000
$6,000,000
$4,000,000 $2,942,780
$1,955,410
$2,000,000
$158,604 $59,319
$0
Land Use
Source: ADE, Inc.
The net effect, then, is that non-residential uses generate about $4.7 million annually in
surplus revenue over costs for the City General Fund, which the City uses to help pay
for services to the residential neighborhoods (Figure 3). This is very typical of most
California cities and demonstrates one of the primary benefits of economic
development. In Atascadero, this analysis particularly illustrates the benefit of sales tax
producing businesses. However, if the City had stronger tourism and industrial
sectors, these types of businesses would also contribute significant revenues toward the
cost of the services in Atascadero.
While industrial development may not provide a significant net fiscal benefit in terms
of property and sales tax, the number and quality of jobs located in the City provides a
significant positive economic impact. Workers’ wages are spent at local shops and
restaurants and provide a positive multiplier effect for the entire community.
Businesses purchase supplies from nearby businesses, further enhancing the multiplier
effect.

FIGURE 3
NET FISCAL IMPACT
$5,000,000
$3,975,186
$4,000,000
$3,000,000
$2,000,000
$1,000,000 $734,555
Dollars
$7,312
$0
-$1,000,000
-$2,000,000 -$1,469,550
-$3,000,000
-$4,000,000 -$3,614,131
Land Use
Source: ADE, Inc.
B. PROCESS AND PUBLIC INPUT

Success in implementing an economic strategy is a direct result of the planning process
design. From the outset, it was understood that to be successful, this process would
have to involve the whole community, including businesses, residents and community
leaders. To achieve this level of participation, the process was built around a multitude
of ways to engage the public, including a web site devoted entirely to the economic
planning process. The other means of engaging the public included interviews with
community and business leaders, focus groups with businesses, a household retail
shopping survey, a public forum and at least four City Council meetings where
interim findings were presented (see Figure 4 for overall project process and timeline).

FIGURE 4
ATASCADERO ECONOMIC STRATEGY TIMELINE
Timeline June-October 2008 October – January – May,

February, 2008 2009
Work SWOT Assessment Identify Economic Prepare Strategic

Market Analysis Development Plan
Program Goals
Retail Analysis
Fiscal Study Define Product
Site Assessments
Public Input Interviews Public Forum City Council

Focus Groups City Council Meetings
Household Survey Meetings
City Council
Meetings
Interviews. ADE interviewed 30 business executives and community leaders in June,

2008 to obtain insights into current and future economic development issues. The
interviews provided key information required for the completion of an analysis of
Atascadero’s economic strengths, weaknesses, opportunities and threats. The
interviews also helped with the development of a community profile that will be used
to market Atascadero’s strengths and opportunities to the outside world.
Focus Groups. Also in June, ADE facilitated four focus groups to better understand
the trends and issues driving change in Atascadero’s businesses and social service
organizations. Each focus group addressed a different set of organizations. These
groupings were: new media; tourism and hospitality; small business; and, community
services and growth management. Information obtained from these focus groups was
used to further develop the SWOT analysis which can be found on pages 43 and 44.
Household Retail Shopping Survey. In early July, a household retail shopping
survey was mailed to every residence in Atascadero (See Appendix B for a summary of
survey findings and a copy of the original survey). The survey findings were used to
more accurately describe existing shopping patterns and to help determine the future
retail opportunities for Atascadero.
Public Forum. On November 22, ADE facilitated a public forum at the new
community center. Approximately 70 persons attended. The purpose of the
community forum was to begin the process of developing goal statements for the
economic development strategy. The last section of this plan includes many of the goal
statements first articulated at that public forum. Appendix D includes the handout
prepared for that forum.

III. ECONOMIC OPPORTUNITIES
A. RETAIL MARKET ANALYSIS

The retail market analysis in this section estimates the local demand for retail goods,
and compares this to the sales patterns by types of retail stores in Atascadero. This
information provides a baseline estimate of how the community’s stores currently
attract local and regional retail spending. It identifies what store groups make up
Atascadero’s strongest retail sales generators, and which categories have shortcomings
that can potentially be addressed with new retail store attraction. The results of the
retail analysis indicate that Atascadero has a larger and more diverse retail base than
generally thought.
Atascadero has been perceived as a retail market that loses much of its spending
support to neighboring communities that have a more regionally oriented retail base,
such as San Luis Obispo and Paso Robles. The results from the household survey
indicate a strong perception by local residents that Atascadero does not meet many
retail needs.
ADE’s analysis indicates that Atascadero has one of the lowest per capita taxable sales
levels in the County, lower than every other city except Grover Beach, and lower than
the County average by nearly 13 percent. In particular, the City is losing significant
sales in the apparel and general merchandise categories (which includes department
stores, discount centers, warehouse clubs). In addition, the City’s auto sales sector has
been weakened by the loss of the Ford dealership and the City will see a significant
downturn in this sector going forward. The current recession will also affect one of the
City’s strong retail sectors – home improvements. The City’s building materials sector
has done well at attracting construction materials sales as well as household
expenditures, but the downturn in the housing market will certainly affect sales over
the next couple of years.
The City does have some retail strengths from which to build. Although per capita
household taxable sales are low, non-taxable sales of groceries and prescription drugs
are high. This suggests that the City attracts shoppers from the surrounding
unincorporated communities for local-serving items. In addition, as a crossroads of two
state highways, the City picks up a share of visitor spending. The San Luis Obispo
Economic Vitality Corporation recently released a countywide study of tourism
which indicated that total visitor taxable retail spending in the County was about $535
million in 2007. This would represent about 18 percent of total spending in the
County. In the North Inland County area, spending of this type is estimated at about
$94 million. Some of this spending occurs in Atascadero as evidenced by high sales of
gasoline, fast food and some specialty retail items.

The analysis below provides a background context from which discussion of planning
initiatives can begin. The retail market analysis consists of two main parts: an estimate
of household retail spending and a comparison of overall spending potential with sales
by Atascadero retail establishments. The household retail spending totals are calculated
using an analytical model developed by ADE. The taxable sales data is an annual total
listed by retail category. The businesses listed in the analysis encompass all of the retail
businesses operating in the City of Atascadero. The retail sales data comes from the
California State Board of Equalization sales tax allocation records, and the data was
audited by Hinderliter deLlamas Associates. Because certain retail items, such as food
and prescription drugs, are not taxable, the analysis includes a conversion that
calculates nontaxable sales.
As described later in this section, retail leakage represents the gap between local
household spending and retail sales by local retail establishments. This leakage
represents an existing shortfall, as well as an opportunity for both retail expansion and
possible business attraction.
ATASCADERO’S RETAIL SETTING

According to the California Department of Finance, the City of Atascadero has a
population of just under 27,000 household residents, with nearly 7,300 households.
Inflation-adjusting annual income for Atascadero households based on the 2000 Census
resulted in an approximate current household income of $66,000. However, data from
the Atascadero Household Survey found that responding households had an annual
income closer to $84,000, while the UCSB Economic Forecast Project estimates that
the 2007 average household income was about $70,000 with an average family income
of nearly $78,000. Given the broad range of estimated incomes, ADE used a midrange
figure to calculate retail demand.
REGIONAL COMPETITION
Atascadero’s retail sector has historically been overshadowed by the more visible and
prominent retail centers in Paso Robles and San Luis Obispo. Because those retail
centers feature more well-known stores, many of which serve more upscale shoppers,
Atascadero’s retail offerings do not appear as attractive on the surface. Atascadero’s
strengths are with local-serving retail categories, as well as home improvement stores
and highway commercial uses. The competing regional centers in Paso Robles and San
Luis Obispo feature large concentrations of stores in apparel, specialty retail, and
general merchandise stores.
In Paso Robles, the 300,000 square-foot Paso Robles Town Center and the 312,000
square-foot Woodland Plaza II, together present formidable competition in very close
proximity to Atascadero.1 These competing centers are significant because they are
1
National Research Bureau; Shopping Center Directory; 2006 Edition.

already anchored by large-scale retail stores such as Target and Wal-mart that draw
spending away from Atascadero. In contrast, most of the Atascadero shopping centers
feature much smaller spaces and the retail mix in general includes smaller types of
businesses, which makes it more difficult to offer an attractive price and product
selection.
In San Luis Obispo, numerous shopping centers are located adjacent to Highway 101,
and together create a regional shopping destination that draws shoppers from many
miles around. These centers include the 650,000 square-foot San Luis Obispo
Marketplace, the 250,000 square-foot San Luis Obispo Promenade, and the 316,000
square-foot Madonna Plaza Shopping Center. Each of these centers is anchored by a
large-scale department store or discount store that supports numerous secondary
anchors and specialty stores.
Taxable Sales Performance Comparison
Compared to other communities in San Luis Obispo County, Atascadero has per
capita retail sales that rank below the countywide average, as shown in Table 1. In
2007, Atascadero’s taxable retail sales averaged about $9,900 per resident, while the
county as a whole generated per capita taxable retail sales of over $11,300. By
comparison, San Luis Obispo, Pismo Beach, and neighboring Paso Robles each
generate around $20,000 in taxable retail sales per resident.
TABLE 1
COMPARISON OF PER CAPITA TAXABLE RETAIL SALES,
2007
Per Capita Taxable
City or Town Retail Sales
San Luis Obispo $23,765
Pismo Beach $21,446
Paso Robles $19,671
Arroyo Grande $15,821
Morro Bay $11,419
Atascadero $9,882
Grover Beach $5,577
San Luis Obispo County $11,342
Source: ADE, Inc., data from California Department of Finance
and Board of Equalization.
Notes: Per capita calculations are based on comparison of taxable
retail store sales with household population.
Taxable sales does not include sales for nontaxable items such as
prescription drugs and groceries. In addition, the data for retail
sales excludes some store categories such as building materials
dealers that are included in the retail market analysis elsewhere in
this report.
LOCAL RETAIL SPENDING

Based on data from ADE’s retail demand model, the estimated annual retail spending
by Atascadero households is about $232 million, as shown in Table 2. It should be

noted that not all of this spending occurs in Atascadero because neighboring
communities provide retail offerings not available locally.
While local households constitute the primary shopping group within Atascadero, the
community also draws spending from residents in surrounding communities, business-
to-business transactions, travelers along Highway 101 and some overnight visitors.
This distinction between spending and where it occurs will be discussed further in the
section pertaining to retail leakage.
Household spending among Atascadero residents is distributed across the full range of
retail store categories. The largest retail store spending categories are food-oriented
stores and automotive businesses. Each of these retail store categories accounts for over
$50 million in household spending. Building materials and general merchandise stores
account for more than $24 million and $42 million in sales, respectively.
TABLE 2
SUMMARY OF RETAIL DEMAND AND LEAKAGE/REGIONAL SALES CAPTURE, 2007($MILLIONS)
Net
Atascadero Capture
Total Household Total Retail Leakage of of
Household Spending to Sales in Household Regional
Retail Group Demand Atascadero Atascadero Spending Sales
Total $232.4 $153.2 $338.3 $79.2 $185.1
Apparel Stores $9.9 $2.0 $3.7 $7.9 $1.7
General Merchandise $41.9 $19.1 $35.7 $22.8 $16.6
Specialty Retail $15.5 $9.4 $25.5 $6.1 $16.1
Food, Eating & Drinking $66.9 $53.6 $88.7 $13.3 $35.1
Building Materials & Home Furnishings $24.5 $17.4 $83.2 $7.1 $65.8
Automotive $73.6 $51.7 $101.5 $21.9 $49.8
Source: ADE, Inc.
Food, Eating, and Drinking Group

The food, eating, and drinking group consists of grocery stores, specialty food stores,
and restaurants and other food service establishments. Atascadero households generate
an annual demand of approximately $67 million. Demand is primarily driven by
grocery stores and restaurants.
Automotive Group
Automotive businesses include automobile dealerships, gasoline service stations,
motorcycle and RV dealerships, auto parts stores, and other vehicle sales. This
category generates an annual household spending total of approximately $74 million.
The majority of this spending goes to automobile dealers and gasoline service stations,
with more of the spending going to the dealerships.
General Merchandise Group
General merchandise stores include traditional department stores, discount stores,
variety stores, warehouse clubs, and drug stores. Household spending in this category

by Atascadero residents totals $42 million annually with department/discount stores
accounting for the majority of the demand.
Other Retail Groups
Atascadero households spend $10 million at apparel stores. These stores include men’s
and women’s clothing, family clothing, and shoe stores. Demand in this category can
range from high end designer stores, to discount clothiers and other specialty clothing
stores.
Atascadero households spend nearly $16 million at specialty retail stores. This category
is the most varied retail group, and includes store types such as gift stores, florists,
photographic equipment, sporting goods, jewelry, office supplies, books, music, pet
stores, toys, and stationery.
The building materials and home furnishings group includes all types of home
improvement stores such as hardware stores, home centers, garden supply stores, and
paint/wallpaper stores. In addition, the group includes furniture stores, home
furnishings, used merchandise, electronics, and appliances. Total household demand in
this category is about $25 million; however, demand in this category also includes large
proportions of business-to-business sales.
ATASCADERO RETAIL SALES

Sales tax data from the State Board of Equalization was used to calculate the retail store
sales by store category for the City of Atascadero. The City provided an audited
record of this data, from which ADE estimated the taxable retail sales.
After adjusting the sales tax data to account for nontaxable item sales, the 2007 retail
sales by businesses in the City of Atascadero totaled approximately $338 million.
Atascadero’s retail sales are dominated by food stores, building materials/home
improvement, and automotive businesses. Each of these categories generate over $80
million in annual sales, and together make up 81 percent of the total retail sales in
Atascadero.
Findings for retail sales by major store group are summarized below.
Food Store and Eating Place Group
Atascadero has a total of 79 establishments in this group, 67 of which are restaurants
and food service establishments. The overall sales in this category total $89 million.
The majority of these sales come from grocery stores, with $52 million in estimated
sales.2 Restaurants and other food services account for another $34 million in sales.
2
The sales total includes an estimate for nontaxable item sales such as groceries and prescription drugs.

