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Economic Development of Santa Barbara County’s Cities Guided by Industry, Demographics and Vision

A look inside the socioeconomic conditions of each of the eight cities in the county

In many ways, Santa Barbara’s economic development is guided by the city’s history and cultural traditions. Click to view larger
In many ways, Santa Barbara’s economic development is guided by the city’s history and cultural traditions. (Sam Goldman / Noozhawk photo)

Santa Barbara County is often described and analyzed as two distinct regions: South County and North County.

South County leans left politically, while North County leans right. The county Board of Supervisors' votes often split between the two sides, with the Third District between them casting tie-breaking votes.

The South Coast is a renowned tourism hotspot, while North County is a vital agricultural hub.

Unsurprisingly, a divide also exists economically: Median household income and median household values are higher in the more expensive South County.

While the overarching trends are easily perceptible, comparing economic indicators and economic development between the county’s eight incorporated cities is not an easy task.

Cities compile and analyze data on their economic statuses at different times, through different means and with different focuses.

A rough snapshot of these cities, though, reveals what makes them tick economically, as well as where one might want to live or set up a business.

Typically, Santa Barbara, Goleta and Carpinteria (along with unincorporated Montecito, Summerland and Isla Vista) form South County.

Santa Maria, Lompoc and Guadalupe (along with unincorporated Orcutt, Los Alamos and Vandenberg Village) generally make up North County.

In between is a somewhat mixed bag in the Santa Ynez Valley: the cities of Buellton and Solvang, along with unincorporated areas including Santa Ynez and Los Olivos.

Unemployment

The North County, on average, has a slightly higher unemployment rate than South County.

In September, according to the state Employment Development Department, the average unemployment rate in the county was 4.6 percent, while California as a whole was at 5.3 percent.

According to UC Santa Barbara’s Economic Forecast Project, local cities’ September 2016 unemployment rates, which have all seen a small and gradual decline, are as follows:

Santa Barbara 3.9% Santa Maria 6.0% Buellton 3.1%
Goleta 2.9% Lompoc 6.5% Solvang 6.1%
Carpintera 4.4% Guadalupe 4.7%    

Less economic data exists for the county’s unincorporated communities, but the EFP lists unemployment rates for many of them as well:

Montecito 4.2% Vandenberg Village 6.1% Santa Ynez 2.9%
Isla Vista 8.8% Orcutt 4.8%    
Summerland 3.7% Los Alamos 6.3%    

Median Household Income

The Santa Ynez Valley and South County have the highest median household incomes in the county. Per these cities’ own studies, these incomes are as follows:

» Buellton: $88,189 (2015)

» Goleta: $83,446 (2016)

» Carpinteria: $74,764 (2014)

» Solvang: $74,700 (2015 projection)

» Santa Barbara: $68,187 (2016)

» Lompoc: $54,980 (2014)

» Guadalupe: $46,420 (2014)

» Santa Maria: $44,547 (2013)

Median Home Value

This statistic follows the same geographic pattern as median household income. Per UCSB’s Economic Forecast Project, the average median home values in September for the county, state and United States as a whole are, respectively, $552,800, $472,100 and $189,400

These values for the county’s cities for September, along with how much they’ve changed over the preceding year, are as follows:

Santa Barbara $1,090,100 (+8.4%) Santa Maria $347,100 (+0.9%) Buellton $541,100 (+5.4%)
Goleta $781,900 (+4.2%) Lompoc $301,700 (+10.0%) Solvang $726,600 (+6.6%)
Carpinteria $805,100 (+0.5%) Guadalupe $195,900 (an average over 2010–2014, per the city)    

The data also note that in Montecito, by far the most affluent community in the county, the number is $3,229,900 (with a one-year jump of 11 percent).

Most Common Industries by Employment

The residents of the tourism-oriented South County are most often employed by professional services companies, in the leisure and hospitality industry, and in government.

The biggest industries in North County are related closely to agriculture.

These cities leverage their core industries, history, culture, attractions and demographics to promote and guide their economic development.