Building Materials and Home Furnishings Group
Atascadero has a total of 46 establishments in the building materials and home
furnishings group. Together, these businesses generate about $83 million in annual
sales. The vast majority of this total ($68 million) comes from home improvement
stores such as building materials dealers, hardware stores, and home centers.
Automotive Group
Automotive group retailers generate approximately $101 million in annual sales. This
category has a total of 43 establishments in Atascadero. Gasoline service stations
account for more than half of the sales in this category, with more than $57 million in
sales in 2007. Atascadero also generates sales from automobile dealerships that are
relatively small compared to the household demand.
Other Retail Groups
Atascadero has a total of seven general merchandise stores. These stores include K-
Mart, three drug stores, and other general merchandise stores that include variety
stores. Together, these stores generate a total of $36 million in sales.
Specialty retail stores in Atascadero generate about $25 million in annual sales.
Atascadero has a total of 78 establishments in this retail group. Major specialty retail
store categories represented in Atascadero include gift stores ($2 million), sporting
goods stores ($3 million), books/stationery ($2 million), office supplies/computers ($8
million), jewelry ($2 million), and miscellaneous specialty retail ($8 million).
Apparel stores constitute the smallest retail store group in Atascadero with 12
establishments and less than $4 million in annual sales.
RETAIL LEAKAGE
Retail leakage represents the mismatch between local market spending and the retail
sales by Atascadero retail establishments. Leakage indicates both an existing
shortcoming in terms of local retailers not meeting existing household demand, as well
as an opportunity because unmet retail demand can create potential for new stores as
well as sales expansions for existing stores. Conversely, those store categories with net
capture of regional sales extend their market reach into the surrounding region.
Overall, Atascadero’s retail sales total of $338 million exceeds the local consumer
spending total of $232 million. The sales leakage trend identified in the analysis shows
a mixed trend as Atascadero is a net regional retail provider in specific retail store
categories, but also generates significant retail leakage in other major store categories.
The retail store categories where the sales exceed the local market spending attract a
total net capture of $185 million in regional sales, while the retail store categories
where sales fall short of local household spending generate a total of $79 million in
retail leakage (See Figure 5).

FIGURE 5
SALES LEAKAGES ($ MILLIONS)
Automotive Group $21.9
Building Materials & Home Furnishings Group $7.1
Food, Eating, & Drinking Group $13.3
Specialty Retail Group $6.1
General Merchandise Group $22.8
Apparel Store Group $7.9
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0
Source: ADE, Inc.
In general, Atascadero is a regional provider for food-related retail stores, home

improvement stores, and gasoline stations. These retail groups generate sales that far
exceed the local market spending, and reflect specific market conditions that benefit
Atascadero. Concurrently, Atascadero generates a net retail leakage of local spending
in general merchandise stores and apparel stores.
Findings by retail group are summarized below.

Apparel Stores
Based on data from the retail model, sales data, and household survey data, ADE
estimates that the apparel stores in Atascadero capture approximately $2 million in
spending from Atascadero residents. This results in a net capture of $1.7 million in
retail spending from outside of Atascadero, and a leakage of nearly $8 million of
spending by Atascadero residents that leaves the city. With the high concentration of
apparel stores in Paso Robles and San Luis Obispo, this trend will likely continue
without a significant upgrade in the local offerings by Atascadero retailers.
General Merchandise Group
Stores in the general merchandise category show more of a mixed trend, with an
overall net leakage of local spending. Atascadero residents account for $19 million of
the $36 million in total general merchandise store sales. This means that Atascadero
stores in this category are capturing $16.6 million from non-Atascadero residents but
losing nearly $23 million in retail leakage to other communities. The net capture
largely comes from drug stores, which retains a high proportion of local household

spending. The leakage comes from the limited number of other general merchandise
stores in Atascadero, spending that currently leaves Atascadero for discount stores in
other communities, and the total absence of specific store types such as department
stores and warehouse clubs.
The retail leakage in this category is significant, but recapturing these sales for
Atascadero in some cases may require more market support than is available locally.
For example, warehouse clubs typically require a population base of 100,000 or more.
Similarly, modern department stores seldom locate in a stand-alone site, but require an
entire regional shopping center with several anchors together. Such developments have
occurred in Paso Robles but it is not clear that sufficient market support exists in
North County for another regional mall. However, other kinds of general
merchandise stores, such as big box discount centers, tend to have more independent
location criteria and could be supported in Atascadero. Moreover, a recent study
completed by Buxton Group for Atascadero indicates that there is general merchandise
leakage throughout the North County, so this appears to be a viable market
opportunity for Atascadero.
Specialty Retail Group
Atascadero has an overall net capture of retail spending in specialty retail stores, with
Atascadero stores capturing more than $9 million of the nearly $16 million in total
household spending in this category. With more than $25 million in sales, this means
that retail stores in Atascadero capture more than $16 million from customers other
than Atascadero residents. The retail leakage totals about $6 million.
The store categories that generate a net capture of regional sales include gift stores,
sporting goods stores, office supplies, and miscellaneous specialty retail. Gift stores and
sporting goods stores can capture significant spending from travelers and out-of-town
visitors, while business-to-business transactions are significant customers for office
supply stores. The specialty retail store types with a leakage of retail spending include
florists, book stores, photographic stores, and music stores.
Food, Eating, and Drinking Group
Atascadero has a significant net capture of regional sales in food-related retail stores.
Overall, Atascadero stores in this category retain a very high proportion of local
household spending, with only $13 million of retail leakage compared to $67 million
in total spending. The vast majority of the retail leakage is in restaurants and eating
places, although some of this is offset by fast food sales to travelers through town. The
survey data indicates a higher proportion of local residents who choose to eat outside
of Atascadero. The main source of net retail capture is grocery stores.
Building Materials and Home Furnishings Group
The building materials and home furnishings group generates the largest net capture of
regional sales and represents Atascadero’s most significant concentration of retail

activity. As a whole, stores in this retail group have a net capture of more than $64
million, nearly all of which is due to the high sales from home improvement stores.
Much of this high net capture of regional sales comes from the large amount of
business-to-business sales to contractors, home builders, and other professionals.
Furniture/home furnishings stores generated a retail leakage, while electronics and
appliance stores had a net capture of sales.
Automotive Group
The automotive group generated a net capture of sales. Much of this net capture comes
from the very high concentration of sales in gasoline stations. Gas stations in
Atascadero serve travelers along Highway 101, as well as business-to-business
transactions. Atascadero also generates net capture of retail sales from used car
dealerships, other vehicle dealers, and auto parts stores. The glaring weakness with
auto-related businesses is in new car dealerships, where the local household demand
well exceeds the sales.
KEY RETAIL ISSUES

Atascadero generates a sizable amount of retail trade. The city has specific strengths as
well as numerous weaknesses, but on the whole Atascadero’s retail sector is actually
performing better than the perception among residents of its retail stores. The
following issues address existing shortcomings in Atascadero’s retail sector, the
opportunities for commercial growth as well as competitive challenges that Atascadero
needs to address in order to potentially enhance its retail market position.
The economic data indicates that Atascadero’s retail store sales exceed the total
household consumer spending generated by local households. Yet, the survey data
indicates that local residents do not hold the local shopping opportunities in high
regard, and this is reflected in how they assessed their own shopping habits. The retail
sales trends imply that Atascadero residents shop locally more often than they think.3
The largest source of retail sales revenue is tied to building materials and home
improvement businesses, followed by drug stores and grocery stores. These activities
generate significant revenue, but do not contribute particularly to the perception of
Atascadero as a shopping destination.
The types of retail stores that can shape a community into an upscale shopping
destination are largely absent from Atascadero. The community does not have any
traditional department stores, has a very limited selection of apparel stores, only has K-
Mart as a large-scale general merchandise provider, has many specialty retail categories
with unmet demand, has a limited selection of automobile dealerships, and the
restaurant selection is primarily take out and middle market restaurants.
3
The household survey asked respondents to estimate the percentage of shopping trips that occur within
Atascadero, and the percentage of trips that go elsewhere. The survey did not ask respondents to keep a diary or
otherwise track their spending patterns over time.

The City has the opportunity to stem the sales leakage in general merchandise and
some of the specialty retail categories, as well as possibly auto sales, in the proposed
retail centers at the De Rio/El Camino intersection as well as elsewhere along El
Camino in the northern part of town.
The Downtown represents the other major area of opportunity for retail
development, including fine restaurants, additional specialty retail, and entertainment.
The proposed Colony Square project would respond very well to these kinds of
market opportunities. In addition, efforts to develop additional visitor-serving
business, services, and events Downtown would help to support a moer diverse
business mix.
The significant spending capture for gasoline service stations in Atascadero indicates
that the community serves as a stopover for travelers along Highway 101 and SR 41.
However, there is a need to encourage increased overnight stays in Atascadero, which
would lead to additional visitor spending in a wider range of businesses such as
restaurants and specialty retail stores.
In particular, a strong visitor trade could help bolster the apparel retail sector, which
currently does not meet residents’ needs for higher quality clothing. The problem,
here is that Atascadero does not have sufficient market position to develop upscale
department stores or a traditional regional mall. While it can meet many basic
shopping needs of its residents with additional discount centers, it will be very difficult
for the City to compete with Paso Robles and the City of San Luis Obispo for finer
shopping opportunities. It will need to rely to a large degree on local independent
boutique apparel and specialty retail stores. These stores could concentrate
Downtown, but without a traditional major anchor store, they will be hard pressed to
generate sufficient traffic to be successful. Increased visitor spending could help this
situation but that will require adding attractions in Atascadero to boost the length of
visitor stays in the City.
B. TOURISM
Atascadero has commissioned the preparation of a separate Tourism Marketing Plan
(TMP), which is anticipated to contain extensive analysis and recommendations for a
comprehensive tourism development program. The City’s efforts toward tourism
promotion should be considered a major component of its overall economic
development program. ADE has discussed preliminary elements of the TMP with the
report’s author. This section of the Economic Development Strategic Plan provides a
summary of key issues that ADE anticipates will be important as Atascadero considers
strategies to improve the economic benefit it gains from tourism.
Considering the inventory of attractions for visitors to San Luis Obispo County, and
particularly the North County area, many of these are in other communities or

locations and are not in Atascadero itself. This does not motivate visitors to stay at
lodging facilities in Atascadero.
Atascadero has 3.7 percent of rooms in San Luis Obispo County but only 2 percent of
revenues. It could generate an additional $3 million in annual lodging revenues if it
could achieve a proportional share of revenue. Compared to the County as whole, the
City does have a favorable preponderance of branded lodging facilities and relatively
larger facilities. Both of these characteristics tend to increase the availability and
funding for marketing channels.
However, in order to better support the lodging sector in the City, Atascadero needs
to consider developing more attractions, which may include special events, art and
culture, dining, shopping, etc. The City may also consider supporting the development
of additional physical facilities as attractions such as an equestrian center that would
draw a specific segment of patrons into the City.
Considering Atascadero’s position in the marketplace for tourism, some issues to be

addressed include the following:
Strengths
 Location in the center of the county with good transportation access in all
directions.
 Numerous existing special events
 Substantial tourism promotion infrastructure in place with the Tourism
Promotion Committee, the Chamber of Commerce and the Main Street
organizations
 Historical assets and distinctive architecture
 Proximity to wine country
 Existing lodging facilities provide good value.
Weaknesses
 Limited attractions relegates City to overflow destination
 Downtown suffers from a lack of tourist oriented activities
 Atascadero’s existing brand has not been adequately promoted and has limited
identity in the marketplace
Opportunities
 Continued revitalization of the Downtown area
 Branded niche destination to attract visitors already patronizing other areas of the
County
 Equestrian connection could provide a distinct identity to Atascadero
 Eagle Ranch could provide additional outdoor attractions
Threats
 It is critical for Atascadero to develop a defendable niche position as a viable tourist
destination to address competition from surrounding localities.

 The current and foreseeable economic conditions make it more challenging to
promote the City and make it more imperative to communicate a clear marketing
message.
Based on an assessment of Atascadero’s position and challenges in the market, it

appears that the City can differentiate itself as a destination by promoting its
authenticity based upon its history and local culture. Over time, additional physical
attractions can also be added.
C. JOB PRODUCING INDUSTRIES

THE CURRENT STRUCTURE OF ATASCADERO’S ECONOMY
Atascadero’s economy is comprised of businesses that provide goods and services to
local, regional, and in some cases, international customers. These businesses also
provide employment opportunities and wages for residents who then purchase goods
and services. The greater the share of purchases made locally, by both businesses and
employees, the greater the overall economic benefit to Atascadero.
In 2007, 835 employment establishments were located in Atascadero. These

establishments employed 8,822 workers and had an annual payroll of $293.3 million.
(See Table 3, below)
TABLE 3
ATASCADERO ESTABLISHMENTS, EMPLOYMENT, PAYROLL, AND WAGES, 2007
Establishments Employees Annual Payroll Average Wage
Agriculture and Mining 9 65 $2,078,252 $31,973
Construction 163 877 $36,005,204 $41,055
Manufacturing, Wholesale Trade, Transport. 57 440 $16,050,940 $36,479
Retail Trade 103 1,352 $34,464,260 $25,491
Information 10 109 $3,803,064 $34,890
Finance and Real Estate 69 384 $14,789,920 $38,515
Management/Professional/Administrative 131 769 $126,486,797 $164,482
Health, Education & Social Services 199 3,411 $39,460,048 $11,568
Arts Entertainment and Recreation 10 371 $4,587,468 $12,365
Accommodation and Food Services 52 848 $10,787,452 $12,721
Personal Services 33 196 $4,862,048 $24,806
TOTAL 835 8,822 $293,375,453 $33,255
Source: ADE, Inc., based on data provided by CA Employment Development Department.
Agriculture and Mining

Agriculture and mining comprise just 1 percent of total establishments and less than 1
percent of total employment and payroll. These establishments consist of
manufacturing, support services and suppliers of agriculture and mining businesses
including food and beverage processors, veterinarians, metal fabricators and other
suppliers.

Construction
The second-largest category of employers consisted of 163 firms engaged in
construction activities, including construction of buildings, public works, and specialty
trade contractors. This sector employs 877 workers and has a payroll of slightly over
$9.1 million. Included in this sector are 100 specialty trade contractors that employ
over 500 workers and have a payroll of $36.0 million.
Manufacturing, Wholesale Trade and Transportation
The manufacturing, wholesale trade and transportation sectors were combined for this
analysis because they tend to require similar locations and site amenities. Together,
these sectors include 57 establishments that employ 440 workers and have a payroll of
over $16.0 million. Three of the manufacturers’ process food and beverages, 9 are
manufacturers of metal products and machinery and 5 provide printing services.
Retail Trade
The retail trade sector consists of 103 establishments, such as food, drug and hardware
stores, thrift shops, gas stations and car dealerships. As noted in the retail analysis, in
addition to capturing local spending, these stores also capture a large amount of
spending by non-residents. This sector employs over 1,300 workers and has a payroll
of $34.4 million. While retail has 15 percent of all local jobs, it accounts for 12 percent
of total payroll. The average wage in the retail sector was $25,500.
Information
The information sector includes firms engaged in publishing, broadcasting, data
processing, motion picture and telecommunications activities. Information has been
one of the fastest growing sectors in the U.S. economy. Within Atascadero, however,
it comprises only 1 percent of employers, total employment, and payroll. The average
wage in this sector is nearly $35,000.
Finance and Real Estate
The finance and real estate sectors primarily serve the local community and include
banks, investment brokerages, insurance carriers, real estate brokers, and leasing
agents. These sectors together comprise 8 percent of all establishments, and between 4
and 5 percent of workers and payroll. About 380 people are employed in about 70
establishments that have a payroll of $14.8 million.
Management, Professional Services, Administrative Support
These sectors tend to provide high paying job opportunities. The management,
professional services, administrative support, and non-profit sectors were combined for
this analysis because they all tend to locate in office buildings with similar amenities.
These sectors together comprise 131 establishments that employ about 770 workers
and have a payroll of $126.5 million. Though these sectors account for less than 10
percent of all jobs in Atascadero, they account for over 43 percent of total payroll. The
average annual wage is about $165,000.

Health, Education and Social Services
The largest category of establishments includes businesses and organizations that
provide health, education, and social services. Nearly 200 or slightly less than one-
fourth of all Atascadero employers were in this category. The Health, Education, and
Social Services sector also had the greatest number of jobs. In 2007, total employment
was slightly over 3,400. Total payroll was $39.5 million and the average annual wage
was slightly less than $12,000.
Arts, Entertainment and Recreation
The economic growth potential of the arts and culture sector has yet to be realized in
Atascadero. As of 2007, only 10 establishments comprised this sector, employing 371
workers. Total payroll was $4.6 million and the average wage was slightly over
$12,000.
Accommodation and Food Services
The accommodation and food services sector was comprised of 52 establishments
employing 848 workers. Total annual payroll was $10.8 million. The relatively low
average annual wage of $12,700 is due to the seasonal nature of tourism. In part due to
its location along Highway 101 and its many interchanges, there are 47 restaurants that
employ over 700 workers.
Personal Services
The personal services sector includes barber shops and beauty salons, day spas, dry
cleaning and other laundry services, appliance and car repair shops and maintenance
services for HVAC, pools and other types of equipment. This sector employed nearly
200 workers in 33 establishments and had a payroll of a little less than $5.0 million.
Average annual wages were nearly $25,000.
THE STRUCTURE OF THE SAN LUIS OBISPO COUNTY ECONOMY

The health and vitality of Atascadero’s economy is linked to that of the broader
regional economy. For this reason, we have analyzed the County’s economic structure
and dynamics.
The purpose of the trends analysis is to see what direction the economy is moving in,
which industries are growing, which are shrinking, and what the relationships between
industries are. Industries have different paths of growth. They respond in different
ways to external forces. They have different markets, different suppliers, different
labor force and space needs. Knowing the composition of your regional economy and
understanding which industries are driving growth or decline, allows critical support
organizations such as cities, chambers and economic development organizations to
better target economic development resources.

SAN LUIS OBISPO ECONOMIC BASE ANALYSIS
Recent County Employment Trends
In 2007, employment in San Luis Obispo (SLO) County totaled 109,100 jobs4. This
represents an increase of 6.8 percent over 2001 employment levels. This is significant
considering that, over the same period, the bordering coastal counties of Santa Barbara
and Monterey only experienced increases of 5.4 percent and 1.6 percent respectively.
During that time, California as a whole only increased by 3.8 percent.
As shown in Table 4 below, over one-fifth of SLO County’s total employment is

attributable to the public sector. This includes institutions such as the California
Polytechnic State University, Atascadero State Hospital and various local
governmental bodies. In fact, eight of the top ten employers in the county fall within
the public sector5. This raises a serious concern not only for the County but for
Atascadero, many of whose residents are employed by government. The recession is
affecting tax revenues at all levels of government and has triggered substantial lay-offs
and work furloughs for many government agencies. This is exacerbated by the State
Budget stalemate that even as of this writing in mid-February remains unresolved. The
loss of employment and income in the government sector will have a major impact on
household spending in Atascadero and will affect retail sales as well as so affect the
City ability to fund services and to pursue economic development activities.
The balance of this analysis will focus on the 86,300 individuals employed in the
private sector. When excluding the public sector, the growth figures for the county
through 2007 were even more impressive. In this case, SLO County’s private sector
employment increased by 8.7 percent versus 5.0 percent and 1.1 percent for the
counties of Santa Barbara and Monterey respectively while California’s private sector
employment grew by only 3.6 percent.
SLO County’s industry mix and growth rates are shown in Table 4 below.
4
California Employment Development Department
5
As reported by the University of California, Santa Barbara, 2008 San Luis Obispo County Economic Outlook. Of
the top 35 employers, 17 were listed as either Public Administration or Public Education.

TABLE 4
SAN LUIS OBISPO COUNTY: EMPLOYMENT, 2001-2007
2001- 2001- 2007 2007
2007 2007 Empl. as a Empl. as a
2001 2007 Empl. Empl. % % of All % of
Industry Sector Title Empl. Empl. Change Change Ind. Private S.
TOTAL, ALL INDUSTRIES 102,200 109,100 6,900 6.8% 100.0% N/A
TOTAL, PRIVATE SECTOR 79,400 86,300 6,900 8.7% 79.1% 100.0%
Total Farm 4,900 4,500 -400 -8.2% 4.1% 5.2%
Natural Resources, Mining and
Construction 6,700 7,600 900 13.4% 7.0% 8.8%
Manufacturing 7,400 6,100 -1,300 -17.6% 5.6% 7.1%
Durable Goods 4,200 3,300 -900 -21.4% 3.0% 3.8%
Machinery Manufacturing 900 800 -100 -11.1% 0.7% 0.9%
Computer and Electronic Product Manuf. 700 200 -500 -71.4% 0.2% 0.2%
Nondurable Goods 3,100 2,800 -300 -9.7% 2.6% 3.2%
Food & Beverage & Tobacco Manuf. 1,100 1,600 500 45.5% 1.5% 1.9%
Trade, Transportation and Utilities 18,800 21,000 2,200 11.7% 19.2% 24.3%
Wholesale Trade 2,500 2,700 200 8.0% 2.5% 3.1%
Retail Trade 13,100 14,200 1,100 8.4% 13.0% 16.5%
Food and Beverage Stores 2,900 3,100 200 6.9% 2.8% 3.6%
General Merchandise Stores 1,500 2,000 500 33.3% 1.8% 2.3%
Transportation, Warehousing and Utilities 3,200 4,100 900 28.1% 3.8% 4.8%
Utilities 1,700 2,400 700 41.2% 2.2% 2.8%
Transportation and Warehousing 1,500 1,700 200 13.3% 1.6% 2.0%
Information 1,800 1,400 -400 -22.2% 1.3% 1.6%
Financial Activities 3,800 4,700 900 23.7% 4.3% 5.4%
Finance and Insurance 2,200 2,500 300 13.6% 2.3% 2.9%
Real Estate and Rental and Leasing 1,600 2,200 600 37.5% 2.0% 2.5%
Professional and Business Services 9,000 9,900 900 10.0% 9.1% 11.5%
Educational and Health Services 9,600 11,100 1,500 15.6% 10.2% 12.9%
Leisure and Hospitality 13,200 15,600 2,400 18.2% 14.3% 18.1%
Arts, Entertainment, and Recreation 1,200 1,500 300 25.0% 1.4% 1.7%
Accommodation and Food Service 12,100 14,100 2,000 16.5% 12.9% 16.3%
Accommodation 2,900 3,700 800 27.6% 3.4% 4.3%
Food Services and Drinking Places 9,200 10,400 1,200 13.0% 9.5% 12.1%
Other Services 4,400 4,400 0 0.0% 4.0% 5.1%
Government 22,800 22,800 0 0.0% 20.9% N/A
Source: ADE, Inc., based on California Employment Development Department
As Table 4 shows, in 2007, the two super-sectors Trade, Transportation and Utilities
and Leisure and Hospitality accounted for 42.4 percent of SLO County’s private sector
economy. Further, the employment gains in these sectors alone accounted for two-
thirds of the county’s total job gains over the period.
The most significant loss to the county’s economy was the reduction in the
Manufacturing sector from 9.3 percent of the total economy in 2001 to 7.1 percent in
2007. This 2.2 percent reduction accounted for the loss of 1,300 jobs with 2006 average
annual wage of $40,805. This is particularly important given that 2006 average annual
wages countywide were $26,634. The one standout among the Manufacturing sector
was Food & Beverage & Tobacco Manufacturing which gained 500 jobs, an increase of
45.5 percent over 2001 employment levels.

CLUSTERS OF OPPORTUNITY
A useful tool for better understanding a region’s economy is through the use of
clusters. Clustering is an analytical tool for understanding a regional economy. It is
also a useful organizing and engagement tool. As an analytical tool, the cluster
methodology allows the analyst and their clients to better understand the structure of
their regional economy, to see the linkages between industries. Further exploration
through either interviews or input-output analysis, or both, allows for an
understanding of the buyer-supplier relationships between industries.
As an organizing and engagement tool, the cluster methodology allows firms within a
cluster to identify their common competitiveness issues, develop a strategic action
plan, and collaborate to jointly resolve those issues. Cluster organizations provide their
member firms a voice in the development of policies and programs related to
workforce development, land use permitting, infrastructure development, research and
technology, and entrepreneurship support services.
This analysis of economic growth opportunities is based on 2006 employment data for
San Luis Obispo County. Together, these clusters employ a total of 36,619 workers,
about 33 percent of total employment in all industries that year.
Figure 6, below illustrates the structure of an industry cluster. Clusters are geographic
concentrations of firms that share common markets, buyers, suppliers, and talent.
Firms within clusters compete with each other in the same markets. Clusters include
not only traded firms (that export their product or service), but also firms that supply
goods and services to these exporters. The role of the public sector is to support the
growth and success of cluster members through investments in education, research and
technology, infrastructure and regulation. For instance, in the food and beverage
cluster, the exporting firms would include the wineries that sell their wines in other
regions or to visitors from other regions. The wineries purchase barrels, stainless steel
tanks, presses, grapes, water, and the expert services of master winemakers, design
engineers, civil engineers, marketing professionals and wine distributors. The public
sector and private utilities provide roadways, internet, water, telephone, talented
workers and new technologies in wine processing and grape cultivation. Each member
plays a crucial role in the success of the whole cluster. The greater the share of local
suppliers, the greater the beneficial impact on the region.