Per the Economic Forecast Project’s latest data, workers in Santa Barbara, Goleta, Carpinteria and Santa Maria are employed in the following industries:

Santa Barbara

Government, 21.4%

Educational and health services, 17.1%

Leisure and hospitality, 16.6%

Professional and business services, 14.8%

Santa Maria

Agriculture, forestry, fishing and hunting, 30.0%

Educational and health services, 12.5%

Retail trade, 11.0%

Government, 10%

 

 

Goleta

Government, 23.3%

Professional and business services, 13.2%

Manufacturing (durable commodities), 12.6%

Leisure and hospitality, 10.6%

Lompoc (CA Economic Development Dept., 2014)

Government, 24%

Retail trade, 16%

Educational and health services, 14%

Agriculture, forestry, fishing and hunting, 10%

Solvang (City socioeconomic profile, 2010)

Food preparation and serving-related, 12.7%

Building and grounds cleaning and maintenance, 11.8%

Management, 11.6%

Office and administrative support, 8.5%

Carpinteria

Agriculture, forestry, fishing and hunting, 16.5%

Leisure and hospitality, 13.9%

Professional and business services, 10.8%

Manufacturing (nondurable commodities), 8.3%

Guadalupe (City-data.com, 2013)

Agriculture, forestry, fishing and hunting, 37%

Transportation and warehousing, 8%

Wholesale trade, 8%

Manufacturing, 7%


Buellton (Economic Development Strategy and Implementation Plan, 2015)

Accommodation and food serves, 24.4%

Agriculture, forestry, fishing and hunting, 19.1%

Manufacturing, 13.7%

Retail trade, 8.5%

 

Santa Barbara creates a unique sense of place

Population: 91,000

The county seat is the most iconic city in the region, and the city uses its history and culture as development guides perhaps more than any other municipality in the county.

Nestled between the Pacific Ocean and the Santa Ynez Mountains, Santa Barbara emphasizes this through a carefully manicured downtown ambiance, close adherence to Spanish colonial architecture and generous preservation of historic locations.

The city is overall a wealthy community with a “diverse economic climate,” said City Administrator Paul Casey.

It’s historically been attractive to the wealthy, retirees and young couples, he said.

As the county seat, government and professional services play a large role in Santa Barbara’s economy. Click to view larger
As the county seat, government and professional services play a large role in Santa Barbara’s economy.  (Sam Goldman / Noozhawk photo)

“From my economic-development perspective from Santa Barbara, our focus has always been more on creating a sense of place and having a place where people want to be — and then the industry and the jobs will kind of flow from that,” Casey said.

This unique sense of place, bolstered by tourism and a growing tech industry, is characteristic of the whole South Coast, he said.

While Goleta tends to be the tech hub of South County, the whole Goleta-Santa Barbara-Carpinteria metropolitan area benefits from the economic engine of UC Santa Barbara.

Santa Barbara’s attractive environment means ambitious, entrepreneurial grads want to stay and launch their businesses in town.

“I hear a lot how difficult it is to do business in Santa Barbara,” Casey said. “And I somewhat agree with that, but I kind of agree with it in the sense of that’s what the community wants.

“We’ve had (city) charter amendments and voting initiatives, and we’ve created this sense of place because we have a process that’s very thorough and particular and difficult. And that’s made it so good, and why people want to be here.”

Consumer electronics company Sonos is one example: created and raised in Santa Barbara, the business has stuck it out downtown when many chose to relocate to Goleta or elsewhere.

Another economic driver is the city’s status as the county’s administrative seat, where government, financial and education centers converge.

“You’ve got people who can afford the higher rents and want to be downtown,” Casey said, adding that it makes affordable housing a constant challenge.

Goleta focuses on being family- and business-oriented

Population: 31,000

“I think the future is pretty bright in Goleta,” said former City Councilman Tony Vallejo.

A key reason is the city’s business-friendly approach, led by the City Council, he said.

“Some of our communities around here are tourist-driven and maybe some finance-driven. We’re really business-driven,” he said.

UCSB is a powerful economic engine that brings and creates new jobs and companies, especially in the city’s low-key but robust tech industry.

Among the big-name tech companies with bases in the city are Raytheon, Citrix and FLIR.

The Goleta Entrepreneurial Magnet, a partnership between the city, UCSB and the Goleta Valley Chamber of Commerce, facilitates this by providing local startups with an intense crash-course in business development.

That attracts well-educated workers, Vallejo said.

“We have people with good jobs, and they have to spend money somewhere, and they spend it here in town.”

All this, he added, is reflected in the city’s notably high income levels and low unemployment rate.

“A healthy economy also lends itself to a healthier city,” Vallejo said. “The fact that we’re one of the 50 safest cities in the state — a lot of that’s economy-driven.

“Most of our residents have good jobs, and they can pay their bills. And sometimes crime is driven by need, and if you keep a healthy economy, that reduces the need for crime too.”