FIGURE 6
STRUCTURE OF INDUSTRY CLUSTERS
Outward
Oriented
Industries
Local Serving Industries
Human Regulatory & Adv. Physical

Technology Resources Capital Quality of Life
Tax Climate Infrastructure
Community Assets
The composition of each cluster, in terms of its member industries as defined by

NAICS6 codes, is based on an analysis of employment growth, employment
concentration as measured by Location Quotient7 (LQ) and an assessment of
opportunities for growth both globally and locally.
Five industry clusters have been identified as economic growth opportunity areas.
They include tourism and hospitality; food and beverage; construction; new media
arts; electronics and alternative energy (see Table 5 below).
6
NAICS, North American Industry Classification System
7
The Location Quotient is a tool for identifying a region’s specialization relative to other regions or nations. It is
used to determine which industries primarily export their goods, thereby generating wealth in the region. LQ is a
measure of an industry’s employment concentration. It is the ratio of a region’s employment in an industry (for
instance wine processing) as a share of total employment in that region (in this case, San Luis Obispo County)
divided by the ratio of the larger region’s employment in that industry (e.g. wine processing) as a share of total
employment in that larger region (in this case, California). An LQ greater than 1 indicates that the study region
(e.g. San Luis Obispo) more than meets the local need for that good or service and must be exporting excess goods
or services outside the region.

TABLE 5
SAN LUIS OBISPO COUNTY CLUSTERS OF OPPORTUNITY
2006 Employment
Tourism and Hospitality 16,410
Food and Beverage 6,167
Construction 6,055
New Media Arts 2,948
Electronics 2,727
Alternative Energy 2,312
All Clusters 36,619
Source: ADE, Inc., based on data from IMPLAN
Tourism and Hospitality

The tourism and hospitality cluster consists of lodging, restaurants, entertainment and
recreation, sporting goods stores, and companies that arrange transportation services
(see Table 6). Of all the opportunity areas, it is the largest, employing over 16,000
workers. The current economic recession, which began in the fourth quarter of 2008,
will have a significant impact on this sector globally and will affect the broader San
Luis Obispo economy until 2010. Latent demand for leisure travel combined with
population growth and new spending will again drive growth in this sector at that
time. The opportunity for Atascadero is to plan now for the renewed growth in
tourism by carefully adding new visitor attractions that will help differentiate the City
as a unique visitor destination.
TABLE 6
COUNTY TOURISM & HOSPITALITY
Industries 2006 Employment LQ
Food Services & Drinking Places 10,275 1.48
Accommodation 3312 2.49
Amusement, Gambling & Recreation Industries 1215 1.12
Sporting Goods, Hobby, Book & Music Stores 1293 2.33
Performing Arts, Spectator Sports & Related Industries 190 0.46
Support Activities for Transportation 125 0.24
Source: ADE, Inc., IMPLAN
Food and Beverage

San Luis Obispo’s food and beverage industry employed over 6,000 workers in 2006
(see Table 7). This cluster includes food and beverage processing (mostly wine), farm
machinery manufacturing, metal tanks (for fermenting and storing wine) ranching,
vineyard and other farm employment and farm management services. The wine
industry has a significant economic impact on the region’s economy. Over the next
few years, growers will be planting more acreage in grapes to meet anticipated growth
in demand worldwide. After that, the demand for additional processing capacity will
increase. The opportunity for Atascadero is to make suitable sites available for wine
processors, metal tank fabricators, offices for wine distributors and marketers and

other management services.
TABLE 7
COUNTY FOOD AND BEVERAGE
Crop Production 1935 1.72
Animal Production 211 1.11
Support Activities for Agriculture and Forestry 2151 1.89
Farm Management Services 347 5.11
Farm Machinery 25 1.38
Food Manufacturing 401 0.41
Other Fabricated Metal 215 1.87
Metal Tanks 58 5.11
Beverage Product Manufacturing 1171 4.26
Wineries 1169 7.08
Construction
The construction cluster, the third largest in San Luis Obispo County, includes
architects, engineers, construction companies, specialty contractors, waste
management services, mining and construction material manufacturers (see Table 8).
This cluster employs over 6,000 workers. This industry has been hit hard by the 2008-
2009 recession, but could be revived by the economic stimulus package implemented
by the federal government during 2009. Population will continue to grow and require
the services and products of this industry over the long term, but for the next few
years, growth will be flat or negative. In Atascadero, the construction industry
employs 877 workers in 163 establishments. The average annual wage is relatively
high, at $41,000. The opportunity for Atascadero is to continue to offer competitively-
priced space for architects, engineers, and specialty contractors.
TABLE 8
COUNTY CONSTRUCTION
Architects 347 1.77
Engineering 745 1.04
Furniture & Related Product Mfg. 237 0.63
Waste Management & Remediation 387 1.52
Heavy & Civil Engineering Construction 733 1.22
Construction of Buildings 3312 2.49
Mining (except Oil and Gas) 106 2.48
Non-Metallic Mineral Product Mfg. 188 0.61
New Media Arts (Emerging)

The emerging new media arts cluster includes firms involved in audio and video
equipment manufacturing, motion picture and sound recording, publishing, software,
telecommunications, computer system design and data processing. Countywide, this

cluster employs almost 3,000 workers (Table 9). Within Atascadero, one component of
this cluster, the information sector, employs 109 workers in 10 companies. This cluster
has grown rapidly at the national and international level. Atascadero is particularly
well-suited to capture its share of growth in this largely location-independent industry.
It is relatively close to Los Angeles, an historic hub of creativity, offers a high quality
of life with abundant recreation opportunities, has relatively easy access to graduates of
a top university in San Luis Obispo and offers competitively-priced office space. The
opportunity for Atascadero is to promote those economic strengths that are most
highly desired by this industry through a targeted marketing communications strategy.
In addition, Atascadero should consider supporting the formation of an industry
cluster group that would work jointly with the City, education and technology
services, economic development organizations and others to build the concentration of
firms locally.
TABLE 9
COUNTY NEW MEDIA ARTS
Printing & Related Support Activities 669 1.74
Telecommunications 396 0.55
Publishing Industries 483 0.76
Software Publishing 111 0.32
Data Processing, Hosting & Related Services 133 0.37
Audio & Video Equip. Mfg. 220 3.97
Motion Picture & Sound Recording Industries 352 0.36
Computer System Design 505 0.41
Electronics
The electronics cluster includes companies engaged in the manufacturing of computer
and electronics products, machinery, plastics and rubber and fabricated metal products.
Employment in this cluster overlaps with both the new media arts cluster and the food
and beverage cluster. The key industry drivers of this cluster are miscellaneous
electrical equipment and components manufacturing and audio and video equipment
manufacturing. This cluster employs about 2,700 workers countywide (Table 10). The
opportunity for Atascadero is to promote those economic strengths that are most
highly desired by this industry through a targeted marketing communications strategy.

TABLE 10
COUNTY ELECTRONICS
Computer and Electronic Product Mfg. 396 0.19
Audio & Video Equip. Mfg. 220 3.97
Plastics & Rubber Products Mfg. 253 0.7
Unlaminated Plastic Profile Mfg 63 4.8
Other Plastics 115 0.69
Electrical Equipment, Appliance & Component Mfg 424 2.05
All Other Misc. Electrical Equip & Component Mfg. 386 18.01
Fabricated Metal Product Manufacturing 65 0.71
Machine Shops 239 0.88
Miscellaneous Manufacturing 393 0.68
Machinery Manufacturing 800 1.54
Including Semiconductor Machinery Mfg 118 3.2
Alternative Energy
San Luis Obispo County has existing strengths in power production that could be
leveraged to build a viable alternative energy production sector. In 2006, the cluster
employed 2,300 workers in petroleum refineries, power production plants, and
pipelines (Table 11). It also includes manufacturers and installers of alternative energy
production components. The County has received proposals for major solar energy
production facilities. The opportunity for Atascadero is to promote those economic
strengths that are most highly desired by this industry through a targeted marketing
communications strategy.
TABLE 11
COUNTY ALTERNATIVE ENERGY
2006 Employment LQ
Petroleum and Coal Products Mfg 175 1.8
Petroleum Refineries 166 2.09
Pipeline Transportation 19 1.15
Utilities 2118 5.76
D. SITE DEVELOPMENT
Atascadero is situated at a crossroads between US 101 going north/south and SR 41
linking the San Joaquin Valley with the Coast along an east/west axis. The commercial
and industrial sites in Atascadero are generally located along these two routes. The
City has eight interchanges along US 101 and nearly all of the property on the east side
of the freeway is zoned for the commercial use, as well as several significant properties
on the west side of the freeway. SR 41 passes through Downtown on the east side of
US 101 and then continues as a commercial corridor west of the freeway. This area is
developing a concentration of office buildings, particularly for medical services. The

City’s industrially zoned properties are located along Traffic Way and Sycamore Road,
in proximity to SR 41 as it enters the City from the east.
Commercial Sites
In 2004, the City Council adopted a Prime Commercial site map identifying 11 sites as
vital to the City’s economic health (Figure 7). Eight of these sites are currently
developed and three are vacant. The most significant sites, labeled as #1 and #2 on the
map, are the properties north and south of Del Rio Rd. A major retail center is
proposed for these sites. Such a development would be important to help capture
much of the retail sales leakage the City is currently experiencing, as well as helping to
generate more traffic for the Mission Oaks center on the west side of El Camino Real.
The City has also zoned the properties north of Del Rio and west of El Camino as
commercial. There are 14 parcels in this area, ranging in size from less than half an acre
up to nearly two acres. The entire area is approximately 18 acres. About half the
parcels remain in residential use and about one-fourth are vacant. This area is included
in the City’s Redevelopment Project area, and is zoned Commercial Park (CPK),
which is intended for large lot commercial and light manufacturing uses.
If the Del Rio sites develop as a major retail center, then this area could be an excellent
opportunity for the City to try to recapture some of the regional auto market, as well
as consolidate existing dealers and auto services (auto dealers are allowed as a
conditional use in the CPK zone). While the current industry trend in auto sales is
toward consolidation of dealerships, especially American made cars, Atascadero could
supplement its existing dealerships with high end specialty car sales to cater to the
higher income households in Atascadero and North County. Another side benefit of
providing an alternate location for the existing dealers south of Downtown is to open
up those sites for more intense mixed use development that would help to create more
of a critical mass for downtown business and development.
A secondary option for the northwest quadrant area of Del Rio Road and El Camino
is a business park or light industrial development consistent with the existing zoning.
The public input during this process has indicated that the City is interested in
attracting technology firms, including those in the environmental and information
sectors. There are very few large sites for this sort of development although scattered
development opportunities exist in other commercially zoned areas. In addition, the
retail market analysis included in this study indicates that, with the possible exception
of an auto center, the City does not need a major new retail location in addition to the
Del Rio sites. Therefore, a business park/light industrial use would respond both to
the interest of the City in developing more jobs and to the need to consolidate retail
centers in the City into fewer nodes.

Industrial Sites
The City’s industrial sites are located away from the freeway in the eastern portion of
the City along the railroad track and near the entrance of SR 41 into the City from the
east. Portions of the industrial zoned properties along the railroad at the north end of
Traffic Way are very narrow and the lots are only 2,500 sq.ft. Further south, the lots
increase in size to as much as 20,000 sq.ft., but their depth is only 100 ft.
Area 4 includes four parcels with an estimated total area of about 11.5 acres. This site
has access on both Traffic Way and Via Road. Via Road has a small one-way bridge
over Atascadero Creek which provides access to SR 41 via Ensenada Avenue and
Mercedes Avenue. If assembled into a single development, this area could support as
many as 250 to 300 industrial jobs. The parcels could also be developed individually,
but the key infrastructure costs would be an improved bridge on Via Road and
possibly a signalized intersection at Mercedes Avenue and SR 41 to permit safer truck
turning movements.
Both the northwest and southeast ends of the industrial parcels along Sycamore
Avenue are developed and much of the central portion is planned to support the
expansion of the Water District facilities. The proximity of these sites to the Salinas
River also limits their potential.
Eagle Ranch
This large site is proposed for annexation to the City. Early project concepts advanced
by the property owners focus on single family residential development, although some
non-residential development is under consideration as well. The property includes
freeway frontage and access to the interchange at Santa Barbara Avenue. As such, it
should be included in the City’s economic development program.
Given the topography of the site, the best economic development use, in conjunction
with the planned residential, would be visitor serving lodging and attractions. The site
could possibly support lodging near the freeway interchange, but could certainly
support a resort style lodging facility in the interior of the property, as well as RV and
camping facilities. Local residents have raised the possibility of developing an
equestrian center in Atascadero to host a variety of equestrian competitions and events
that circulate through the western United States. The Eagle Ranch property would be
an ideal location for such a facility and this would help support not only the onsite
lodging but also other attractions, restaurants and visitor services in the City.
An alternate idea would be to locate a business park development along the freeway
frontage. Based on the limited visual access we were able to gain for this study, it is not
clear how large a facility could be developed in this portion of the site. However, it
may possibly be a location for additional job development if the City chooses that as a
priority for its economic devotement program.

FIGURE 7
ADOPTED PRIME COMMERCIAL SITES
Source: ADE, Inc.
E. SWOT ANALYSIS
ATASCADERO STRENGTHS, WEAKNESSES, OPPORTUNITIES, & THREATS
An analysis of a community’s economic strengths, weaknesses, opportunities and
threats (SWOT) helps identify issues of critical importance to its current and future
economic vitality. Goals and implementation plans are developed to build on strengths
and opportunities and ameliorate weaknesses and threats. This SWOT analysis
summarizes information gathered through quantitative analysis and through a
thorough public outreach program consisting of a household survey, interviews with
business and community leaders, focus group meetings and a public forum. Definitions
for each element of the SWOT analysis are given below:
 Strengths: Strengths are assets, tangible or intangible, that contribute to economic
competitiveness and high quality of life.

 Weaknesses: Weaknesses are tangible or intangible factors that work against the
achievement of quality of life and economic vitality.
 Opportunities: An economic opportunity is a trend external to the community
that could enable Atascadero to leverage its existing economic and quality of life
assets to achieve its goals.
 Threats: Threats are circumstances or trends external to the community that could
prevent the realization of goals.
STRENGTHS
Location
One of Atascadero’s greatest assets is its location. Situated about half-way between San
Francisco and Los Angeles on Highway 101, residents and businesses are within 3
hours drive of the two largest metropolitan areas of the state as well as to the Central
Valley and Yosemite National Park via Highway 41. Its central location between San
Luis Obispo to the south and Paso Robles to the north allows easy access to customers
and services throughout the county. This central location facilitates recruitment of
workers by increasing access to a broader labor market; it also expands the business
market area. As for tourism marketing, its central location within the county provides
easy access to all the county’s tourism attractions and amenities. Location at the
intersection of Highways 101 and 41 would provide an advantage in capturing
spending by Central Valley visitors traveling to the cooler central coast.
Amenities and Attractions
Atascadero’s location is not only advantageous for business it also provides a range of
amenities and activities that are attractive to new residents as well as tourists. Located
about 20 miles inland from the Central Coast beach town of Morro Bay, the mild,
Mediterranean climate and the oak-studded hillsides provide both beautiful views and
year-round opportunities for outdoor activities. Recently, the ranch lands of San Luis
Obispo County have been planted in wine grapes and the area has become a significant
wine-growing region and a popular attraction for tourists. The list of unique
attractions include wineries, an accredited zoo, a lavender farm, golf courses, art
galleries, a skate park and a BMX track.
Freeway Interchanges
Atascadero’s visitor services, such as fast-food restaurants and lodging, have capitalized
on its 8 freeway interchanges along Highway 101. Local drug, grocery, and hardware
stores also benefit by easy access from rest of the region.
Historic Colony Plan and Structures
Atascadero was developed by E.G. Lewis in the early 1900s who designed the entire
Colony of Atascadero, including 26 square miles of land. Before his development
company went bankrupt, he was able to build several roads, subdivide most of the

property, and build stately public buildings in the town center. Some of those building
are still standing but are not being used because of earthquake damage. The layout and
structures add a unique charm to the town center. The refurbished Carlton Hotel has
improved the image of the downtown core and adds to the town’s interest.
High Household Incomes
A high percentage of Atascadero residents are employed by government institutions
which provide higher than average compensation. The UCSB forecast indicates that
the median family income in Atascadero is higher than the county median. Higher
household incomes could support a vibrant retail sector, but the community is faced
with competitive challenges from other communities.
Redevelopment Agency and Project Areas
The City’s Redevelopment Project Area includes large portions of the City’s
commercial districts, ranging from Santa Cruz Road in the north along El Camino
Real to Palomar Avenue in the south. It also includes the industrial properties along
Traffic Way and extends out Morro Road to Curbaril. In 2004, the agency issued $12.5
million in bonds.
Available Space for Expansion of Retail and Professional Services
Atascadero has enough sites available for retail and professional office development.
Prime sites for development in the near term include parcels at the intersection of Del
Rio and El Camino Real, as well as further north on the west side of El Camino. In
addition, the Dove Creek site currently is proposed for a commercial development.
The Morro Road area and the Downtown can support additional professional office
development.
Water Supply
The Atascadero Mutual Water Company has started a process of increasing the Town’s
water supply.
Engaged Citizenry
Atascadero has a well-informed and active citizenry that has helped to produce a whole
range of community plans. These include the General Plan, the Downtown
Revitalization Plan, an economic strategy and Redevelopment Project Plan, a Tourism
Strategy and others.
WEAKNESSES
Lack of Common Vision for Development
Despite the significant investment of time and money into the development of various
plans, many residents believe these plans are not being implemented. The perception
among some residents and businesses is that the City lacks both a common vision and
effective leadership. As a result, some businesses have been reluctant to invest in

Atascadero, claiming that building and planning approvals are difficult to obtain. This
has resulted in Atascadero losing commercial development to Paso Robles and
Templeton.
High Share of Government Workers
A significant share of employed residents work for large government institutions,
including the State Hospital, the prison, local government, school districts, and Cal
Poly. These institutions offer relatively good wages and benefits. As a result, the
private sector has a hard time recruiting workers because it cannot match government
compensation packages. There is a concern that government workers who may have
never worked in small business may lack an understanding of what it takes to keep a
business going.
Under-utilized Downtown
The central business district is located on the east side of El Camino Real between
Traffic Way and E. Mall. This area contains a wide range of shops including art
galleries, hardware stores, restaurants, thrift shops, gift shops, and offices for realtors,
printers, dentists and other professionals. Other than Downtown, Atascadero’s
commercial district is essentially a series of strip malls along the El Camino Real
corridor. This detracts from the City’s ability to establish a substantial retail
concentration Downtown. The Downtown should support a mix of uses, with higher
building intensities where possible.
Declining School Enrollment
The Atascadero school districts enrollment has been declining over recent years,
resulting in less funding to schools.
Difficulty Recruiting Workers, Especially Young “Creatives.”
Young, recent college graduates are attracted to areas that offer the greatest
opportunities to meet other young people, advance their careers and indulge in their
favorite pastimes. While Atascadero’s proximity to Cal Poly San Luis Obispo is an
advantage in terms of recruiting recent graduates, it lacks the amenities that young
people look for, including theatres, night clubs, and cafes.
Atascadero Too Large to Maintain
Atascadero has 140 lane miles of roadway to maintain, but not the revenues to do so.
Constrained Supply of Sites for Office and Industrial Park Development
The City’s inventory of business sites generally represents a constraint to non-retail
business development. The City has few flat parcels of substantial size to support
major new employers. Compared to industrial parks available in Paso Robles or
Templeton, it is unlikely the City can compete effectively for major industrial uses.
Though existing sites may be well-suited for small and medium sized firms, should

these firms succeed and require room for expansion, they will likely leave Atascadero
for neighboring cities where appropriate space exists.
Limited Air Services
Growing businesses need to expand their markets domestically and internationally,
requiring air travel. Recently, airlines have been cutting services to smaller, regional
airports, such as the one in San Luis Obispo.
OPPORTUNITIES
Growth of Location Independent Businesses due to Internet
The nearly ubiquitous availability of internet service, including wireless, has made it
possible for work to be located almost anywhere. More and more, workers can choose
where they want to live irrespective of their place of work. This presents an
opportunity for Atascadero as its attractive neighborhoods and proximity to the
ocean, wineries, and other attractions provides a high quality of life not available in
other areas. Atascadero’s opportunity is to leverage its quality of life to attract
location-independent professionals. There are a few industries that have a large share of
remote workers. These include media, publishing, marketing, and others.
Wine Processing and Tourism
The growing popularity of wine within the United States and worldwide has created a
large demand for land suitable for wine grapes. The wine industry has a significant
economic impact on the entire County. As the local industry grows, it will have an
increasing impact in terms of tourism and growth in associated wine making and grape
growing suppliers. Atascadero’s opportunity is to leverage its proximity to the wine
industry by further developing its agri-tourism attractions, lodging and activities.
Arts Colony
The beauty of the natural environment has attracted many artists to the community.
Lately, a few galleries have opened downtown. Promoting these artists and attracting
additional artist to the area could stimulate the renewal of the downtown core.
Increasing Retirees
In 2006, the first of the baby-boom generation (those born between 1946- 1964) turned
60 beginning a two decade long bubble of retirees. Atascadero’s attractive
neighborhoods and quiet lifestyle have already attracted many retirees. The
opportunity is to connect these new retirees to growing businesses so as to ease the
hardships in recruiting.
Growing San Joaquin Valley Population
The Central California Coast is a popular vacation destination and will continue to be
in the future. The San Joaquin Valley’s population is estimated to grow by another 5.4
million people over the next 4 decades. According to the Department of Finance, the

Valley’s population should reach 9.4 million by 2050. Atascadero’s opportunity is to
leverage its existing tourism assets and develop others in order to capture a larger share
of visitors to San Luis Obispo County.
Rise in Oil Prices and Growth of Green Businesses
Atascadero has a few businesses that install solar systems in commercial buildings and
residences. The rise in oil prices could make their services more in demand. The
proposals for major solar energy facilities east of Atascadero could lead to related
business opportunities. In addition, the increasing cost of gas could induce shoppers to
buy local.
Eagle Ranch
This proposed annexation area contains about 3,450 acres, and has the potential to
support a visitor attraction, lodging, and possibly a small business park in addition to
residential development. The property includes freeway frontage and access to the
interchange at Santa Barbara Avenue. Given the topography of the site, the best
economic development use, in conjunction with the planned residential, would be
visitor serving lodging and attractions. The site could possibly support lodging near
the freeway interchange, but could certainly support a resort style lodging facility in
the interior of the property, as well as RV and camping facilities. Local residents have
raised the possibility of developing an equestrian center in Atascadero to host a variety
of equestrian competitions and events that circulate through the western United States.
The Eagle Ranch property would be an ideal location for such a facility and this would
help support not only the onsite lodging but also other attractions, restaurants and
visitor services in the City.
Redevelopment of Underutilized Commercial and Industrial Sites
The City’s Redevelopment Project area includes most of the City’s commercial and
industrial areas.
THREATS
Successful Downtowns in Paso Robles, Templeton and San Luis Obispo.
Paso Robles has aggressively redeveloped and enlarged its downtown. With new
restaurants, theatres and shops, it is now the place of choice for an evening out and for
shopping. Paso Robles has also added new luxury hotels to its downtown, reducing the
possible overflow that would otherwise have gone to Atascadero hotels. The
unincorporated area of Templeton has successfully developed an inviting downtown
with a western theme. The town offers a variety of restaurants and shops. Most
recently, the Trader Joes located in Templeton at the Highway 101 interchange.

Office Parks in Paso Robles Recruiting Atascadero Businesses
Paso Robles office park developers and brokers have been successful in recruiting
Atascadero businesses to their projects.
Tax-Free Internet Sales
Atascadero shoppers make some purchases via the internet and some percent make a
significant share of their purchases via the internet. This means lost revenue to
Atascadero. Without a way to tax internet sales, Atascadero is losing out on needed
sales tax.
Declining Tax Revenues
The current economic downturn is affecting both property taxes and sales taxes for the
City, similar to most jurisdictions throughout the state. The City has budgeted
reserves to help in such times, but over the longer term, the large transportation
infrastructure maintained by the City will require ever increasing revenues.
Graying of the Population
The in-migration of semi-retired or retirees from urban areas is an opportunity and a
threat. The threat is that these new residents will want things to “stay the same.” They
have seen a lot of changes over the course of five or six decades and want stability.
Increasing Fuel Costs
The increasing cost of gas and jet fuel will make it more expensive for families to go on
vacation, further limiting Atascadero’s opportunity for growth in tourism.
Cut backs by Airlines
Airlines are cutting back on the number of flights in and out of smaller airports. SLO
airport could lose a significant amount of service. This will affect business location
decisions for businesses dependent on airline service.