Carpinteria prioritizes its small-town vibe

Population: 14,000

Though Carpinteria benefits from tourists flocking to the South Coast and, to a lesser degree, the tech industry, it has no plans for becoming another Santa Barbara.

“Carpinteria is a small town,” said City Manager Dave Durflinger “It’s what a lot of our economy is about, and how we approach it.”

The surrounding agriculture, UCSB and Westmont College additionally influence the city’s economic trajectory, he said. Online education company Lynda.com, acquired in 2015 by LinkedIn, is headquartered in the city.

“First and foremost, it’s about location,” Durflinger said.  “We’re a distinct small town that’s attractive to people. The community over many, many decades has worked hard to maintain a positive image of the small, coastal beach town.”

To do that, he said, the city and residents invest in infrastructure and environmental conservation and work closely with groups like the Carpinteria Valley Chamber of Commerce and the Carpinteria Unified School District.

“We have to work cooperatively in order to get the most bang for the community’s buck,” he said.

The residents themselves, he added, are invested in improving and promoting their community. Attractions like the Carpinteria Triathlon and the California Avocado Festival are almost exclusively run by community members.

Though affordable housing remains an issue, like the rest of South County, the city has long tackled the challenge of where to house employees with flexible mixed-use zoning ordinances.

“We’re not growing outward in Carpinteria,” Durflinger said. “We’re surrounded by agriculture that’s protected, so it’s important to take full advantage of the land that we do have in the incorporated area. … And that means affordability by design in a lot of cases.”

Santa Maria builds on its agriculture-based economy

Population: 102,000

Agriculture, forestry, fishing and hunting account for nearly a third of the employment share in the county’s biggest city — the largest share of any city’s top industry.

“It’s an ag industry here on the Central Coast. It always has been, and it probably always will be for the foreseeable future,” said City Manager Rick Haydon. “They’re very dominant in their labor force and what they bring to the city as far as the workers are concerned.”

The city’s Windset Farms, for instance, is currently expanding and bringing in a couple hundred more employees.

“They are the largest greenhouse in North America, and once they complete their expansion project, it’ll probably be the largest greenhouse in the world,” Haydon said.

Like much of the rest of the Central Coast, he noted, it took the city some 18 months to really feel the impacts of the recession, before having a relatively slow time pulling itself out of the economic slump.

“As far as economic development is concerned right now, we are back to where we were prior to pre-recession levels.”

Most of Santa Maria’s growth, Haydon said, is happening in the southwest part of town and is bringing jobs from outside the agriculture industry.

“More back-office type of employment sectors seem to be coming to the city,” he said.

Rabobank has consolidated its back-office operations in Santa Maria, bringing in another 100 or so jobs, while San Luis Obispo-based MindBody has added some 90 jobs with a new office in town.

Another bank Haydon was not yet at liberty to name is looking to relocate to the city, too, he said.

Perhaps the city’s biggest project, in the works for a while now, is the 120-acre Enos Rancheros development, just west of Highway 101 off Betteravia Road.

The mixed-use project, Haydon said, will include a 24-pump gas station, a Lowe’s and eateries.

In a couple years, he said, “I think it’s going to bring a tremendous tax base to the city.”

Lompoc works to boost tourism

Population: 43,000

Lompoc’s economy is influenced by surrounding communities’ big industries: the Santa Maria area’s agriculture to the north, the Santa Ynez Valley’s wine country to the east and the adjacent Vandenberg Air Force Base’s government and military ties.

Economic development director Teresa Gallavan characterized the city’s growth as steady and moderate, with increased development over the past several years.

Right now, the city is focused on promoting tourism, with its chief vehicle being “Explore Lompoc,” the recently established tourism business improvement district.

“That has really been important and had a positive impact on increasing tourism in our community in Lompoc,” Gallavan said.

Among the tourism-related developments are the Hilton Garden Inn, which is under construction; the 40-acre Central Coast Business Park next to the Lompoc Airport, for which the city is looking for its first tenants; and the so-called Lompoc Wine Ghetto.

Gallavan said the city is working on a zoning ordinance update, which will promote economic development by better aligning business’ current needs and operations with where those needs and operations are allowed. (The Wine Ghetto’s land-use zone, for instance, doesn’t currently allow for serving food.)

Lompoc is also working to attract more recreational and sports tournaments through improvements to ballfields, the new five-acre River Bend Bike Park and a proposed motorsports park.

“Tourism is an area where we’ve seen a considerable amount of growth recently,” Gallavan said.