TABLE 12
SUMMARY OF STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS (SWOT)
Strengths Weaknesses
Quality job opportunities Quality job opportunities
 Proximity to San Luis Obispo  High-compensation government jobs
 Community openness to clean industrial makes it difficult for private sector to
growth recruit workers
 Availability of water – AMW  Limited availability of suitable sites for
non-retail business growth
Retail & Services
 Local hardware, drug and grocery stores Retail & Services
capture local and regional spending  Residents mostly dissatisfied with local
 Most personal services spending captured shopping selection and quality
by local businesses  Past delays in implementing downtown
 Increasing household incomes revitalization
 Available space for community retail  Lack of investment in upgrading
businesses downtown properties results in sub-
optimal use of existing sites
Tourism  Abundance of strip commercial along El
 Central Coast location at intersection of Camino Real thwarts attempts to
Highways 101 & 41 concentrate activity in downtown core.
 Numerous amenities and attractions  Other communities, including Templeton,
 Historic Colony Plan and structures have captured most health and
 Proximity to the wineries and vineyards professional services businesses.
Quality of Life & Fiscal Health Tourism

 Established Redevelopment Agency  Lack of niche position relative to tourism;
 Attractive residential setting lack of clear message and communications
strategy
 Atascadero does not have enough
attractions to bring in tourists, so it is
mostly an overflow destination providing
affordable lodging visitors to other parts of
region.
Quality of Life & Fiscal Health

 Difficulty maintaining city infrastructure
 Declining school enrollment and funding

TABLE 12 (CONTINUED)
SUMMARY OF STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS (SWOT)
Opportunities Threats
Quality job opportunities Quality job opportunities
 The growing number of location-  Neighboring business parks have larger
independent businesses facilitated by available spaces and are recruiting
nearly-ubiquitous access to the internet Atascadero businesses
 The increasing number of retired residents  Airlines are cutting back on the number of
could provide necessary expertise for airports served, affecting mostly small,
growing companies regional airports.
 Decreasing supply of oil could spur growth
of clean energy business
Retail
 Successfully re-developed downtowns and
Retail
regional shopping centers of neighboring
 On-going downtown redevelopment
communities attract Atascadero shoppers
 Distinct architectural character
 Preponderance of residents work outside of
 Atascadero Creek is attractive amenity
Atascadero and shop where they work
 Room for increased capture of spending on
apparel, home furnishings, general
merchandise, entertainment and fine
Tourism
dining.
 Growing transportation costs (affecting
tourism)
Tourism
 Leveraging proximity to popular wine and
agriculture tourism attractions
 Without commercial and industrial
 Leveraging growing interest and strengths
development, greater burden of providing
in arts
education and public services falls on
 Leveraging the growing popularity of
residents.
equestrian activities by constructing
 Growing share of sales via the internet
equestrian facilities that would attract more
means loss of locally-generated sales tax.
visitors
 Targeting tourism marketing to the fast-
growing San Joaquin Valley population
 Eagle Ranch could be well-suited for resort-
type development and/or an equestrian
center

 Redevelopment and better use of existing
commercial and industrial sites could
generate badly needed income for
education and other public services


IV. ECONOMIC DEVELOPMENT GOALS
DOWNTOWN
Atascadero’s downtown is a lively place for business, entertainment, arts, and public
gatherings.
Atascadero facilitates the transition of the downtown into a synergistic entertainment,

cultural, and specialty shopping area.
OBJECTIVES:
 Colony Square successfully connects the Sunken Gardens, Stadium Park and
Colony Way to create a vibrant commercial core.
 The development in Downtown includes features to support the City’s Tourism

Marketing Plan in terms of creating venues for art showings, events such as the Art
Walk, fine restaurants, and entertainment venues to attract tourists as well as local
residents.
 New development in Downtown features mixed-use to increase the intensity of

activity.
RETAIL
Atascadero provides a broad range of retail stores so that residents and visitors can
meet most of their shopping needs locally.
OBJECTIVES:
 Encourage a broad range of retailers to locate within the city.
 Support development of major commercial centers at the Del Rio Road
interchange.
 Re-capture at least 50 percent of retail leakage within five years, 75 percent of retail
leakage within 10 years.
 Concentrate retail at major nodes along El Camino Real.

 Re-develop selected strip malls into R & D industrial space, Class A office space,
high density residential or a mix of these uses.
 Create a transit line for El Camino. For long term, consider a Curitiba-like fixed
route bus system for El Camino, connecting nodes with each other and downtown.
 Seek to concentrate commercial retail and office capacity in downtown core.

TOURISM
Atascadero is the gateway and hub for visitors to the Central Coast, providing lodging,
recreation, entertainment, and unique shopping and cultural opportunities.
OBJECTIVES:
 Leverage its central location and access to San Francisco, Los Angeles, and Fresno
to enhance its tourism industry.
 Increase the number of venues for performing arts and other cultural events,
including Stadium Park if resources are available to improve it. Increase the
number of special events that attract visitors.
 Explore the feasibility of developing Eagle Ranch into a venue for attracting
business and leisure visitors.
 Enhance existing attractions to accommodate larger events and more business and
leisure travelers. These include the golf course, the zoo, and the parks.
 Ensure that new commercial development includes space for restaurants wherever
appropriate, especially in the Downtown.
 Advocate for improvements to Highways 41 from Fresno and 46 from Bakersfield.

 Explore and if feasible develop equestrian event center (see Sycamore Trails Stables,
San Juan Capistrano).
JOBS
Atascadero supports innovative businesses, particularly those in emerging
environmental and information technology fields
OBJECTIVES
 Focus business attraction and development on existing available sites, using
redevelopment authority/resources where possible to help remove development
barriers.
 Support growth of economic opportunity areas, including alternative energy,

graphics, new media, food and beverage, electronics etc.
 Increase market area for local businesses by advocating for safety improvements
along Highways 41 and 46 to Central Valley.
 Support installation/enhancement of Wi-Fi, broadband infrastructure.

QUALITY OF LIFE
Atascadero is an inviting community to work, shop, and play.
OBJECTIVES
 Maintain the City’s rural feel through good planning.
 Explore the feasibility of equestrian-focused residential development.
 Genuine civil discourse is displayed throughout the community.
WORKFORCE
Atascadero is a center for workforce education and training.
OBJECTIVES
 Leverage existing assets to promote seminars and specialized education.
 Work toward establishment of a center for specialized training.


V.ACTION PLAN
The Action Plan will be developed upon approval of goals and objectives. The
Marketing Strategy by The Placemaking Group will be a part of the Action Plan.


VI. APPENDIX A: FISCAL IMPACT
METHODOLOGY
CITY BUDGET
The fiscal analysis is designed to relate ongoing operational costs and revenues for the
City of Atascadero to existing land uses in the City. It is based on the Fiscal Year 2008-
09 General Fund. The General Fund contains regular tax revenues that the City
receives, such as property taxes and sales taxes, and provides appropriations for most
public services provided by the City. The City has a number of other budget funds
that include specially earmarked revenues used to pay for specific services or capital
projects. Among these are the gas tax fund for street maintenance, development impact
fee funds for capital improvements, enterprise funds for wastewater and transit
services, and a variety of assessment district funds. While there is some transfer of
revenue between the General Fund and these other funds, the non-General funds are
supported largely by user fees and assessments and are not dependent on general tax
revenues. The City has less ability to increase general tax revenues and must pay for
municipal services such as police and fire protection from its General Fund. For the
purposes of the fiscal background analysis for the Economic Development Strategy,
we have limited the analysis to the General Fund.
The budget figures for the FY 2008-09 General Fund are shown in the left hand
column of Table A-1. Since the analysis is concerned with portraying the ongoing
fiscal effects of existing land uses, we have made certain adjustments to the budget
figures, as shown in the middle column of the table. These adjustments include the
one-time building permit and plan check fees, among other charges, that are paid by
new development during the entitlement process, but generally are not paid on an
annual basis after development is complete. The City has the authority to set these
development fees at an appropriate level to cover the cost of City staff, primarily in
the Community Development Department, to provide services during the entitlement
process. Therefore, there should not be adverse fiscal impacts for these activities. These
fees have been adjusted out of the appropriate revenue categories and also deducted
from the expenditures for the Community Development Department. Specifically the
fees are as follows:

Licenses and Permits
Construction Permits $579,290

General Plan Maintenance Permits $ 14,390
Grading and Drainage Permits $ 46,290
Encroachment Permits $ 40,930
Tree Application Fees $ 24,920
Other Developer Reimbursements $ 30,000
Total $735,820
Charges for Service
Development $918,870
Other Revenue
State Mandated Cost $ 30,100
TABLE A-1
ATASCADERO CITY BUDGET FISCAL YEAR 2008 - 09
NET BASIS FOR
FISCAL
BUDGET CATEGORY BUDGET AMOUNT ADJUSTMENTS ANALYSIS
REVENUES
Property Taxes $8,023,260 $8,023,260
Sales Tax $4,254,200 $4,254,200
Transient Occupancy Tax $696,090 $696,090
Franchise Taxes $918,700 $918,700
Property Transfer Tax $151,910 $151,910
Business License $182,800 $182,800
Licenses & Permits $735,820 $735,820 $0
Motor Vehicle in lieu $195,160 $195,160
Revenue from Money and Property $296,530 $296,530
Fines and Forfeitures $137,000 $137,000
Charges for Service $2,781,610 $918,870 $1,862,740
Other revenue $1,585,400 $30,100 $1,555,300
TOTAL REVENUES $19,958,480 $1,684,790 $18,273,690
EXPENDITURES BUDGET ADJUSTMENTS NET BASIS
General Government $3,111,890 $30,100 $3,081,790
Police $5,977,570 $5,977,570
Fire/EMS $4,395,960 $4,395,960
Community Development $1,882,390 $1,654,690 $227,700
Public Works $2,036,480 $2,036,480
Community Services $2,658,990 $2,658,990
Other $300,000 $300,000
TOTAL EXPENDITURES $20,363,280 $1,684,790 $18,678,490
TOTAL NET/(USE OF RESERVES) ($404,800) ($404,800)
Source: ADE, Inc.

REVENUE AND COST ESTIMATES
With the exception of certain taxes such as the property tax and sales tax, the revenues
and costs for this analysis have been calculated on a per capita basis. This means that
the population and employment base in the City is divided into the revenue and cost
figures shown in the right hand column of Table A-1 to estimate average factors on a
per capita basis. The factors developed for the Atascadero Fiscal Model are shown in
Table A-2.
TABLE A-2
PER CAPITA REVENUE AND COST FACTORS
Residential Business
Revenues Proportion Per capita Proportion Per capita
Franchise Taxes 86% $29.31 14% $24.94
Property Transfer Tax [a] 2% 2%
Business License 0% $0.00 100% $35.39
Licenses & Permits 86% $0.00 14% $0.00
Motor Vehicle in lieu 100% $7.24 0% $0.00
Revenue from Money and Property [b] 2% 2%
Fines and Forfeitures 86% $4.37 14% $3.72
Charges for Service 86% $59.43 14% $50.58
Other revenue 86% $49.62 14% $42.23
Expenditures
General Government [c] 20% 100% 20%
Police 86% $190.71 14% $162.30
Fire/EMS 86% $140.25 14% $119.36
Community Development 86% $7.26 14% $6.18
Public Works 86% $64.97 14% $55.29
Community Services 100% $98.67 0% $0.00
Other 86% $9.57 14% $8.15
Source: ADE, Inc.
Notes: [a] Calculated as a percent of property taxes. [b] Percent of other revenues. [c] Percent of
other costs.
The columns labeled “Proportion” indicate the amount of each revenue or cost item
that is allocated to residential or non-residential land uses. A key assumption in this
analysis is the relative service demand between residential and non-residential land
uses. In general, the analysis assumes that the impact of employment generating uses,
as represented by the number of jobs supported by the activity, is 50 percent of the
impact of residential uses, represented by the population. This is a standard service
population assumption for fiscal impact studies. It corresponds to the general notion
that employed people working at jobs in Atascadero occupy eight-hour shifts, mostly
during the regular work day, while the resident population, when they are not
working, represent a service demand during the 16 hours of non-working time during
a 24 hour day. Thus, an eight hour period is 50 percent of a 16 hour period. Of course,
there are many exceptions to this but as a general rule it reflects the overall relative
service demands of residential and non-residential land uses for a number of City
services. We estimate there are 26,947 residents and 8,822 jobs in Atascadero as of 2008
(not including 1,643 group quarters residents). With jobs given half the weight of the

residential population, the corresponding default proportions for weighting service
expenditures are 86 percent residential and 14 percent non-residential.
As indicated in Table A-2 a few of the revenues and services require different
assumptions. The property transfer tax is paid when properties are sold and the tax is
calculated as a function of the sales price. Therefore in the fiscal model, we estimate
these revenues as a percent of the property tax revenues generated by each land use
category. In terms of the Revenue from Money and Property line item, these revenues
are taken as a percent of total annual revenues for the City. On this basis, this revenue
represents about two percent of the total and is calculated here as a similar percent of
the revenues generated by each individual land use.
The General Government category is treated as an “overhead” charge on the cost of

direct services to residents and business in Atascadero. This category includes the
following City functions:
 City Council
 City Manager
 City Clerk
 City Attorney
 Technology
 Administrative Services
The General Fund expense for these Departments is about 20 percent of the total
General Fund budget and this factor is used in the fiscal model to project these costs by
land use.
For Community Services, we assume that most of the service demand comes from the
resident population, rather than from businesses or employees.
Three major revenues are not included in Table A-2 because they are not estimated on
a per capita basis. The property tax is a function of assessed value for each land use.
Total assessed value in Atascadero is estimated at about $3.7 billion; however, we were
unable to obtain a distribution of assessed value by land use in the City from the
County Assessor. We allocated property assessments based on average assessed values
for typical land uses within each land use category, derived from data obtained from
DataQuick. The average values used in this analysis are as follows:
 Single Family units $350,000 per unit
 Multi-family units $120,000 per unit
 Commercial (retail/office/service commercial) $150 per sq.ft.
 Industrial $110 per sq.ft.
 Lodging $175 per sq.ft.

Using these average values and the quantities of units and building sq.ft. in the City,
we were able to produce an aggregate total that is similar to the total assessed value
figure provided by the County Assessor. It is important to recognize that these values
do not represent current market values. Assessed values for existing properties that
have not sold in many years may be substantially below market. For properties that
have been in single ownership for a very long time, the original assessed value may
never have reflected market value, because assessment practices were different prior to
1978. But even where market value was the initial basis for the assessed value, unless
the property is resold, the assessed value can only increase two percent per year under
the provisions of Proposition 13. Therefore, after a period of time, it is common for
assessed values to be well below market value.
It is important to note that the City only receives a portion of the total property tax
paid by property owners. The base property tax rate of one percent of assessed value,
but the City of Atascadero gets less than 22 percent of this revenue on average, while
much of the rest of the property tax is allocated to local school districts, the County,
and other taxing agencies. Property owners may pay additional property tax amounts
to fund debt service on public bonds, but again the City does not receive this revenue.
The second major revenue not allocated on a per capita basis of the sales tax. Although
local household spending generates much of the taxable sales in the City, the sales tax
allocation to the City budget is based on the point-of-sale at retail businesses and other
types of businesses generating taxable transactions. Therefore, from a land use
perspective, it is the presence of the commercial businesses primarily that generates
sales tax and so this revenue is allocated to the non-residential land uses.
Finally, Transient Occupancy Taxes (TOT) are generated by lodging facilities, which
are included as a separate land use category in this analysis.
THE LAND USE INVENTORY

ADE prepared a 2008 land use inventory to use as a basis for the fiscal analysis (Table
A-3). For residential units, we relied on State Department of Finance (DOF) data and
estimated population using 2.54 persons per household for single family units and 1.75
persons per household for multi-family units. DOF also provides a population estimate
for group quarters, which is mainly the Atascadero State Hospital.
The employment figures are derived from a file obtained from the State Employment
Development Department. The non-residential building sq.ft. are estimated from data
in the City General Plan, updated to the present with information in the UCSB
Economic Forecast about building trends since 2001. These estimates are necessarily
rough, but they do correspond to acceptable ranges of industry standards for building
square footage per employee, as well as typical FAR patterns and assessed values per
sq.ft. as discussed above.

TABLE A-3
LAND USE ESTIMATES FOR ATASCADERO, 2008
LAND USE RESIDENTIAL Units Population Assessed Value
Single Family 8,355 22,141 $2,924,250,000
Multi-Family 2,747 4,805 $329,640,000
Group Quarters/Inst. 1,643
Total Residential 11,102 28,588 $3,253,890,000
NON-RESIDENTIAL Sq.Ft. Employment Assessed Value
Commercial 2,567,568 4,677 $385,135,200
Industrial 428,000 377 $47,080,000
Lodging 162,432 141 $28,425,600
Institutional 4,347,963 3,627 $0
Total Non-Residential 4,938,395 8,822 $460,640,800
TOTAL CITY $3,714,530,800
Source: ADE, Inc.
RESULTS OF THE ANALYSIS

For most cities in California, property taxes do not pay the full cost of municipal
services needed by residents and neighborhoods. As noted above, the City of
Atascadero only receives about one-fifth of property taxes paid by property owners.
Therefore, most cities rely on sales taxes and other revenues to help balance the budget
and to fund the services and amenities desired by the community. Atascadero is no
different in this regard and consequently the residential land uses appear to show a
negative fiscal effect for the City while most non-residential land uses generate a
positive fiscal balance (Table A-4). This outcome is not so much an indictment of
residential development but rather reflects more the importance of the City economic
base to provide the revenues needed to operate the City. The sales tax generated by
retail uses and the TOT tax generated by lodging create most of the extra revenues
needed to support the cost of services for the residential neighborhoods.

TABLE A-4
ESTIMATED FISCAL IMPACT OF EXISTING LAND USES IN ATASCADERO, 2008
Single
REVENUES Total [a] Family Multi-Family Commercial Industrial Lodging Institutional
Property Taxes $8,060,917 $6,345,926 $715,353 $835,783 $102,168 $61,687
Sales Tax $4,254,200 $0 $0 $4,254,200
Transient Occupancy Tax $696,090 $0 $0 $0 $696,090
Franchise Taxes $918,649 $648,961 $140,823 $115,943 $9,404 $3,517
Property Transfer Tax $152,623 $120,152 $13,544 $15,824 $1,934 $1,168
Business License $182,800 $0 $0 $164,470 $13,340 $4,989
Licenses & Permits $0 $0 $0 $0 $0 $0
Motor Vehicle in lieu $207,047 $160,351 $34,796 $0 $0 $0 $11,899
Revenue from Money &
Property $295,720 $160,541 $23,777 $95,716 $2,678 $12,813 $195
Fines and Forfeitures $136,992 $96,775 $21,000 $17,290 $1,402 $524
Charges for Service $1,862,636 $1,315,822 $285,531 $235,084 $19,068 $7,131
Other revenue $1,555,213 $1,098,649 $238,405 $196,284 $15,921 $5,954
TOTAL REVENUE $18,322,888 $9,947,178 $1,473,230 $5,930,596 $165,916 $793,874 $12,094
EXPENDITURES
General Government $3,081,613 $2,237,499 $485,533 $322,626 $26,168 $9,787
Police $5,977,237 $4,222,499 $916,275 $754,390 $61,189 $22,885
Fire/EMS $4,395,715 $3,105,264 $673,837 $554,785 $44,999 $16,830
Community Development $227,687 $160,845 $34,903 $28,737 $2,331 $872
Public Works $2,036,366 $1,438,550 $312,163 $257,011 $20,846 $7,797
Community Services $2,658,818 $2,184,734 $474,083 $0 $0 $0
Other $299,983 $211,917 $45,986 $37,861 $3,071 $1,149
TOTAL EXPENDITURES $18,677,420 $13,561,309 $2,942,780 $1,955,410 $158,604 $59,319 $0
NET (COST)/REVENUE ($354,532) ($3,614,131) ($1,469,550) $3,975,186 $7,312 $734,555 $12,094
Source: ADE, Inc.
Notes: [a] Total figures differ slightly from Table 1 budget figures due to modeling variation.


VII. APPENDIX B: ATASCADERO SURVEY

SURVEY RESULTS
SATISFACTION: SELECTION
Frequency Percent Valid Percent Cumulative Percent
Extremely Satisfied 75 3 3.1 3.1
Satisfied 256 10.1 10.5 13.5
Neither 279 11.1 11.4 24.9
Dissatisfied 1024 40.6 41.9 66.8
Extremely Dissatisfied 812 32.2 33.2 100
Missing 77 3.1
Satisfaction: Selection
Extremely
Missing, 3.1 Satisfied, 3
Satisfied, 10.1
Extremely
Dissatisfied, 32.2 Neither, 11.1
Dissatisfied, 40.6
Satisfaction: Selection
1,200
1,000
800
Frequency
600
400
200
0
Extremely Satisfied Neither Dissatisfied Extremely Missing
Satisfied Dissatisfied

SATISFACTION: QUALITY
Extremely Satisfied 84 3.3 3.4 3.4
Satisfied 455 18 18.7 22.1
Neither 502 19.9 20.6 42.7
Dissatisfied 878 34.8 36 78.8
Missing 87 3.4
Satisfaction: Quality
Extremely
Missing, 3.4 Satisfied, 3.3
Extremely
Dissatisfied, 20.5 Satisfied, 18
Neither, 19.9
Dissatisfied, 34.8
Satisfaction: Quality
1,000
900
800
700
Frequency
600
500
400
300
200
100
0

SATISFACTION: PRICES
Extremely Satisfied 73 2.9 3 3
Satisfied 642 25.4 26.6 29.6
Neither 909 36 37.7 67.3
Dissatisfied 535 21.2 22.2 89.4
Missing 109 4.3
Satisfaction: Prices
Missing, 4.3 Extremely

Extremely Satisfied, 2.9
Dissatisfied, 10.1
Satisfied, 25.4
Dissatisfied, 21.2
Neither, 36
Satisfaction: Prices
1,000
900
800
700
Frequency
600
500
400
300
200
100
0

SATISFACTION: PARKING
Satisfied 1275 50.5 52.4 67.7
Neither 527 20.9 21.7 89.4
Dissatisfied 167 6.6 6.9 96.2
Missing 91 3.6
Satisfaction: Parking
Extremely
Dissatisfied, 3.6 Missing, 3.6 Extremely
Satisfied, 14.7
Dissatisfied, 6.6
Neither, 20.9
Satisfied, 50.5
Satisfaction: Parking
1,400
1,200
1,000
Frequency
800
600
400
200
0

SATISFACTION: HOURS
Satisfied 1144 45.3 47.1 55
Neither 600 23.8 24.7 79.7
Dissatisfied 333 13.2 13.7 93.4
Missing 93 3.7
Satisfaction: Hours
Extremely
Extremely Missing, 3.7 Satisfied, 7.6
Dissatisfied, 6.3
Dissatisfied,
13.2
Satisfied, 45.3
Neither, 23.8
Satisfaction: Hours
1,400
1,200
1,000
Frequency
800
600
400
200
0

CITY RESIDENT
Yes 2,431 96.4 98.8 98.8
No 30 1.2 1.2 100
City Resident
3,000
2,431
2,500
2,000
Frequency
1,500
1,000
500
30
0
Yes No
DO YOU PURCHASE MOST HOUSEHOLD ITEMS?

Yes 2397 95 98 98
No 45 1.8 1.8 99.9
Share evenly 3 0.1 0.1 100
Do You Purchase Most Household Items?

3,000
2,500 2,397
2,000
Frequency
1,500
1,000
500
45 3
0
Yes No Share evenly

WHERE DO YOU WORK?
Atascadero 628 24.9 26.4 26.4
Paso Robles 176 7 7.4 33.8
San Luis Obispo 403 16 16.9 50.7
Within SLO County 298 11.8 12.5 63.2
Outside SLO County 61 2.4 2.6 65.7
At home 572 22.7 24 89.8
Retired 234 9.3 9.8 99.6
Templeton 10 0.4 0.4 100
Where Do You Work?
Retired, 9.3 Templeton, 0.4
Atascadero, 24.9
At home, 22.7
Paso Robles, 7
Outside SLO
County, 2.4
San Luis Obispo,
Within SLO 16
County, 11.8
Where Do You Work?

700
600
500
Frequency
400
300
200
100
0
Atascadero Paso San Luis Within SLO Outside At home Retired Templeton
Robles Obispo County SLO
County

GENDER
Female 1432 56.8 74.9 74.9
Male 466 18.5 24.4 99.2
A couple answered survey 15 0.6 0.8 100
Missing 610 24.2
Gender
Missing, 24.2
A couple
answered
survey, 0.6
Female, 56.8
Male, 18.5
Gender
1,600
1,400
1,200
Frequency
1,000
800
600
400
200
0
Female Male A couple answered
survey

INCOME
Under $20,000 81 3.2 3.5 3.5
$20,000 to $49,999 446 17.7 19.4 22.9
$50,000 to $69,999 473 18.7 20.6 43.5
$70,000 to $99,999 630 25 27.4 70.8
$100,000 to $149,999 458 18.2 19.9 90.7
$150,000 to $249,999 179 7.1 7.8 98.5
Greater than $250,000 34 1.3 1.5 100
Missing 222 8.8
Income
Greater than Under $20,000,

$250,000, 1.3 Missing, 8.8
3.2
$20,000 to
$150,000 to
$49,999, 17.7
$249,999, 7.1
$100,000 to
$149,999, 18.2
$50,000 to
$69,999, 18.7
$70,000 to
$99,999, 25
Income
700
600
500
Frequency
400
300
200
100
0
Under $20,000 to $50,000 to $70,000 to $100,000 to $150,000 to Greater than
$20,000 $49,999 $69,999 $99,999 $149,999 $249,999 $250,000

Sales Leakages ($ Millions)
Automotive Group $21.9
Building Materials & Home Furnishings Group $7.1
Food, Eating, & Drinking Group $13.3
Specialty Retail Group $6.1
General Merchandise Group $22.8
Apparel Store Group $7.9
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0
Percentage of Services Spending Staying in Atascadero
Health Services 23.1%
Professional Services 39.7%
Personal Services 65.5%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

VIII. APPENDIX C: ECONOMIC BASE ANALYSIS
Assessing Economic Roles
This section further disaggregates the industry sectors within San Luis Obispo County
in order to more accurately assess the structure of the regional economy and identify
the roles specific industries play within the county. Identifying these roles is important
because many of Atascadero’s best economic growth and diversification opportunities
come first from those industries that have shown the best growth potential elsewhere
in the county.
Economic base theory is a generally accepted principle of economic development that

suggests that a region’s economic prosperity is a function of external demand for that
region’s products. The theory divides the economy into two sectors. The first is a basic
(or export) sector that includes all goods and services produced for non-local
consumption. The second is a non-basic (or local-serving) sector that includes all goods
and services consumed in the local market.
The theory assumes that the basic sector supports the non-basic sector by purchasing
production inputs and by paying its employees wages that are spent locally. Therefore,
greater demand for basic sector goods drives demand for the non-basic sector and the
local economy as a whole.
To assess these sectors, ADE ranked the industries in San Luis Obispo County on the
basis of two key economic indicators – job growth and employment concentration
relative to the state. The economic roles based on these indicators fall into one of four
categories or “quadrants”, which are described as follows:
Growing Economic Base Industries: These industries have shown recent job growth
and have an employment concentration greater than the state’s as a whole. They
constitute the strength of the economy and represent opportunities for growth in
other areas such as supplier industries.
Emerging Industries: These sectors have shown recent job growth, but still have
relatively low employment concentrations. These industries represent potential future
growth opportunities because they exhibit relatively fast employment growth relative
to the state. Industries in this category could be considered attractive business
expansion and attraction targets.
Declining Economic Base Industries: These industries continue to have a relatively

high concentration of employment, but have shown recent job losses. They represent
the region’s economic strength but have shown some recent vulnerability, and could
be considered business retention targets.
Declining Non-Base Industries: These industries have shown recent job losses and
have below average employment concentration. They do not have an especially

notable regional presence and do not have growth prospects as strong as the industries
in the other categories.
Employment concentration was determined using location quotient analysis. A

location quotient for a particular industry is simply a ratio that compares the
percentage of employment in a particular industry in a local economy (San Luis
Obispo County) to the percentage of employment in the same industry in a reference
economy (California). A location quotient greater than 1 indicates that the local share
of employment in an industry exceeds the state share. Conversely, if a location
quotient is less than 1, the local share of employment in an industry is less than the
state share.
The top two quadrants list those industries with location quotients above 1 which are
said to have a high employment concentration. The bottom two quadrants list those
industries with low employment concentrations and location quotients less than 1.
In the right two quadrants, the growing industries are listed from highest employment
gains to lowest employment gains. In the left two quadrants, the non-growing
industries are listed from greatest decline to least decline.
There are some industries within the table listed in italics that denote relative rates of
growth or decline compared to the state as a whole. As mentioned above, industries
listed on the right-hand side-are those that are growing within the county. However,
an industry in the right two quadrants that is italicized indicates that that industry is
growing more rapidly at the state level. That is, despite the positive growth signals at
the county-level, that particular industry is not keeping pace with statewide growth
levels.
Similarly, the industries on the left-hand-side are declining within the county. Those
listed in italics on this side indicate that the rate of decline within the county is more
severe than at a state-level. This could mean either that the industry is declining at
both a county and state-level but declining faster at a county-level or that, at a state-
level, the industry may actually be experiencing positive rates of growth.
The results of the analysis at a 3-digit NAICS level are illustrated in the Table C-1
below.