The city, she added, has also seen expansions in the biomedical industry, including a new hospital, a new oncology center and the relocation into town of dental-products manufacturer DenMat.

Lompoc is also pursuing a housing project, called Summit View Homes, in a recently annexed area, and is working on a community facilities district for the infrastructure for the 460-home Burton Ranch development.

Guadalupe looks to grow in population

Population: 7,200

Nestled against the boundary of San Luis Obispo County, Guadalupe is looking to grow in population.

The city’s relatively small size and the fact that many big-box stores already exist nearby makes Guadalupe’s ability to attract larger businesses more difficult, said Finance Director Annette Munoz.

The city is making strides, however, in growth with the Pasadera development, which broke ground in the February in the south part of town.

Build-out for the development includes 800 homes and a shopping center, Munoz said.

Given the county’s average household size, that could mean over 2,300 more people — or a 33-percent jump in the city’s present population from a full Pasadera neighborhood.

The road leading to the development was just completed, she added, allowing prospective residents the opportunity to check out model homes.

“Guadalupe has a long history of being an ideal location for filming movies and ads, such as the 2015 Budweiser NFL ad,” Munoz said. “So we’re also exploring those opportunities as well, just to get people to know that we’re here.”

The operation of large agricultural coolers is an important component of the city’s economy, as is sales tax revenue from out-of-city automobile purchases.

Guadalupe doesn’t have large car dealerships, but when its residents buy cars, the sales tax money flows back to where the purchasers live, Munoz said.

Buellton “sitting pretty” despite space constraints

Population: 5,000

The county’s smallest city is also one of its most prosperous, with high resident earnings, low unemployment and a moderate median home value in relation to the rest of the county.

“The most development has been in the Crossroads Village Center, where we have townhomes under construction, we have a new park, and we have several new retail businesses going in,” said City Manager and Planning Director Marc Bierdzinski.

The city has a Hampton Inn under construction next door to the upcoming Commons at Zaca Creek, which will feature small wine-tasting spaces and a large public market with specialty and boutique retail and restaurants.

Buellton is also pursuing industrial projects in the south end of town, Bierdzinski said.

The city’s biggest economic-development focus right now is the revitalization of its Avenue of Flags, laid out in the Avenue of Flags Specific Plan, which will be subject to City Council approval early in 2017.

The area would be revamped into an even greater commercial, civic and mixed-use center for the city.

“The Avenue of Flags is one of the biggest areas we have to revitalize and get a jump start going,” Bierdzinski said.

Property, sales and transient-occupancy taxes, he said, are projected to be up about 2, 10 and 3 percent, respectively.

“We’re getting some healthy revenues in, and we have a balanced general-fund budget, and $3 million in reserves,” he said. “So we’re sitting pretty as far as funds go, and just looking forward to continuing that trend.”

At about 1.5 square miles, the city has to plan development carefully given the constraints of its urban-growth boundary, which residents voted in so that any annexation would be subject to a popular vote.

“We have to focus on what we have in the interior of our area,” Bierdzinski said.

The city manager also cited Buellton’s small size as the reason for its low unemployment.

“The businesses we have come in immediately get people employed,” he said.

Solvang relies on its Danish culture and attractions

Population: 5,500

As the “Danish capital of America,” Solvang benefits greatly from tourism.

“We are a strong visitor destination, and what really drives the Solvang economic engine is the transient-occupancy tax we receive from hotel guests,” said Arleen Pelster, the city’s planning and economic development director.

“That’s an important revenue source for us. … We’re at the lowest vacancy rate we’ve had in a while, and we’ve had some of our hotels upgrading their hotel rooms, so our average daily revenue is up.”

The city’s Historic Danish Village could be mistaken for a historic Copenhagen neighborhood, and runs on authentic Danish food and business, and traditional Danish architecture.

Located near Buellton in the prosperous Santa Ynez Valley, Solvang has a relatively high unemployment rate of 6.1 percent.

“This is a very popular retirement destination also,” Pelster said. “A lot of folks who live here are in the retirement age, which I think accounts for the unemployment rate.”

The city doesn’t just want to attract individual visitors, but business visitors as well.

“Our major project was looking at whether or not Solvang could operate and support business for a conference center,” Pelster said. “We did a feasibility study, and the conclusion was we simply aren’t big enough, and we don’t have the right type of hotel facilities to really support a conference center.

“Our visitor’s bureau is working on more of a village conference-type of approach, marketing Solvang as a conference destination for smaller groups.”

Noozhawk staff writer Sam Goldman can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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