TABLE C-1
SAN LUIS OBISPO COUNTY: ECONOMIC BASE TABLE, 2001-2006
NON-GROWING INDUSTRIES GROWING INDUSRIES
111 Crop Production 722 Food Services and Drinking Places
323 Printing and Related Support Activities 238 Specialty Trade Contractors
Support Activities for Agriculture and
115 Forestry 621 Ambulatory Health Care Services
237 Heavy and Civil Engineering Construction 721 Accommodation HIGH
453 Miscellaneous Store Retailers 236 Construction of Buildings EMPLOYMENT
333 Machinery Manufacturing 531 Real Estate CONCENTRATION
112 Animal Production 312 Beverage and Tobacco Product Manufacturing
441 Motor Vehicle and Parts Dealers 221 Utilities
Amusement, Gambling, and Recreation
114 Fishing, Hunting and Trapping 713 Industries
624 Social Assistance
454 Nonstore Retailers
212 Mining (except Oil and Gas)
451 Sporting Goods, Hobby, Book, and Music Stores
324 Petroleum and Coal Products Manufacturing
Electrical Equip., Appliance, and Component
335 Manuf.
623 Nursing and Residential Care Facilities
486 Pipeline Transportation
Religious, Grantmaking, Civic, Professional, and
813 Similar Orgs.
339 Miscellaneous Manufacturing 541 Professional, Scientific, and Technical Services

Credit Intermediation and Related Activities (i.e.
325 Chemical Manufacturing 522 Banking)
Computer and Electronic Product
334 Manufacturing 423 Merchant Wholesalers, Durable Goods
Merchant Wholesalers, Nondurable Wholesale Electronic Markets and Agents and
424 Goods 425 Brokers LOW
Management of Companies and
551 Enterprises 326 Plastics and Rubber Products Manufacturing EMPLOYMENT
517 Telecommunications 448 Clothing and Clothing Accessories Stores CONCENTRATION
315 Apparel Manufacturing 481 Air Transportation
511 Publishing Industries (except Internet) 532 Rental and Leasing Services
622 Hospitals 524 Insurance Carriers and Related Activities
321 Wood Product Manufacturing 518 Data Processing, Hosting and Related Services
337 Furniture and Related Product Manuf. 512 Motion Picture and Sound Recording Industries
515 Broadcasting (except Internet) 611 Educational Services
487 Scenic and Sightseeing Transportation 332 Fabricated Metal Product Manufacturing
322 Paper Manufacturing 484 Truck Transportation
Nonmetallic Mineral Product
327 Manufacturing 488 Support Activities for Transportation
Museums, Historical Sites, and Similar
712 Institutions 525 Funds, Trusts, and Other Financial Vehicles
Securities, Commodity Contracts, and Fin.
336 Transportation Equipment Manufacturing 523 Investments
213 Support Activities for Mining 314 Textile Product Mills
Performing Arts, Spectator Sports, and Related
311 Food Manufacturing 711 Industries
113 Forestry and Logging 516 Internet Publishing and Broadcasting
331 Primary Metal Manufacturing 483 Water Transportation
313 Textile Mills
533 Lessors of Nonfinancial Intangible Assets
Source: ADE, IMPLAN
In addition to the omission of the public sector, several other sectors were
intentionally excluded from the table as they are predominantly locally-serving non-

basic industries. Although a number of these industries returned a location quotient
above 1, it is unlikely that these products or services are exported outside the county
to meet external demand. The following is a complete list of these 3-digit NAICS
industries8:
 NAICS 442: Furniture and Home Furnishings Stores
 NAICS 443: Electronics and Appliance Stores
 NAICS 444: Building Material and Garden Equipment and Supplies Dealers
 NAICS 445: Food and Beverage Stores
 NAICS 446: Health and Personal Care Stores
 NAICS 447: Gasoline Stations
 NAICS 452: General Merchandise Stores
 NAICS 485: Transit and Ground Passenger Transportation
 NAICS 491: Postal Service
 NAICS 492: Couriers and Messengers
 NAICS 493: Warehousing and Storage
 NAICS 561: Administrative and Support Services
 NAICS 562: Waste Management and Remediation Services
 NAICS 811: Repair and Maintenance
 NAICS 812: Personal and Laundry Services
 NAICS 814: Private Households
Growing Economic Base Industries

As noted above, the industries in the upper right quadrant represent the heart of the
SLO County economy, growing industries with comparatively higher concentrations.
8
It should be noted that many tourism-related industries were included in the analysis as they are a special case
whereby the good being exported “tourism” is consumed locally.

TABLE C-2
INCREASING ECONOMIC BASE: SAN LUIS OBISPO COUNTY
Industry 2006 Employment LQ
Food, Drink, Hospitality & Tourism
Food Services & Drinking Places 10,275 1.48
Accommodation 3312 2.49
Beverage Product Manufacturing 1171 4.26
Including:
Wineries 1169 7.08
Amusement, Gambling & Recreation Industries 1215 1.12
Sporting Goods, Hobby, Book & Music Stores 1293 2.33
Infrastructure & Power
Mining (except Oil and Gas) 106 2.48
Petroleum and Coal Products Mfg 175 1.8
Including:
Petroleum Refineries 166 2.09
Pipeline Transportation 19 1.15
Utilities 2118 5.76
Electronics
Electrical Equipment, Appliance & Component Mfg 424 2.05
Including:
All Other Misc. Electrical Equip & Component Mfg. 386 18.01
Emerging Economic Base Industries

Although the location quotients of the industries in this quadrant indicate a relative
lack of specialization, the positive growth rates may be an encouraging sign and help to
focus business attraction and expansion strategies.
TABLE C-3
EMERGING INDUSTRIES: SAN LUIS OBISPO COUNTY
Professional, Scientific and Technical Services 3935 0.63
Including:
Architects 347 1.77
Computer System Design 505 0.41
Lawyers 563 0.67
Engineering 745 1.04
Insurance Carriers 637 0.44
Data Processing, Hosting & Related Services 133 0.37
Motion Picture & Sound Recording Industries 352 0.36
Support Activities for Transportation 125 0.24
Plastics & Rubber Products Mfg. 253 0.7
Including:
Un-laminated Plastic Profile Mfg 63 4.8
Other Plastics 115 0.69
Fabricated Metal Product Manufacturing 65 0.71
Including:
Metal Tanks 58 5.1
Architectural & Structural Metals 119 0.49
Machine Shops 239 0.88
Small Arms Manufacturing 99 43.17
Textile Product Mills 22 0.25
Source: ADE, Inc.

Declining Economic Base Industries
These industries, while more concentrated at the county-level than at the state-level,
are losing traction in San Luis Obispo County. Further, seven of the nine industries
listed in this quadrant are losing jobs faster within the county than at a state-level
(those listed in italics). Four of these seven industries are showing signs of modest
growth at a state-level (NAICS 115: Support Activities for Agriculture and Forestry
added almost 14,000 jobs over the time period at the state-level). As noted above, these
industries may be excellent candidates for business retention programs as a means of
maintaining and strengthening the county’s export base.
TABLE C-4
DECLINING ECONOMIC BASE: SAN LUIS OBISPO COUNTY
Crop Production 1935 1.72
Animal Production 211 1.11
Support Activities for Agriculture and Forestry 2151 1.89
Exception: Farm Management Services 347 5.11
Printing & Related Support Activities 669 1.74
Including Manifold Business Forms 395 28.69
Waste Management & Remediation 387 1.52
Heavy & Civil Engineering 733 1.22
Machinery Manufacturing 800 1.54
Including Semiconductor Machinery Mfg 118 3.2
Exceptions:
Farm Machinery 25 1.38
Metalworking Machinery 129 1.45
Cutting Tool & Machine Tool 111 9.73
All Other Misc. General Purpose Machinery Mfg. 293 2.4
Declining Non-Economic Base Industries

The industries in this quadrant are those for which the study region has no
comparative advantage evidenced by the consistent year-over-year decline in
employment figures. Most notably, eleven manufacturing industries are listed in this
quadrant accounting for 1,309 lost jobs.

TABLE C-5
DECLINING NON-BASIC INDUSTRIES: SAN LUIS OBISPO COUNTY
Miscellaneous Manufacturing 393 0.68
Chemical Manufacturing 121 0.22
Including Pharmaceuticals 91 0.31
Computer and Electronic Product Mfg. 396 0.19
Exception: Audio & Video Equip. Mfg. 220 3.97
Apparel Manufacturing 194 0.38
Exception: Cut & Sew Apparel Mfg 193 9.88
Publishing Industries 483 0.76
Exception: Software Publishing 111 0.32
Furniture & Related Product Mfg. 237 0.63
Non-Metallic Mineral Product Mfg. 188 0.61
Transportation Equipment Mfg. 169 0.2
Food Manufacturing 401 0.41


IX. APPENDIX D: COMMUNITY FORUM
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ECONOMIC DEVELOPMENT

BACKGROUND REPORT OF FINDINGS

FEBRUARY 17, 2009

RETAIL AND DOWNTOWN DEVELOPMENT

Applied Development Economics, Inc. 1

While Downtown presents a significant opportunity to enhance visitor attractions in

2 Applied Development Economics, Inc.

AN INCUBATOR OF INNOVATIVE INDUSTRIES

New business opportunities are emerging on a number of fronts as investments are

A cornerstone in the foundation of innovative infrastructure could be a technical

Applied Development Economics, Inc. 3

4 Applied Development Economics, Inc.

Atascadero’s current Economic Development Strategy was adopted in 2003. The

A. PURPOSE – WHY ECONOMIC DEVELOPMENT?

Applied Development Economics, Inc. 5

JOBS AND ECONOMIC PROSPERITY

SHOPPING, ENTERTAINMENT, ARTS

6 Applied Development Economics, Inc.

Applied Development Economics, Inc. 7

Source: ADE, Inc.

8 Applied Development Economics, Inc.

Source: ADE, Inc.

B. PROCESS AND PUBLIC INPUT

Applied Development Economics, Inc. 9

Timeline June-October 2008 October – January – May,

Work SWOT Assessment Identify Economic Prepare Strategic

Public Input Interviews Public Forum City Council

Interviews. ADE interviewed 30 business executives and community leaders in June,

10 Applied Development Economics, Inc.

A. RETAIL MARKET ANALYSIS

Applied Development Economics, Inc. 11

ATASCADERO’S RETAIL SETTING

12 Applied Development Economics, Inc.

LOCAL RETAIL SPENDING

Applied Development Economics, Inc. 13

Food, Eating, and Drinking Group

14 Applied Development Economics, Inc.

ATASCADERO RETAIL SALES

Applied Development Economics, Inc. 15

16 Applied Development Economics, Inc.

Automotive Group $21.9

Building Materials & Home Furnishings Group $7.1

Food, Eating, & Drinking Group $13.3

Specialty Retail Group $6.1

General Merchandise Group $22.8

Apparel Store Group $7.9

$0.0 $5.0 $10.0 $15.0 $20.0 $25.0

Source: ADE, Inc.

In general, Atascadero is a regional provider for food-related retail stores, home

Findings by retail group are summarized below.

Applied Development Economics, Inc. 17

18 Applied Development Economics, Inc.

KEY RETAIL ISSUES

Applied Development Economics, Inc. 19

20 Applied Development Economics, Inc.

Considering Atascadero’s position in the marketplace for tourism, some issues to be

Applied Development Economics, Inc. 21

Based on an assessment of Atascadero’s position and challenges in the market, it

C. JOB PRODUCING INDUSTRIES

In 2007, 835 employment establishments were located in Atascadero. These

Agriculture and Mining

22 Applied Development Economics, Inc.

Applied Development Economics, Inc. 23